Focus on the Positives

I’m still having a ball reviewing first quarter earnings. Most of the bigger corporations have already reported their numbers, but a lot of smaller companies are doing so now.

The good news is that a lot of companies we’ve talked about in this column reported excellent financial growth. Not only was the first quarter a good one for corporate profitability, visibility as it’s known, or corporate forecasts, are looking very solid for the future.

The stock market isn’t really paying attention to company forecasts right now. Just two years ago, this was all the rage. Now, the market is more concerned with inflation and interest rates. It just goes to show you that everything in the markets experiences waves of enthusiasm.

One company that we mention often in this column is Providence Service (NASDAQ/PRSC). In the first quarter of 2006, the company reported a solid 34% gain in revenues to $43.0 million. Net income came in ahead of company guidance, growing 25% to $2.1 million during the quarter. The company cited that it expects to generate sequential earnings growth in each of the next three quarters of fiscal 2006.

Now, these numbers aren’t earth-shattering, but they are impressive.

We mentioned Luxottica Group S.p.A. (NYSE/LUX) recently as a large-cap company that’s doing well.

How about VCA Antech (NASDAQ/WOOF)? This company is part of my continuing enthusiasm for the pet care industry. It operates one of the best animal hospital networks in the country.

This company’s first quarter revenues grew 25% to $234 million, while net income grew an impressive 72% to $29.7 million.

All I can say is that there are some really good investment stories out there in this market.

Worrying about inflation and interest rates is an astute thing to do. But you can’t let these factors overwhelm your attention from some great companies that are doing very well right now.