Earnings Season is a Virtual Candy Store for Investors

It’s earnings season, and it’s a great time to peruse the stock market looking for companies generating earnings growth.

In the equity markets, everything is relative. You can have a company generating 40% in earnings growth, and the stock might go down. Alternatively, you can have a company generate 12% in earnings growth, and the stock takes off.

Most importantly, as an individual investor, you need to not only do your homework about a company’s operations, but also familiarize yourself with the stock’s trading action. It is always useful to follow a stock for while before committing a position.

Speaking of earnings, Luxottica Group S.p.A. (NYSE/LUX) reported excellent financial growth in its latest quarter. This large- cap Italian company makes all kinds of designer eyewear (I just can’t shake the eye care investment theme!) and looks well positioned for continued success over the next several years.

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The company reported third quarter consolidated sales growth of an impressive 47% to 1.07 billion euros. Net income grew a solid 16% to 89.3 million euros, and the company reported that it is doing very well in the Asia Pacific market.

Another interesting company that’s growing is VASCO Data Security Intl. Inc. (NASDAQ/SC/VDSI). This small-cap technology company trades on the NASDAQ Small-Cap Market and provides security products for portable devices like PCs and mobile phones.

This company’s revenues for the third quarter of 2005 increased 79% to $13.27 million, up strongly from revenues of $7.4 million in 2004. Net income for the third quarter was $1.75 million, or $0.05 per diluted share, representing an increase of 52% over its third quarter net income in 2004.

As I’ve mentioned before, earnings season is an excellent time to be looking for new investment opportunities. As a full-time investment analyst, I’m like a kid in a candy store. Even though the broader market hasn’t been doing much lately, there’s no doubt that there are great companies out there generating impressive growth.