We’re nearly three quarters of the way through what’s shaping up to be a strong earnings season, with the bulk of the companies so far beating expectations.
In a note to investors, Bespoke Investment Group crunched the numbers and found dozens of what it calls “triple play stocks” — shares of companies that: (a) beat earnings estimates; (b) surpassed revenue estimates; and (c) ramped-up future guidance on their reporting days. In the note, the firm said:
“We went through the price charts of these 51 triple play stocks and identified the ones that we believe look the most attractive…”
Bespoke co-founder Paul Hickey highlighted three of those stocks on CNBC’s “Street Signs” on Wednesday.
“[We] track these triple plays on a regular basis for investors really looking for stocks with strong fundamental growth and relative to expectations, as well,” Hickey explained. “We tend to focus on names that also have strong technicals to compliment the fundamentals.”
Hickey likes Abbott Laboratories, which is up 18 percent in the past six months.
“[It’s] been doing really well on the catalyst they’re going to split the company up in two: the pharmaceutical and medical device business and the nutritionals,” Hickey said. “You'll have a high dividend payer and a higher growth company to boot. It pays over 3 percent yield. It’s a good, relatively safe bet, as well. It’s in the health-care sector defensive play.”
Looking out to 2016, Abbott’s blockbuster drug used to treat inflammatory diseases, Humira, goes off patent. It accounted for about 20 percent of the company’s revenues last year.
But Hickey said that Humira going off patent will happen after the company splits and he contended, “it’s still a way off.”
Hickey likes Equifax, which is up 30 percent in the past six months.
“Equifax is moving into emerging markets and it is still a cyclical business in the U.S.,” Hickey said. “Any time you apply for a credit card, refinance your mortgage, or anything that regards your finances, there’s a credit check and that rings the register of one of the credit rating agencies. They have an oligopoly and Equifax is one of them.”
Hickey likes Mattress Firm Holding, which is up 84 percent in the past six months.
“It was an IPO last year. They’re the second largest retailer in the country. They’re growing,” said Hickey. “Tempur-Pedic’s numbers this earnings season, the stock got killed because of competition from private label memory foam mattress companies. Mattress Firm is one of the companies. They have their own private label that’s probably taking share from Tempur-Pedic.”
Additional News: Equifax Posts Higher First-Quarter Income, Revenue
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When this article was published, Paul Hickey did not own any of these stocks and neither did anyone in his immediate family. His firm did not own more than 1 percent of any of these stocks, and he was not an investment banking client of any of these companies. Hickey did not have any additional disclosures.