Towards the end of the earnings season, there are some more companies yet to report their quarterly results. These include Hovnanian Enterprises, Inc. (NYSE: HOV), Dollar General Corp. (NYSE:DG), and Navistar International Corp (NYSE:NAV) where results could play an important role in deciding if the rally continues or fizzles out.
Hovnanian Enterprises Might Post Positive Results
Hovnanian Enterprises, Inc. (NYSE: HOV) is a New Jersey homebuilder company which has seen a 15 percent growth in its stock over the last month. Hovnanian Enterprises is likely to come up with its quarterly results on Thursday and given the positives encircling the sector, it would not be surprising to see Hovnanian Enterprises posting a substantial improvement in its operations. Hovnanian Enterprises currently does not generate profits but demonstrated a positive trend in financial performance in the previous quarter. Revenues jumped nearly 33 percent to $358.2 million as home prices increased.
As a result, losses reduced to $11.3 million, down from $18.3 million in the same period a year ago. Hovnanian Enterprises, Inc. (NYSE: HOV) is not a top pick in the space and has a debt pile on its balance sheet to take care of. However, there is a turnaround in progress which leaves enough space for the stock to move upwards.
Dollar General Posted Growth In Sales
Dollar General Corp. (NYSE:DG) is one of the biggest discount retailers in the United States with a total of 10,557 stores in 40 states as of March 1, 2013. The company has been riding the wave of improving economy which is visible in its earnings too. For the year ended February 1, 2013, the company posted an 8.2 percent growth in sales to $16 billion. Given the limited gearing in its capital structure, top line growth caused a 24 percent jump in net profit to $952.7 million.
The improvement is not only seen in growing numbers but also in margins as most factors including operating costs and interest rates are trending lower. This trend is likely to continue in the latest quarterly financial results which are scheduled to be released on Tuesday, May 3. Currently trading at a price earnings multiple of 18.5, the stock came down a bit last week in tandem with wider markets. While growing sales and profits are a given, there is a real possibility of the company surpassing analyst expectations.
Major turnaround underway at Navistar
Navistar International Corp (NYSE:NAV) is another company likely to announce its quarterly results this week. Shares of this truck maker are up 48 percent over the last 3 months but returning investors’ confidence continues to fuel the rally. A number of strategic initiatives taken during the quarter are likely to contribute to the quarterly financial numbers. It is not likely that Navistar will post a profit as yet but gradual sales ramp up of its entire heavy duty truck portfolio with EPA compliant engines is certainly a positive.
The company’s top brass has virtually been overhauled in recent months and the new management appears to be working hard. To better focus on its core business of producing and selling trucks, Navistar International Corp (NYSE:NAV) recently sold its recreational vehicle business to Allied Specialty Vehicles. Revenues are still showing a declining trend but a combination of quality improvement and launch of new engines is likely to make Navistar a profitable company during this year. At a forward price earnings ratio of 15.3, the stock is not cheap but not expensive as well.
All things taken into consideration, these stocks present a solid chance of exceeding street expectations. This is particularly true for Dollar General Corp. (NYSE:DG) due to lesser reliance on debt capital. On the other hand, Navistar International Corp (NYSE:NAV) still trades at a fraction to its 2011 valuations and as such, better than expected earnings can boot its stock.