It was a solid quarter for the companies in our stock portfolio, with the bulk of our names reporting what we felt were good-to-great earnings reports. Continued economic growth on the back of a resilient consumer and increasing business confidence ahead of what most expect to be a lower interest rate environment helped drive the results. Our companies’ performances were reflective of the S & P 500 firms in aggregate: 81% of technology companies beat sales estimates for the second quarter, followed by health care 79% and financials 61%, according to FactSet data. Health care at 87% and industrials at 82% were sector leaders in bottom-line beats. Methodology With the latest earnings season largely in the rearview, these second-quarter report cards are not the end-all, be-all for analysis. After all, we’ve only got about two weeks left in the third quarter. Nonetheless, we believe stock prices ultimately follow the underlying business fundamentals of companies. So, having an idea of which companies did well and which ones did not can help when thinking about which stocks to pick first in a pullback or let go of in a broad-based rally. With the latest earnings season largely in the rearview, these second-quarter report cards are not the end-all, be-all for analysis. After all, we’ve only got about two weeks left in the third quarter. Nonetheless, we believe stock prices ultimately follow the underlying business fundamentals of companies. So, having an idea of which companies did well and which ones did not can help when thinking about which stocks to pick first in a pullback or let go of in a broad-based rally. Similar to prior quarters, we grouped company results into one of four categories. The companies in each category are listed in alphabetical order. The Great The Good The Not So Bad The Ugly Home Depot is not listed below because we did not own the name before the company’s earnings release. With the Fed widely expected to cut interest rates at its upcoming September meeting, we opted to initiate a position in Home Depot to increase our exposure to quality companies that have been held down in this high interest rate environment but will see their industries improve as rates come down. Costco is also not included as the company has yet to report results. We will circle back and add Costco when the numbers are out toward the end of the month. Here is our ranking of earnings from 30 out of our 32 companies. The Great Apple : Despite all the worries about China, the consumer tech giant hit back with beats on the top and bottom lines. Equally important, total revenue guidance and management’s services growth forecast for the current quarter outpaced expectations. Advanced Micro Devices : In addition to exceeding expectations for both sales and earnings, management provided a positive outlook for the current quarter and sounded upbeat about AI chip demand. While MI300 chip supply continues to improve, CEO Lisa Su noted her expectation for…
Read More: We ranked Q2 earnings from 30 portfolio stocks from great to ugly