Two Earnings-Related Plays

The third quarter is likely to be the first since the recession ended in 2009 that the S&P 500 turns in negative earnings growth. Given the substantial rally of the past three months, the market appears to be willing to overlook this negative earnings trend for now; however, the extended nature of the rally makes any company that misses earnings vulnerable to a significant and instant selloff. It is prudent to avoid that sort of earnings-related pullback as best one can. I am allocating the limited amount of new long positions in my portfolio to stocks whose earnings seem to be going in the opposite direction of the overall market. Here are two cheap stocks with earnings estimates that have moved up over the last few months and have posted impressive revenue growth, even in this anemic economy.

CAI International (CAP) is a global intermodal marine-cargo container leasing business....245 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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