November 01, 2011 at 09:05 AM

BY Dennis Hobein - Contributor, Stock Traders Daily

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Our Trading Reports in this Article:

• QCOM
• WFM
• TAP
• CLX

Although third quarter earnings season is beginning to wind-down, and a majority of the largest companies have already issued results, investors and traders will still be busy sifting through hundreds of reports during the week of October 31. Bolstered by strong earnings once again, the stock market has put in quite a rally over the past month. However, as the number of influential earnings reports subside, the question is whether the market can continue its roll as that catalyst fades.  On Wednesday, November 2, there will be a number of highly-anticipated earnings reports on the docket. Here is a look at a few of them:

QCOM a “Smart” Buy?
After the bell on November 2, QUALCOMM (Nasdaq: QCOM) will report its fiscal fourth quarter results, with the Street forecasting EPS of $0.78 on revenue of $4.0 billion. This would equate to y/y growth of 15% and 36%, respectively. Over the past month, QCOM has benefitted from some bullish analyst commentary, primarily due to the fact that it supplies its chips to leading smartphone makers – including, Apple’s (Nasdaq: AAPL) iPhone 5. As QCOM – and other semiconductor stocks – enter the seasonally strong December quarter, its stock may be poised for a year-end rally. Also, the stock is trading will a reasonable/low valuation, with a FY12 P/E around 15x, and its balance sheet remains rock-solid with nearly $11 billion in cash on the books and $1.3 billion in long-term debt. However, traders should keep in mind that the company may offer conservative guidance for FY12, based on a cloudy outlook on the global economy.

Healthy Gains
The resiliency and relative strength of Whole Foods Market (Nasdaq: WFM) has been nothing short of remarkable. With ongoing concerns about the health of the consumer, one would assume that a high-end grocer would be struggling in this environment. That has not been the case, as shares of WFM are closing in on all-time highs. For its upcoming quarter, analysts are expecting EPS to grow by 24% to $0.41 with revenue up 14% y/y to $2.4 billion. Like other food-related stocks, one of the concerns for WFM has been whether the company can successfully pass on higher costs to its customers. WFM, though, benefits from a very loyal customer base that values organic and healthier food, that also typically consists of higher income earners. In addition to steady traffic at its existing stores, WFM has been growing through building its store base.

Beer & Suds
Also on November 2, two large consumer-oriented companies will report earnings. Molson Coors Brewing (NYSE: TAP) is expected to report EPS of $1.24 and revenue of $947.41 million. The brewer is coming off a tough Q2 print in which it missed on both the top & bottom lines, with management citing a weakening economy, record rainfall in key markets, and high fuel prices.

Clorox (NYSE: CLX), which makes an array of well-known cleaning and household products, is set to issue its fiscal first quarter results before the open on November 2. Estimates currently stand at EPS of $0.93 on revenue of $1.3 billion. Shares of CLX have struggled to find direction over the past couple of months, trading in a choppy, sideways fashion. CLX initiated a series of price increases in August, and subsequently reaffirmed its belief that its FY12 guidance of $4.00-$4.10 may be conservative. That’s a positive indication that consumers are also absorbing its higher prices.

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