Earnings Season:
Finding the Best Stocks to Buy on Wall Street

July 17, 2008

Sohu.com: The Best Stocks to Buy in the Second Quarter

Now on to earnings. The second-quarter earnings season will be the fourth straight down quarter for the S&P 500. Estimated earnings for the index are predicted to decline by 13.2%, and that comes after analysts have repeatedly slashed their forecasts.

Most of the damage will be to the financial sector, and airline and automotive industries where high energy prices have taken a toll. These are certainly NOT the best stocks to but. The good news is that in Blue Chip Growth, we've steered away from the autos, airlines, financials and other sectors limping into the next quarter. We're heavily invested in healthy sectors like agriculture and energy, and have been able to weather recent choppy seas because our portfolio has avoided areas that are hurting the most.

Here's a list of some important earnings dates to look for. I've also included Wall Street's consensus forecast. I've also highlighted three stocks: Schlumberger (SLB), McDonald's (MCD) and Occidental Petroleum (OXY) which are all on my Blue Chip Growth Buy List.

Company	Earnings Date	Wall Street's Estimate
Citigroup	July 18	-$0.61
Schlumberger	July 18	$1.12
Bank of America	July 21	$0.53
SanDisk	July 21	$0.14
Broadcom	July 22	$0.36
DuPont	July 22	$1.07
Halliburton	July 22	$0.68
Amazon.com	July 23	$0.26
Baidu.com	July	$0.97
McDonald's	July 23	$0.86
Occidental Petroleum	July 24	$2.71
Black & Decker	July 25	$1.42
Netflix	July 25	$0.40

If you're looking to add some muscle to your portfolio, I'd recommend adding any of our three stocks before earnings are reported. By the time earnings come out, it's usually too late to profit from the best part of a stock's move.

Don't Be Fooled By the Economic Data

Alongside our much-anticipated earnings, we'll see a slew of other data about the first half of the year in the coming weeks. I want to prepare you for what you'll see in the headlines, and make sure you understand how the numbers affect your investments.

The common theme most of the reports share is that they point to a prolonged stagflation environment for the near future, and indicate that the economic conditions we've seen so far in 2008 will continue a while longer. Rising commodity prices, especially food and energy inflation, will persist.

The first estimate of second-quarter GDP growth will be reported on July 31, and I expect it to be positive. But don't be fooled–numbers are strong for exports because a severely weakened dollar has made U.S. goods cheaper abroad, and retail sales are still being buoyed by the government's stimulus checks. While the weak dollar may be good for exports, it's also a large part of the inflation that is cutting into many Americans' budgets and causing drops in spending and consumer confidence. And we all know that the government can't keep sending out checks to boost spending–no matter how much we'd like to find another one in our mailbox every few weeks.

That's all for this week. I'll have the next issue of What's Working on Wall Street Now next Thursday, July 24.

Sincerely,

Louis Navellier