NEW YORK (TheStreet) - We're now in the third full week of earnings season where Apple (AAPL) - Get Report and Facebook (FB) - Get Report, among others, are due to announce their numbers.

This week "value" continues to be the operative word for investors looking to buy and sell on either a surprise beat such as




ahead of disappointing results

such as


(CMG) - Get Report


In this article we are going to make a case for buying


(T) - Get Report



(VZ) - Get Report




while looking to unload



ahead of its report.

Buy AT&T and Verizon

If you want two of the safest stocks for the next 10 years you can't go wrong with buying telecom giants AT&T and Verizon. Not only are these two titans certain to be dominant well into the future, but both offer dividend yields that are among the best in the entire market while operating in sector that is

poised for exponential growth


So it is not by coincidence that I am recommending adding both names ahead of Apple's report. But that is not because they are mere iPhone distributors. In fact, they have proven to be much more valuable in their own right, particularly Verizon as it demonstrated in

its most recent report


The company reported a second-quarter profit of $4.29 billion, or 64 cents per share, an increase of 19% from the $3.6 billion that it reported in the same period of a year ago. Revenue grew almost 4% to $28.6 billion, meeting analysts' estimates. The company benefited immensely from rising cellular bills attributable to higher-than-usual data charges.

During the quarter, the company added 888,000 new customer contracts, exceeding the 724,000 that were projected. Even more noteworthy is how the company continues to get its customers to spend more money. Profit margins surged 49% as its average revenue per user (ARPU) grew almost 4% to $56.13, topping the $55.82 ARPU predicted by analysts.

However, after reporting the stock dropped as investors were disappointed by its landline business. Nonetheless, I expect to see a rebound this week after Apple's report and I would recommend accumulating shares at current levels.

This brings us back to AT&T, which will report on Tuesday before market opens. Analysts are expecting earnings per share of 63 cents on revenue of $31.75 billion. In its first quarter the company reported beating analysts' expectations by logging $31.8 billion in revenue and registering profits of $3.6 billion, an increase of 1.8% over the $3.4 billion it posted in the same period a year ago.

The company earned 60 cents a share (excluding items), an increase from the 57 cents per share earned in last year's quarter while also topping analysts' estimates of 57 cents. Not only is the company demonstrating tremendous overall growth, but it is doing exceptionally well from its U-Verse business to the extent that its revenue increased by almost 40%.

As for this quarter, I'm expecting more of the same. AT&T has been considered a safe haven of sorts for a number of years because of its solid market beating performances.

Now, as its future looks even brighter, the company once again looks like a growth stock because management continues to do an excellent job of focusing on adding shareholder value. I would be adding ahead of the report with the expectation that the stock will generate returns of 15% by the end of the year.


With data being such a critical IT priority, it is hard for me to see how EMC isn't considered a bargain at today's prices. Despite being a leader in a major enterprise market, EMC does not seem to get the love that other cloud names such as

(CRM) - Get Report

continue to enjoy.

Be that as it may, I think astute investors have an opportunity here to get in on a good company ahead of what should be another excellent quarter. In its first-quarter report, EMC logged net income of $587 million on revenue of $5.1 billion, 23% higher than in the previous year while its sales grew by 11%.

The company beat the Street estimate by 1 cent on profits of 37 cents per share, while also ending the quarter with $10.9 billion in cash and investments. The company continues to demonstrate not only superior sales growth, but even better profitability, making it one of the steadiest performers on the market. What's more, many investors continue to overlook the fact that another cloud giant,


(VMW) - Get Report

, is a subsidiary of EMC.

So essentially, EMC owns the global leader in virtualization and cloud infrastructure, helping it generate an increase of 25% year over year in additional revenue. Even more noteworthy was the fact that EMC continues to demonstrate that there is strong demand for its broad portfolio of services to help customers accelerate to the cloud.

This is done in partnership with networking giant


(CSCO) - Get Report

as well as


(INTC) - Get Report

forming the VCE, or the Virtual Computing Environment Co. At $25 per share with a relatively inexpensive forward P/E of 12, EMC is undervalued by at least 20%. Even on the most conservative assumptions, the stock should see $30 by year end.

Sell Riverbed

Riverbed is one of those stocks I have always thought was too expensive relative to its performance.

For that matter, two months ago with the stock trading right around $20, I called it one of the best shorts on the market and

suggested that it is heading to $15

. The stock dropped as low as $13.30 before recovering slightly to where it sits now at $15.29. The question investors want to know is where is it heading next?

The company is due to report its second-quarter earnings on Tuesday after market close, and I would not want to be holding shares when it does. If you want confirmation of what is likely to happen, you should consider what is happening now at


(FFIV) - Get Report


we called it here correctly just prior to its report


Last quarter the company reported profits of $6.9 million, or 4 cents per share. This is after having reported $13 million, or 8 cents per share, in the same period of a year ago. Excluding one-time charges, Riverbed earned 20 cents per share on a 12% increase in revenue to $182.4 million. Analysts expected a profit of 20 cents per share and $186.1 million in revenue

After profits declined by 50% in the first quarter, how great could the second quarter be to avoid a miss in the second quarter? I just don't see how Riverbed can do it, particularly when its gross margin dropped from the previous year by almost two points and product gross margin was also much lower. 

Even more disappointing is the fact that management does not appear to have a firm handle on how to fix its issues.

As great as it is to execute patience in times like these, investors need to ask themselves how much time are they willing to wait until the company's management figures it out. Not to mention that the competition from other cloud companies including EMC and VMware continues to be light speed ahead.

For these reasons, I would sell Riverbed ahead of earnings and look to re-enter between $10 and $13 or until it can put together two consecutive good quarters.

Bottom Line

Earnings season can be both an exciting time as well as one that brings a lot of anxiety for companies as well as investors. It's called the reporting period for more than one reason. Companies are essentially sharing their quarterly report cards, where getting a passing or failing grade often depends on the expectations that were set.

In a separate article, we'll look at possible earnings plays in


(CAT) - Get Report



(JNPR) - Get Report


Exxon Mobil




(SBUX) - Get Report

Follow @rsaintvilus

At the time of publication, the author was long AAPL and held no position in any of the other stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.