MINNEAPOLIS ( Stockpickr) -- It was a rough week for stocks, but within the tempest was a calm harbor for a handful of stocks reporting earnings results last week. Names such as Daktronics ( DAKT), Phillips-Van Heusen ( PVH) and Joy Global ( JOYG) moved higher thanks to impressive reports.

For those having difficulty determining the direction of the current market, profits can be made by executing a simple strategy of trading stocks set to release earnings reports. My objective here is to provide snapshot of those companies and the likelihood that they will beat or miss earnings estimates, with the ultimate goal of anticipating the direction in which the stocks will head after their reports.

The stock market is facing tremendous headwinds, including a slowing economy in the midst of disinterest in pumping more money into the system. Fiscal stimulus may be needed, but the likelihood of getting governmental dollars into the economy at a time of massive debts is unlikely. In addition, the Federal Reserve has announced an ending to its quantitative easing program.

Related: 5 Strength Plays for June's Weak Market

The economy, then, is left to its own devices, good or bad. The bottom line for me is that the current environment is horrible for long-term stock investment. Trading is the way to go, and trading companies posting earnings is a great game plan for future success.

Here are five names to trade in advance of earnings reports this week.

Hovnanian Enterprises

How homebuilder Hovnanian ( HOV) retains any value is beyond me. The company is bleeding red ink and operates in a market that is far from healthy. Surprisingly, there are enough buyers of this stock to give Hovnanian a market cap of $225 million.

That is impressive considering the staggering losses this company has endured. Those who think the end of the housing crisis is near have not been paying attention to Hovnanian's results over the last three quarters. During that time, the company has missed Wall Street earnings estimates -- and by a wide, wide margin.

So not only is the company losing money, but it is losing more than analysts expect. Again, why does anyone own this stock?

For the current quarter, the company is expected to lose 51 cents per share. I would look for it to lose even more. Perhaps this latest miss will send shares to the Pink Sheets. This stock is worth only pennies, in my opinion.

Sell Hovnanian in advance of this week's earnings report.

Hooker Furniture

The homebuilding industry is still moribund, but that does not mean that other correlated industries are suffering. For example, up until this year, the home furnishing market had rebounded nicely from the depths of the recession. Boom or bust, furniture only lasts so long. Eventually there is a new buying cycle that emerges out of the necessity to replace older furnishings.

After bottoming in early 2009 at $6 per share, Hooker Furniture ( HOFT), one of the top-yielding consumer durables stocks, tripled in value to $18 per share in late 2010. But it has been a different story since the start of 2011, as shares have collapsed to their current price just over $10 per share.

The cause of the collapse is directly related to poor operating performance. Over the last two quarters, the company reported earnings results that missed analyst expectations by a wide margin. In the most-recent quarter ended in January, Hooker reported that it made 9 cents per share, compared with analyst expectations 14 cents per share. That was a big miss, and shares sold off accordingly.

The company attributed the earnings miss to higher shipping costs and a corresponding inability to pass along the expense to consumers. Better planning and a willingness to raise prices should help matters. Analysts expect the company to make 71 cents per share in the current fiscal year, with that number growing to $1.12 per share in the following year.

You can buy that expected growth, warts and all, for just under 15 times current-year estimates. Look for the company to bounce back higher when it reports earnings this week.

Shuffle Master

One of the things I look for when trading stocks set to report earnings is valuation. Specifically, some of the best trading opportunities arise when a stock trades for a low valuation relative to expected growth. To the extent the reporting company beats Wall Street expectations, the gains can be explosive in a short period of time.

With that in mind, I suggest considering casino gaming equipment maker Shuffle Master ( SHFL), which reports results for the quarter ended April 30 on Wednesday. With the recent government smackdown in the online gaming space, I expect growing attendance at live casinos to be a boost for revenue and profits for companies such as Shuffle Master.

Wall Street is expecting the company to make 15 cents for the quarter. That should be no problem for Shuffle Master, which has beaten estimates by the proverbial penny per share in each of the last few quarters. This quarter should be more of the same. For the current year, analysts expect the company to make 55 cents per share. That number jumps 20% in the following year. Investors can buy that growth or just 19 times current year estimates.

The penny beats and valuation bode well for the stock when it releases earnings results on Wednesday. Add in the potential growth from an increase in live gaming, and shares could pop higher.

Vail Resorts

Despite the doom and gloom regarding the health of the American consumer, the luxury segment seems to be doing just fine. I guess that makes sense given the widening gap between the rich and poor. Companies catering to those with discretionary funds are performing very well in this market.

Vail Resorts ( MTN) reports earnings results on Thursday. The operator of several big-name ski and recreation resorts saw its shares move steadily higher since the end of last summer through the end of the year, up a total of 56%. Interestingly, that performance came over a period when earnings results missed expectations.

From the end of last year to today, shares have taken a step back, by about 15% -- and this during a time when results have beaten estimates. For the current reporting period ended April 30, analysts expect Vail to earn $2.14 per share. Investors can expect the company to beat estimates based on the strength of the high-end market.

The trouble with share price activity is valuation. The company is expected to make $1.09 a share in the current year and $1.35 in the following year. Shares trade for 41 times current year estimates. That is a bit rich given the expected 23% growth rate expected in the future.

A strong earnings number could push shares higher, but I would avoid this stock based on valuation.

Verint Systems

When stocks sell off as they are currently doing, technology stocks tend to fare worse than the overall market. That has been the case in the business software and services industry over the last two months. This key component of the economy attracts significant buying activity when times are good and market sentiment is bullish, but the reverse is also true.

In the case of Verint Systems ( VRNT), shares have dropped approximately 10% since early April. Such selling pushes the valuation of Verint to compelling levels considering the company has beaten earnings estimates by a wide margin in recent quarters. In the most recently reported quarter ended Jan. 31, the company made a profit of 66 cents per share when estimates were for a profit of 52 cents per share.

For the full year ending Jan. 31, 2012, analysts expect the company to make $2.53 per share. In the following year, the estimate is for Verint to make $2.95 per share. Investors can buy that very solid 17% growth for just 13 times current year estimates.

Given recent performance against estimates look for Verint to move higher after it reports results on Wednesday. I would use the selling of the last two months as an opportunity to buy.

To see these stocks in action, check out the 5 Earnings Trades for the Week portrfolio.

-- Written by Jamie Dlugosch in Minneapolis.

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At the time of publication, author had no positions in stocks mentioned.

Jamie Dlugosch is a founder and contributor to MainStreet Investor and MainStreet Accredited Investor. Formerly, he was president and CEO of Al Frank Asset Management. He has contributed editorially to The Rational Investor, The Prudent Speculator, Penny Stock Winners and InvestorPlace Media.