NEW YORK (TheStreet) -- Aside from M&A speculation, nothing gets investors more anxious on Wall Street than earnings season.This is a time when investors receive confirmation or denial whether they have placed the right bets. As we enter the second week of third-quarter earnings season, we are going to look at a few companies that are heading in three separate directions.
What's more, not only did Intel log sequential revenue growth arriving at 5% but remarkably, its PC revenue rose a respectable 4%. Although I will not suggest that the company is free and clear from any struggles, there are positives to consider. Intel will be reporting its third-quarter earnings on Tuesday after the market closes, and analysts are expecting EPS of 50 cents on revenue of $13.2 billion. These would represent annual declines of 23% and 7%, respectively. The stock is currently trading near its 52-week low of $21.48 -- almost 40% below some analysts' price targets, which have been as high as $29.71. As the stock continues to trade at what I believe to be a considerable discount with a price-to-earnings ratio of 9, there is the possibility that Intel can see the $25 level by year's end. If you are a value investor looking for a safe investment in technology and one that pays a respectable dividend, you should consider Intel.
Johnson & Johnson ( JNJ) continues to be misunderstood. Even so, its stock continues to perform adequately despite execution problems including product recalls. What has hurt JNJ of late is that it is perceived "too big to succeed." Unlike several of its rivals, namely Pfizer ( PFE), Novartis ( NVS) and Covidien ( COV), which now appear more nimble and adaptable, JNJ comes across as incredibly stubborn in it unwillingness to adapt. Its insistence on remaining one entity has hurt it. It would have seen positive results if it had opted to separate its businesses. JNJ has yet to prove that it can make a solid turnaround as long as it remains (in my opinion) too big and lacking in agility. The company plans to report third-quarter earnings on Tuesday, and analysts are looking for net income of $1.21 per share, representing a decline of 2.4% from the same period one year ago. In its second quarter, however, profits fell almost 50% to $1.41 billion from the $2.78 billion that it reported a year ago. As a result, the Street has grown more pessimistic about the company's prospects, and I think investors should as well. The fact that the stock is yet near its 52-week high is impressive and suggests that the company still has a good reputation in some quarters. Nonetheless, analysts at Goldman Sachs have issued a sell rating on the stock even though they also set a price target of $72, which is higher than where the stock currently trades. I'm not bullish JNJ at this point, but its track record of solid performances suggests that it deserves time to be proven right. For now it's a hold.