Corporate results and stock performance... Part 1

The presentation of corporate results obtained in each of the quarters of the year are events closely followed by investors. Knowing the corporate results of companies that interest one is relevant, since based on the interpretation that one can obtain from the data, different decisions can be made.

Business results presented in the second quarter of the year are setting positive records for companies. To put this in context, according to data from the company Factset, the growth rate of companies in the S&P500 on a year-over-year basis, is at a 24.7%a figure much higher than the ten-year average of 3.4%. On the other hand, all eleven sectors in the benchmark index are reporting year-over-year revenue growth, with eight of them reporting double-digit growth figures.

In this regard, approximately 90% of the companies that have already presented results within the S&P500 have exceeded analysts' estimates. All this on the basis of, Earnings per Share (EPS) and expected revenue.

Since the start of the results presentation in the week of July 12, the market has supported its uptrend and has made eleven new highs in a twenty-five session period. As can be seen, technically the index has positioned itself above a possible new resistance level above 4,350 points.

S&P500 : Corporate results

Expectations for earnings per share growth for this year were high, with EPS expected to be close to 190. Currently the expected EPS for the end of this year is 200. The valuation of the S&P500 is expected to have fallen considerably to levels of 22 times expected earnings (P/E). Considering that recently the market was at valuations close to 30 (bubble levels), it is expected that the valuation of the S&P500 is expected to have fallen considerably to levels of 22 times expected earnings (P/E). dot.com); Today the situation is more conservative from the point of view of these financial indicators.