After a dizzying spell of earnings last week, this week is not exactly a vacation, but a bit quieter. We have six final earnings releases for companies on a June quarter. Although the market averages punched in a new high in the last eight consecutive sessions, volatility is bubbling beneath the surface.

Retailers and pharmaceutical stocks, in particular, continue to sell off on earnings. These industries offer some terrific values but investors need some patience when buying more value oriented stocks.

Granted, Big Five (NSDQ: BGFV)’s guidance was weak, but the stock is trading at a ridiculously low valuation and pays a 6.4% dividend. ANI Pharma (NSDQ: ANIP) reported a terrific quarter and is moving quickly with its plans to submit data to the FDA for its corticotropin product, but sold off due to a horrible quarter for Teva Pharma (not a stock we own but a competitor in the generic space).

On the flip side, The Chemours Company (NYSE:CC) and Vulcan Materials (NYSE: VMC) jumped higher on positive guidance. The Chemours continues to deliver fabulous numbers and capitalizes on its unique position to benefit from fluorocarbon products. Vulcan fell victim to bad weather but provided robust backlog numbers to inspire confidence in future earnings.

More detailed commentary on these stocks and all of our reporting companies is below. AMC means after market close and BMO means before market opens.

Up on deck this week:
Monday: PRA Health Sciences (NSDQ: PRAH) AMC
Tuesday: Jazz Pharma (NSDQ: JAZZ) AMC
Wednesday: Charles River Labs (NYSE: CRL) BMO and Masonite (NSDQ: DOOR) AMC
Thursday: Smart Sand (NSDQ: SND) BMO and Ichor Systems (NSDQ: ICHR) AMC *note ICHR pre-announced a good quarter last week

Around the portfolio:

American Outdoor Brands (NSDQ: AOBC) We sold our American Outdoor puts last week for a 100% gain as the stock fell below the strike price due to two negative events.

Cabela’s, a major retailer of firearms, reported a weak quarter and offered this commentary: “Merchandise sales were challenging in the second quarter,” said Tommy Millner, Cabela’s chief executive officer. “Since the fall election, we have continued to see a slowdown in firearms and shooting related categories. This slowdown was even more pronounced in the second quarter due to the impact of inventory liquidation by a major competitor who has filed for bankruptcy as well as the anniversary of a number of events from a year ago, including the Orlando tragedy in June of 2016.”

Also, recent put position Sturm & Ruger (NYSE: RGR), reported a disastrous quarter. Revenue missed by 20% and earnings were just half of expected numbers. While we made 100% selling the puts at $4.60 they are currently trading at $8.60. Anyone lucky enough to still hold these puts would be up 400%!

If you haven’t sold the American Outdoor Brand puts, you’ve got some time, as they don’t expire until September 15. I booked the triple digit gain, but option prices increase quickly once the stock drops below the strike price, as they have in this situation. I don’t expect any big snap back in the stock but watch it closely to protect your gain.

ANI Pharmaceuticals (NSDQ: ANIP) reported a very good quarter, yet the stock sold off as yet another fire alarm rang out in the generic drug industry. Coincident with ANI’s release was a disastrous earnings report from Teva Pharmaceuticals. Teva is a big player in the generic space, and it is dying under a mountain of debt. It slashed expectations and warned of price pressure for generics. The problem is that Teva has built a business plan on increasing prices of generics and now is in a very tight spot.

ANI is a totally different story. While the majority of ANI’s revenue is generic, it has not raised prices on those drugs so sees pricing as stable. Also, it’s branded drug business is growing 56% and generates huge profits.

Most importantly (and the reason I’ve recommended the stock) is the company is progressing quickly with its commercialization of Corticotropin, a $1.25 billion drug with little competition. The company completed manufacturing batches of the drug and plans to meet with the FDA by the end of 2017.

To quote CEO Arthur S. Przybyl, “we create value from our product launches internally, our partnerships and the transactions that we used monies to acquire assets. We also have a branded portfolio, which is not the case at every generic company, which generates now annual revenues of — that approximate $45 million at better than 80% gross margins. So we’re not a pure-play generic story that sees customer consolidation and margin shrinking and pricing rolling back”.

Big Five Sporting Goods (NSDQ: BGFV) reported a less than expected quarter. Big Five has been dropping due to poor results from many of its sporting goods competitors which I erroneously thought would cushion the stock if results were soft. I was wrong but have a hard time selling a stock that currently sells for 9x 2018 estimates and has a 6% dividend yield.

Although April and May were good months for Big Five, June comps dropped mid-single digits, primarily in camping and firearms. July comps are down low single digit as well. Lower estimates for the third quarter assume no upswing in comps for the final two months.
One bright spot for the company is profit margins which were up year over year. I am giving the company one-quarter to prove that the weakness in camping is due to wet weather (many California campgrounds were closed early in the summer).
I recommend subscribers place a $8 stop loss on positions.

Carbonite (NSDQ: CARB) sold off slightly after reporting a pretty boring second quarter. Earnings beat by $.03 but then management lowered the next quarter by $.04. Carbonite is in the early quarters of integrating its EVault backup and disaster recovery products for corporate customers.

Bookings are up 19%, a strong indicator of future sales. The company is beginning to get better placement with channel resellers, but these improvements are just starting to be felt in its numbers.

Numbers to date are in-line with my expectations, and I’m willing to be patient for the growth acceleration.

The Chemours Company (NYSE: CC) continues to knock the cover off the ball. As manufacturers shift over to its green fluoro products and chemical solutions, revenue and earnings keep launching higher.

In just two quarters Chemours has increased earnings estimates 40% from $1 billion to $1.4 billion. Adoption of its Opteon refrigeration product is in the early stages of ramping and promises robust profits.

The Chemours is one of our best stocks, up 71% since February but is still below my $60 target. I am reviewing my buy limit price as the stock is trading just above that level now.

Criteo (NSDQ: CRTO) reported an impressive second quarter. Revenue growth jumped up to 32% up from 29% last quarter. Investors in this stock seem to get very nervous when revenue growth drops below 30%, so this is a welcome development.

Earnings equaled $.39 higher than the $.34 estimate. Guidance for the third quarter is for 30% revenue growth but guidance for the fourth quarter is just 15%. It is critical for investors to remember that Criteo had an unusually strong fourth quarter in 2016 when revenue jumped 41%. Criteo traditionally guides low and beats on its revenue growth.

BMO Capital analyst Daniel Salmon says Criteo should be bought on weakness. He notes the stock declined on the company’s “cautious comments” about Apple’s (AAPL) “intelligent tracking prevention” rollout in September. The analyst doesn’t expect Apple’s initiative to be a “material disruption” for Criteo and he believes that Criteo’s “network effect continues to build.” He keeps a $70 price target and an Outperform rating on the shares.

Ichor (NSDQ: ICHR) pre-announced a strong quarter last Tuesday in conjunction with a new acquisition and a secondary offering of 5.5 million shares being sold by insiders.

Revenue will equal $165 million, $23 million higher than estimates and earnings will equal $.62, $.12 higher than estimates. While the company’s purchase of Cal-Weld represents some of this upside, the company’s basic business is still delivering higher than expected results.

My guess is that the stock is selling off due to the news of the secondary. Of the 24 million total shares outstanding on Ichor, only half of those are in the float or available to trade. The secondary of 5.5 million shares is large in comparison to the float.

But the stock sale doesn’t concern me. Ichor is a fairly small cap stock (roughly $500 million) and many mutual funds or large institutions cannot buy the stock due to the limited number of shares. Trends in revenue and earnings growth look great, and I think the additional shares could bring more buyers on board to the stock.

The shares were priced on Wednesday for $19.32. The stock should rally with this overhang removed.

Integrated Device Technology (NSDQ: IDTI) reported a solid quarter. Revenue and earnings beat estimates by about 1%, not a huge beat, but an improvement from some of its recent misses.

It takes a long time for Integrated’s customers to come on board. The company must submit prototype chips which then must be tested aggressively to ensure full functionality. Based on the numbers presented, it looks like new orders are arriving.

Most importantly, industrial and automotive customers, whose orders are more predictable, grew 35% sequentially and now make up 13% of total sales. Guidance for the next quarter frames current revenue estimates of $199 million.

Merrill Lynch downgraded the stock to Underperform after earnings as the analyst is growing impatient for large revenue increases. It is telling that he is keeping his $27 target. The stock has been a slow grower, but I think it will hit a pivot point as the industrial and auto customers make up an increasingly bigger portion of revenue.

Vulcan Materials (NYSE: VMC) reported a weak quarter but buoyed investor confidence with solid backlogged orders. Poor weather in Georgia, Florida, Alabama and Louisiana led to a 12% drop in aggregate revenue to those states. These orders haven’t disappeared but simply been pushed out to drier days.

CEO Thomas Hill was extremely bullish on the call noting that he hasn’t seen demand trends this strong in a while. Pricing has increased, a sign that customers are ready and funded to start building and paving projects as soon as Mother Nature cooperates.