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Attention Investors: There’s Still Time to Buy These Stocks That Just Reported Blow-Away Results

We had some action in the market yesterday that was based on solid results that came in ahead of expectations and signs of continuing solid fundamentals.

I am talking about the fourth-quarter and year-end results that were posted yesterday for Precision Drilling Corp. (TSX:PD)(NYSE:PDS) and Canadian Tire Corporation Limited (TSX:CTC.A).

Precision Drilling

Let’s start with Precision Drilling.

Precision Drilling shares have a six-month return of 25%, as the company generated $37 million in cash flow in the third quarter of 2017 and saw a 47% increase in revenue, and as the company began reporting that activity levels were strengthening, day rates firmed and expectations became more optimistic.

The stock dropped almost 4% after the company reported fourth-quarter results, but the results were strong, so this weakness is probably a reflection of the fact that oil prices have weakened from recent highs of $68 to just over $60 currently.

Back to fourth-quarter results.

Revenue increased 15% to $347 million, adjusted EBITDA was $91 million, 40% higher than last year, funds from operations were $28 million, 147% higher than last year, and long-term debt was down. Lastly, free cash flow was $6 million.

All signs point to continued strong results this coming year.

Pricing has firmed, activity is increasing (management expects more than 70 rigs will be working in the U.S. by end of this quarter compared to the 65 running today), and while debt is still high, it is starting to be reduced and can be expected to decline further this year, as the company’s cash flow generation accelerates.

As the sector ramps up, we can expect Precision to outperform.

Canadian Tire

Canadian Tire also reported stellar results that came in above expectations.

The stock rallied more than 5% yesterday as a result, as the company continues its transformation with great success.

In the fourth quarter, same-store sales growth came in at 3.5%, and EPS came in at $4.10, 18.5% higher than last year and significantly above consensus expectations of $3.80.

Margins increased nicely during the quarter, as the company continues to work on efficiency and best practices to achieve this. The EBITDA margin was 14.1% in the quarter compared to 13.9% in the same quarter last year.

Another retailer that is performing very strongly is Indigo Books and Music Inc. (TSX:IDG). Same-store sales increased 7.9% in the fourth quarter, as online sales and the general merchandise category are still booming, with up to 20% revenue growth.

All of these stocks are fundamentally strong, benefiting from their company-specific strengths as well as strength in the macro environment, and it’s not too late to get exposure to these booming companies.

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Fool contributor Karen Thomas owns shares of INDIGO BOOKS & MUSIC INC. and PRECISION DRILLING CORPORATION.

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