Air Transport Services Group

The plane-leasing company reported higher-than-expected revenue for the first quarter with earnings a penny light. Higher expenses for training the flight crews to man Amazon’s 20 leased planes will dissipate in the second half of the year. Management didn’t change its guidance for the year, and noted that profitability will improve as the Amazon planes take flight. Currently, Amazon is leasing five planes from Air Transport (NSDQ: ATSG), 15 deployed by year-end 2016 and 20 deployed by mid-2017.

Amazon’s aggressive plan to control its distribution included an agreement with Atlas Air last week almost identical to the Air Transport leasing agreement. Amazon will lease 20 Boeing 767-300s from Atlas and take a stake in its company. While these deals are positive for both companies, the effect on Air Transport will be larger as it is one third the size of Atlas in terms of revenue.

Air Transport management noted that it has already secured the planes needed to fulfill its deal with Amazon and is considering buying more of these hard-to-find aircraft to feed future demand from Amazon and other customers. These medium-body planes are perfect for the medium-haul deliveries these companies demand.

Brunswick

Despite reporting a strong first quarter, Brunswick’s stock sunk 6% late last month. Earnings per share of 71 cents met expectations, but revenue missed by 1% because of currency headwinds.

Investors apparently were disappointed that management didn’t boost annual guidance higher considering the strength of its boating business.

We’re on board with management, which has always chosen a conservative path. Guidance for earnings of $3.40 to $3.50 represents 18% growth with upside if the boat business remains robust in the second quarter, when most boat revenue is booked.

Brunswick (NYSE: BC) offers tremendous value here and could leap another 40% to our $67 target as it integrates and grows its fitness lines alongside its traditional boat business.

Charles River Labs

Things are going swimmingly for Charles River Labs (NYSE: CRL). The company reported 98 cents in earnings per share for the first quarter, 8 cents better than expected and up 24%. As we predicted, demand remains strong from biotech and pharmaceutical companies hungry for new drugs. EPS estimates for the year increased by 5 cents, from $4.32 to $4.45.

As estimates creep higher, we are nudging our price target up from $92 to $95 and expect to continue raising it as the year moves along. Another 17% upside remains in the stock, even after increasing 9% since Profit Catalyst Alert’s initial recommendation. The company’s acquisition of WIL Research is winning it more of its customers’ research budgets.

Earnings have yet to reflect any income from WIL, the purchase of which closed on April 4. We expect numbers to continue to climb as biotech, pharmaceutical and agricultural biotechnology customers outsource a larger share of their research to Charles River.

Criteo

Although you wouldn’t know it from the market’s initial reaction to its first-quarter earnings report, Criteo (NSDQ: CRTO) continues to knock the cover off the ball. A squeamish stock market sent the shares down almost 6% on the news. I am pounding the table on this stock and raising my price target from $59 to $64 based on higher estimates for 2016 and 2017.

The company continues to benefit from the skyrocketing trends of e-commerce and mobile device transactions. Fears that ad-blocking software would depress revenue growth have proven totally off base, with revenue growth accelerating to 37% in the most recent quarter, up from 31% and 30% in the two previous quarters.

Earnings for the first quarter grew 34%. Although there are still three quarters to play out until year-end, estimates for annual earnings growth of only 24% look low. It is rare to find a company growing revenue and earnings 25% to 30% and trading with a price-to-earnings ratio in the high teens. Criteo’s earnings for the year are expected to grow 28% to 30%, yet the stock trades at 18 times 2017 numbers.

Concerns that the midpoint for second-quarter revenue guidance is $1 million less than current estimates of $161 million seem completely misplaced. Criteo has routinely outperformed guidance. A case in point is the just reported quarter in which revenue came in at $162 million versus guidance of $153 million to $158 million.

Revenue from Criteo’s Universal Match software, which matches consumer activity from laptops and computers to ads delivered on mobile devices, is exploding. This product accounted for 40% of company revenue in the first quarter, up from 25% in the previous quarter.

All of Criteo’s metrics are moving in the right direction. Unlike most fast-growing tech stocks, Criteo earns serious profits and trades at a dirt cheap valuation.

Photronics

We eagerly await Photronics’s (NSDQ: PLAB) earnings release on May 18. As you may recall, the company lowered estimates for the second quarter earlier this year after its mainstream integrated circuit photomasks had weak sales. These mainstream masks make up almost half of Photronics’s revenue and have been weak as global demand for mobile phones declined. Demand for high-end integrated circuit and high-end flat-panel displays remains strong but did not compensate for the sharp drop in lower-end products.

Current second-quarter estimates are right in the middle of management’s guidance. Expectations for flat earnings and revenue for the second half of the year look conservative and give the company a bit of breathing room in case the demand for mainstream integrated circuits takes longer than expected to pick up.

SolarEdge

Despite reporting earnings per share that were 10 cents better than expected and providing guidance within the expected range, SolarEdge (NSDQ: SEDG) is melting.

Investors continue to worry that problems at SolarCity will destroy the company. Although SolarCity used to be SolarEdge’s largest customer, it now accounts for less than 10% of revenue.

Despite what I estimate to be a 30% drop in SolarCity orders, SolarEdge grew revenue 45%. Earnings per share were 51 cents, up 155% from 20 cents. Accounts receivable days and inventory days, balance sheet metrics that divulge if a company is having trouble collecting bills from customers or if sales are falling short of expectations, were in great shape.

Although growth is slowing from triple-digit rates to the mid-30s, the stock price reflects a much worse expectation. After increasing estimates for 2016, nervous analysts lowered growth estimates to 25% for 2017. Yet SolarEdge has beaten estimates every quarter since the recommendation and now trades with a price-to-earnings ratio of 8 versus the 25% growth.

I feel the pain of this treacherous drop but am astounded that the stock is being punished so severely. This selling looks like a wholesale purge of all of solar investments and gives investors a fabulous buying opportunity.

Vera Bradley

Since hitting a high in early April, Vera Bradley (NSDQ: VRA) is off almost 20%. A steady drumbeat of bad news from Macy’s, Gap and Fossil, all of which have been battered roughly 35% in the same time frame, has investors on edge. Weak sales from these retailers planted fears that all mall-based retailers would suffer the same evaporating sales.

Although Vera Bradley is certainly not immune to consumer sentiment, I would note that Fossil specifically called out handbags as a strong category. Many of Vera Bradley’s new styles mirror the single-color-leather style of Fossil’s bags.

Estimates assume only 3% sales growth for Vera this fiscal year (ending January 2017) and 5% for the April quarter, which will be announced June 1. New styles look fabulous and are garnering rave reviews from customers that should help the company bag up some good results.