OFF THE CHARTS

A monthly screen for interesting stocks*

Given the rocky start to 2016, you can be forgiven for thinking corporate profits are going down the toilet. Not so. This month we look for positive revisions to analysts’ earnings estimates. Our screen finds the North American firms with the most-improved sales and earnings-per-share expectations over the past month.

Paylocity manages payroll for mid-sized companies across the U.S. This cloud-based company just reported its strongest quarter since going public in 2014. Revenues are growing at 40% per year, thanks in part to stronger than expected adoption of the Affordable Care Act, which in turn is prompting analysts to raise their expectations. In January, analysts projected this company would earn just under 10¢ (U.S.) per share over the next year; now that figure is at 25¢. In a recent note, Scott Berg of Needham & Co. LLC writes that the strong market demand could drive even more upside to his already bullish thesis. Northland Power’s profits are literally blowing in the wind. The builder and operator of renewable power generating stations recently released stronger than expected guidance for 2016, which has analysts raising their own outlooks. Northland’s Gemini and Nordsee One offshore wind projects are providing much of the boost. Both projects are on schedule and on budget. Gemini, which will produce 600 megawatts, is now projected to earn higher pre-completion revenue than previously thought. Jeremy Rosenfield at IA Securities, one of many analysts who raised their estimates, is also upping his rating on the stock to Strong Buy. Northland isn’t the only renewable power generator with a strong outlook. Analysts are raising their sales estimates for Boralex— which focuses on wind, hydro, solar and gas-fired power—after its latest quarterly report. Rosenfield said the company is not only on track to reach its target to produce 1.65 gigawatts of power by 2020, but it could possibly exceed it. Overall, Rosenfield calls Boralex an attractive investment based on the stability of its portfolio (nearly all of which is under long-term contract), its free cash flow per share growth and “unrecognized value associated with its large onshore and offshore development pipelines.”