Who would have thought an Egg McMuffin at 3 p.m. could save the day? McDonald’s shareholders sure are happy that the founder of fast food opted to offer all-day breakfast. The extension of the breakfast menu gave McDonald’s a boost to sales and help the company beat earnings by 8 cents a share in its most recent quarter.

McDonald’s is one of the many companies we’ve noticed bucking the trend of doom and gloom being broadcast over the airwaves.

For those of us with our eyes glued to pricing screens and charts, the market’s behavior is nerve wracking. Pundits warn that a bear market has just begun and that weakness in particularly prophetic market indices point to further declines. If one were to listen to CNBC all day (I don’t—too distracting), you might think that the wheels are falling off the economic bus.

I disagree.

I’ve spent my career digging into the details of data, and I’ve often found that when pulling apart the supporting evidence a different story emerges.

For example, many market strategists are worried about a decline in industrial production. A drop in this metric is often said to be a reliable predictor of recessions and one of the more ominous signals for a bear market.

However, the headline statistic of a half percent decline in U.S. industrial production over the past three months doesn’t begin to tell the whole story. Output from U.S. factories is basically unchanged over that time. A massive 62% drop in oil and gas drilling and a 10% drop in mining output have overwhelmed the index. Flat domestic factory production is not exactly the fodder of financial Armageddon.

This brings us back to McDonald’s. Although McDonald’s is too large a stock for Profit Catalyst, I am finding many smaller companies that are showing a similar improvement in earnings based on a fundamental shift in their business model.

My days are consumed drilling through company financials and their corresponding charts. I am astounded at how many companies have solid numbers and yet dismal stock price charts. While many are simply cheap, I’m looking for the gems that have the gas to move higher.

I’ll be posting some new recommendations soon that I’ve discovered while working through this data.

I don’t disagree that the deceleration in China will hurt some companies with global exposure and that a decline in oil and gas production will crimp growth in adjacent sectors. Yet eight out of the S&P’s ten sectors are down in 2016 and more than half declined in 2015. The carnage has been broad and I believe, is overdone.

According to FactSet, 15% of companies in the S&P 500 have reported Q4 results so far this year. Of those, 73% beat earnings estimates, a number higher than the 5-year average of companies beating estimates.

Stop Losses

I’ve had some questions from subscribers about sizing positions and stop losses. I am a firm believer that every investor has a unique risk profile and a corresponding appetite for volatility. I do not feel my general advice can fit each portfolio.

Launchpad picks are not quick turnaround trades. That said, each recommendation is based on the fact that some fundamental catalyst has been announced and should start to improve earnings in the near future. I expect most of the stocks to reflect the improving fundamentals over the next six to twelve months.

I personally like the dollar cost average (DCA) method to establish positions. I simply decide what my total investment will be and buy one quarter of that position over the next two to four weeks.

I do not issue stop loss limits. I’ve found that fixed stop loss limits tend to wash me out of a good position at exactly the wrong time. What I will do for you is constantly monitor the fundamentals of a stock and reassess its value. In super volatile periods, the value and the stock price will often be out of whack. The flip side of this is that when a stock moves up to full valuation, I will issue an alert when I think the time is right to sell and collect profits.

Please keep your questions coming. I appreciate your being a subscriber and look forward to continuing the dialogue.

We have several earnings announcements coming up in our portfolio.

Solaredge (SEDG) will lead the parade with earnings on Wednesday, Feb. 3. I’ll be looking for management to appease investors’ fears regarding Solarcity’s exit from Nevada and SunEdison’s expansion plans.

Charles River Labs (CRL) is next with earnings slated for Wednesday, Feb.10. While we just heard from management regarding their purchase of WIL, the earnings call should focus on demand for CRL’s outsourcing services.

Although Photronics (PLAB) has not announced its earnings date yet, it typically occurs in the second week of February. Based on management’s exuberant stance at a recent investor conference, I expect continued good news regarding trends for photomasks.

Vera Bradley (VRA) will announce its fourth quarter earnings on March 9. I hate the long lag time between the end of fourth quarter and earnings announcements due to the annual review by auditors. But I believe investors will rewarded for the wait as Vera discusses trends in their newly designed bags and improvements in full price selling for their traditional floral bags.