After two torrid weeks of earnings announcements, I will enjoy a very welcome pause. I have a list a mile long of candidates I want to analyze for possible addition to the Profit Catalyst Portfolio. In that vein, you likely saw Monday’s portfolio addition of PRA Health Systems (NSDQ: PRAH). I like the dynamics of the contract research organization space (CRO in industry vernacular), especially those like PRA that are more conservative with the deals they book as backlog. See below for a recap of industry brethren Charles River’s most recent quarter.

Unfortunately, our Edgewell Personal Care puts expire this Friday. Despite a bit of recent weakness in the group, the stock price is not close to our $65 strike. With very little value in the puts, I think it’s worth holding on to them with the chance that the stock moves lower; however, it is possible they expire worthless. I am still confident in the bear case against Edgewell so will likely be adding more put trades on this name in the future.

We do have Wal-mart reporting this Thursday, May 18th before the open. While it will not call out any of our stocks by name, it’s quite possible management’s commentary on “SKU rationalization”, aka, carrying fewer items in its stores, and talking up price pressure on suppliers will knock down Edgewell and Church & Dwight (NYSE: CHD)- both put positions. Kroger doesn’t report until June 15.

Around the portfolio…

Charles River Labs (NYSE: CRL) reported a significantly better than expected quarter last week. While most of the $.14 beat was due to a lower tax rate and a venture capital gain, revenue growth was strong. Organic revenue growth (growth after subtracting revenue gained via acquisitions) was 8.2%, at the high-end of the company’s 7-8.5% guidance. I still like Charles River’s unique expertise in pre-clinical and post-approval testing for drug candidates and approved products.

The Chemours Company (NYSE: CC) enjoyed quite a bit of good press last week. JPMorgan upgraded the stock to Overweight from Neutral noting Chemour’s proprietary set of “very profitable newer generation refrigerants with patent lives extending to 2022 with excellent growth potential,” Zekauskas tells investors in a research note. He raised his price target on the shares to $50 from $39.

The stock was also highlighted positively by Barron’s financial magazine. Ironically an article highlighting pricey stocks pointed to The Chemours as one of the few stocks where earnings estimates have risen faster than its stock price, making it a bargain in an expensive market.

Ichor Systems (NSDQ: ICHR) reported its first quarter last Thursday. The company had already pre-announced a very robust quarter earlier in the month in conjunction with its secondary offering. With all the good news already revealed, the stock sagged a bit but there was nothing in the release to curb my enthusiasm for the stock.

Jazz Pharmaceuticals (NSDQ: JAZZ) first quarter was a bit sloppy, but I recommend subscribers buy the stock on the dip. After the market close on May 9, the stock was trading down to $155, still higher than my official $149 buy limit, but a good entry price. Full year estimates remain at $11.00.

Sales missed by $1 million, a miss of less than 1%. Sales of the company’s lead narcolepsy drug, Xyrem, were up less than expected due to Medicare and Medicaid patients skipping doses as they work their way through deductibles.

However, sales of new product, Defitelio, used during stem cell transplantation, are ramping up. Also, Jazz has several late-stage product trials that look very promising and its cancer drug, Vyxeos, is awaiting FDA approval. I think the stock could race higher as investors assess the potential of these new drugs.

SmartSand (NSDQ: SND) is finally bouncing due to a strong quarter and a rebound in the price of oil. Although SmartSand’s fortunes aren’t tied directly to the price of oil, most of the energy group gets tossed around like puppets with oil volatility. Based on SmartSand’s recent quarterly results, it’s obvious its customers aren’t basing purchasing decisions on short-term fluctuations in the price of oil.

SmartSand shipped 100% more volume of its white fracking sand than it did in the prior quarter and 332% more than the prior year. Revenue was 38% higher than expected. Earnings were a few pennies light due to investments made in increasing production, the best reason to miss estimates.  

As a new IPO, there were few available broker estimates available when I recommended SmartSand. Those estimates are coming in even higher than I had predicted, so I’m raising my price target to $25.00 from $22.00.

Vulcan Materials (NYSE: VMC) blew away first quarter estimates. The company reported $.32 up slightly from last year’s first quarter. Revenue, which analysts had expected to be down slightly due to perfect weather conditions last year, grew 4%.

Management noted that the pre-construction pipeline of projects just keeps getting bigger. The bulk of its growth to date has been from private construction but several large spending bills passed last year are beginning to generate demand for aggregates and asphalts.