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Tickers in this Article: KO, GS, JPM, HOG
A solid earnings announcement can be a tempting reason to get into a stock. However, if the near-term outlook beyond that quarter seems cloudy or research reveals the shares aren't a good bargain it might make sense to avoid the temptation to buy the stock. The following are companies that are coming off better than expected quarters, but which should probably be avoided for the time being.

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Drink Up?
Coca Cola (NYSE:KO) reported its first-quarter numbers on Tuesday. The soft-drink company turned in a profit of 80 cents per share excluding items. Analysts were expecting a gain of 74 cents. Thinking about the bigger picture, in the coming year the company does look well positioned to reap the benefits of increased consumer spending and what could be a boost in spending in restaurants. Also, for the long run the shares could run much higher from here as demand for soft drinks should increase with population size and wealth.

However, there are some valid arguments against pulling the trigger right now. For example, while it beat estimates on the EPS line, its revenue line could have been stronger. In addition, it would be nice to see a bump up in volumes and revenue in North America, which is a big market, before diving in headlong. Finally, the company trades at around 16.1 times this year's estimate. That's not overly expensive for a company of its size and which has the potential to show solid bottom line growth in the years to come. But at the same time it isn't overly compelling either and doesn't convince mean that the shares need to be bought at current levels. Waiting for a pullback to the high $40s or low $50s seems to make more sense.

Not a Good Ride
Harley Davidson (NYSE:HOG) is a legend, with its motorcycles considered by many to be works of art that are popular the world over. The company is coming off a better than expected quarter. Specifically, earlier in the week HOG turned in a first-quarter profit of 29 cents from continuing ops and that was a hefty seven cents better than expectations. (For more on analyst expectations, be sure to read Analyst Forecasts Spell Disaster For Some Stocks.)

But climbing aboard this ride on the heels of the release doesn't seem to make much sense. One big reason is that the shares have come a lengthy way in a short period of time. When the broader markets were hemorrhaging early last year the stock was in the teens, and it now trades at over $30. A second reason is that because even though the economy is coming back, it's unlikely that huge amounts of average individuals are going to have the means or the will to spend many thousands of dollars on a pricey new ride. Third, even if the company achieves the estimate for this year and earns 94 cents, its way too expensive on a price-to-expected-earnings basis. A pullback to the $20s may make this situation more appetizing.

All That Glitters ...
Goldman Sachs (NYSE:GS) released its first-quarter earnings, and it turned in a profit of $5.59 a share, well ahead of the $4.01 a share estimate Wall Street had been expecting. However, dipping a toe in after the release makes little sense for several reasons. First and foremost, the company has been inundated with a barrage of negative press. Moreover, with talk or accusations of potential fraud (true or not) circulating on Wall Street, the shares could remain under pressure. Note that Goldman and other banks are also a concern because of the recent run they have experienced. Goldman has seen its shares soar from around the $120 level a year ago to more than $160. Meanwhile, JP Morgan Chase (NYSE:JPM) has seen its stock soar from around $30 a year ago to more than $45.

Bottom Line
A better-than-expected bottom-line EPS number is a good thing, but it doesn't mean that investors absolutely positively need to be buying just after such a release. Sometimes pondering the bigger picture, being patient and waiting for a pullback makes more sense. Such is the case with the above companies.

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