I’m completing my due diligence and analysis process for the newest Rhino Stock play to hit our portfolio – more on that in a bit – so, with that in mind, I’m keeping this week’s market update short and sweet…

Four of our portfolio companies announced earnings in the last week or so, and all four beat the outlook expected by Wall Street analysts. First, we’ll take a look at earnings, then I’ll give you a preview of our newest watchlist play:

SPX Corporation (NYSE:SPW) announced earnings this past week, completely obliterating Wall Street’s expectations of 71 cent per share by delivering income of a full dollar for Q2 2010. Revenue numbers fell in line with expectations. Better still, management guided Q3 EPS in the $1 to $1.10 range, exceeding analyst expectations of 89 cents.

With a capital-heavy business model, SPX Corp. took some significant knocks in 2009 as revenues were slow to recover. The numbers announced by the company last week should start to accelerate this stock’s comeback.

Our wholesale power generation play, NRG Energy (NYSE:NRG) has been another stock that’s underperformed the broad market as commodity costs, expensive capital expenditures, and stifled energy demands impacted its financials. Again though, the company surprised analysts with second quarter earnings numbers of 81 cents per share – nearly twice estimates of 42 cents. As with SPX, NRG Energy’s revenues fell largely into line with estimates.

That phenomenon of increasing income and in-line revenues is worth watching – after all, it means that efficiency is improving and margins are widening, two factors that could suggest that a more bullish model is needed for these firms. Ahead of earnings numbers, RBC analysts raised their view of NRG’s shares to outperform, with a price target of $30.

Becton, Dickinson (NYSE:BDX) is another stock that pleased investors with its quarterly numbers, the medical supply giant announced earnings of $1.30 per share. Analysts had hoped for $1.24.

Becton is one of the three stocks that’s currently in negative territory for our Rhino Stock portfolio (coincidentally, NRG is another), but that could soon change. Becton has been getting increasing attention lately, including  an East Coast Asset Management research report on the stock. The hedge fund thinks that Becton investors could see a double-digit upside in the next few quarters thanks to a deep economic moat and substantial misgivings about the stock’s real performance.

I’m inclined to agree (you can download the research report here).

Our best performer for 2010, Berkshire Hathaway (NYSE:BRK.B) announced its earnings numbers on Friday, outpacing earnings expectations despite some derivative losses for the second quarter. While the effects of derivatives were negative, the company saw improvements across most of its business lines, and I’m pleased to see that the rally shares have seen this year are being backed up by fundamental performance.

We’re currently up 21.6% on the position since adding the stock to the Rhino Stock Report’s portfolio in January.

Adding a Financial Stock to The Watchlist

Despite significant economic improvements since 2008, many investors continue to eschew the financial stocks. That’s a big mistake when you consider the fact that many of these firms are still enjoying booming business. But while investor pressures hold shares down temporarily, others could be enjoying a great time to pick up shares.

That’s the case with AllianceBernstein (NYSE:AB), a $2.8 billion asset manager that I’m adding to our Rhino Stock Report watchlist this weekend.

AllianceBernstein invests on behalf of institutional and retail clients in efforts to generate the highest returns possible. In exchange, the company earns asset management fees. But AB isn’t your typical money manager. The company’s massive value prospect, massive dividend, and unique business structure make it a potentially lucrative opportunity right now.

In fact, my valuation model places this stock at between a 16% and 70% discount to where its share prices should be. That’s a disparity that likely won’t last long as AB continues to generate substantial income…

Not so fast – don’t buy shares of AllianceBernstein just yet. I’m completing my due diligence on this stock this week… I’ll have my detailed report (along with buy and sell target prices) to your inbox later this coming week.

Until then, watch out for earnings of Computer Sciences Corp. (NYSE:CSC) on August 11.

There’s no question that 2010 is already proving to be a tough year for stocks. Until this week almost all broad-based stock indexes were down close to 5% on the year, and economic fundamentals don’t seem to be improving much either. That said, not all stocks are having as rough a time of it…

We’ve added two new positions to the Rhino Stock Report’s model portfolio in 2010 – both are currently up on the year with an average of 8.6% gains. But the S&P’s next stumbling block could keep us from adding a third position until March. Here’s why:

A colossal breakdown in the S&P 500 in mid-January caused the index to fall below the 50-day moving average, a key technical support level. And although the market has staged a serious comeback in the last couple of weeks, that 50-day moving average could prove to be too tough of a resistance level right now.

With emphasis on economic numbers – like interest rates and jobs – this week, the fundamentals are driving the market. Since our economic fundamentals have been anything but bullish this year, the chances of seeing a break above the thin blue line are diminished.

That’s not to say that the S&P won’t move above the 1109 level next week – only that it’s going to take more bullish power than we’ve currently got on tap. For us, that means that we’re not going to make any new moves until we see a bounce off the 50-day or a breakout above it. (To learn why that’s significant, watch Planning Your Entries and Exits With Technical Analysis)

The Fed Fouls the Markets

Stocks are trading lower today thanks to the Federal Reserve’s decision to increase a peripheral interest rate after yesterday’s market close. To be clear, the rate (which dictates how much interest banks must pay out in emergency loans) doesn’t have much of an effect on monetary policy – but the change still has investors shaken.

That’s because a rate increase of any sort was so unexpected. The Fed slashed interest rates following 2008’s financial meltdown in order to lower the cost of capital and add liquidity to the seized-up credit market. An increase suggests that economic fundamentals are improved enough to increase the cost of borrowing – something that investors don’t see right now.

Although it’s unlikely the Fed will hike more significant rates, expect investors to continue to be anxious until the next bout of economic numbers comes out and they forget about rates once again…

Our Big Earnings Week

Next week is a significant week for a few of the companies in our Rhino Stock Report model portfolio. Three companies – NRG Energy (NYSE:NRG), J.M. Smucker (NYSE:SJM), and SPX Corporation (NYSE:SPW) – will announce their quarterly numbers to the public. I’m optimistic about all three stocks, so don’t expect a significant change-up in our portfolio positions next week. I’ll fill you in on the results in next week’s Market Recap…

With earnings season finally drawn to a close, now seems an appropriate time to review our open positions here at the Rhino Stock Report. On the whole, we’ve seen stellar performance from our Rhino plays in 2009, and there are still chances this year to make new gains… But let’s take a look at some older open picks first.

J.M. Smucker (NYSE:SJM): The J. M. Smucker company has been one of our best-performing holdings to date — currently up 58% since it was recommended in April. Smucker has been getting new analyst and investor attention lately following yet another solid quarter of earnings released on November 20. And while those new shareholders have been late to the party, with the stock currently at a 52-week high, I see this one traveling higher still.

SPX Corp. (NYSE:SPW): While SPX Corp has had some trouble delivering the numbers we’ve been looking for in its last couple of quarters, a late November dividend and current 20% gain on the stock serve as a good reminder of why this “boring” stock was worth investing in. Recently, SPX’s CFO noted that the current economy made for a “realistic merger and acquisition environment.” That’s good news for a company that’s made considerable growth through acquisitions… the latest of which was completed on December 10.

Computer Sciences Corp. (NYSE:CSC): While CSC’s latest quarter release seemed comparatively tough at first glance, a closer look revealed that one-time income from the second quarter of fiscal 2009 accounted for a lot of the “decline.” All told, it’s business as usual at CSC, with a seemingly constant stream of new contracts flowing in. At present, the company is our biggest open gain up 65.11% since March.

Molson Coors (NYSE:TAP): This beer maker has been making good on our bets since we doubled down back in March. We’re currently up an average of 21% on the double-sized stake. The brewer’s third quarter was solid, with increased cost savings from its joint venture with competitor SABMiller (OTC:SBMRY). And right now, it looks like the currency conversion issues that plagued us in the first quarter of the year could work in our benefit coming into the fourth quarter — a catalyst that could push shares higher yet in early 2010.

NRG Energy (NYSE:NRG): While NRG is currently our newest position, the stock is performing strongly, currently up more than 8% in the last month. That has been thanks in part to increased analyst interest in the stock on our coattails and strong call option interest that’s stacked in our favor. The company’s pursuit of profitable green initiatives should continue to bode well for us going forward.

Taking New Stakes in Rhino Stocks

I know that new subscribers are looking for guidance on whether it still makes sense to take positions in our open Rhino Stocks, particularly when so many of them are up so much. Right now, the only stock that is still a reasonable buy is NRG Energy. Disciplined investors never chase the market, and our other plays have already had too much time to run ahead.

That said, we’ll be taking new positions in December and January, so there will still be plenty of chances to get into stocks that remain within buying range. Watch your inbox this month and next for my next Rhino play as well as your Technical Analysis webinar.

The uptrend the market’s been riding for the last two months finally took a breather this week, but does that mean we’ve seen the end of gains this year? Lots of people, especially technical guys are beginning to think so.

But not so fast… let’s take a look at the charts:

On Monday, the stock market took a big dive on investor fears about financial industry earnings and jobs numbers. That drop signaled a big change in the way the market’s been going for quite some time now; it was the largest single-day drop since late February.

Taking a look at the chart above, it’s clear how Monday curbed the uptrend. What’s also starting to unfold are the technical reasons to worry about more of a drop in May – right now, a descending triangle is starting to form, a bearish signal that the market’s due to break out to the downside.

But those who see the patterns alone pushing the markets down in the next week will probably be sorely mistaken. While a bearish chart would normally be a dark cloud, the fact is that fundamentals are carrying the markets right now. Chart patterns are going to be secondary for a while.

Now, that doesn’t mean that things are going to be great for the rest of 2009 – the are a lot of fundamental reasons to forecast another pullback in the markets, but I think that the biggest takeaway from this trading week is the fact that once again we’re seeing a market that’s yet to make up its mind. When it does, we’ll see a decisive move one way or another, but until then, there’s still a lot more information for investors to digest.

Regardless of what anyone says, suggesting that the market will rise next week or fall next month is pure speculation. Let’s just stick to picking Rhino Stocks and leave the guessing games to the gamblers.

Harmful Headlines

As usual, the headlines in the financial media have been anything but helpful in cutting through the clutter of market “news” that’s been going around. On Thursday, news outlets grimaced at an increase in new jobless claims for the week, pushing aside the fact that the four-week average of jobless claim initiations – a more trustworthy number actually dropped slightly. That’s good.

Earnings announcements continue to be a big deal this week – companies reporting tomorrow include 3M Corp (NYSE:MMM), Ford Motors (NYSE:F), and Schlumberger (NYSE: SLB).

3 Reasons to Watch the Market Next Week

From an earnings perspective, next week should be an interesting one. On April 28, EMCOR Group (NYSE: EME) reports their first quarter earnings. We’re up 22% right now on the stock. Also reporting next week is SPX Corporation (NYSE:SPW). The company reports their Q1 earnings on April 29. SPX Corp has been a wild ride of late – we’re currently up 2.5% on the stock.

With one of our watchlisted stocks also reporting earnings on April 28, this should make for an interesting week indeed.

Disclosure: EME and SPW are positions in the Rhino Stock Report’s model portfolio.