As an old colleague often reminds me, “trading is easy, but investing is hard.” When you trade stocks, you only need to stick around for a few days or weeks to see whether your investment thesis is correct. But if you invest — and really want to score big gains — then you need to find unloved stocks and then remain considerably patient. We’ve all lost faith in a stock, only to see it much higher a year or two after we’ve sold it. 

#-ad_banner-#I’m reminded of that lesson every day. For my $100,000 Real-Money Portfolio, I intentionally seek out stocks that are in a rough stretch. Whether it’s the economy, an out-of-favor sector or simply subpar recent results, these stocks are often so unloved, that they trade pretty close to a bottom. Still, there’s no way to call an absolute bottom, and even though these stocks were typically off by 50%, 60% or 70% from their 52-week high, a slumping market in the second-quarter took most of them even lower.

Yet, like I said, considerable patience is required with this approach. It has stood me in good stead in the past, and will do so again. 

Even as I look at these as long-term investments, I still need to track quarterly results to ensure the investment thesis I’ve laid out remains in place. With this in mind, here’s what to look for as several of my portfolio picks release quarterly results in the week ahead.

1. MDC Partners (Nasdaq: MDCA)  
Earnings report: after the close of trading on Monday, July 30.

This company will release results just a few hours after this article is published. I bought shares of this leading ad agency in early April, noting that shares were quite inexpensive.

That thesis was confirmed about a month ago, when MDC Partners acquired a key rival — at a significant premium to MDC’s valuation metrics.

This isn’t a story about earnings-per-share, though. MDC Partners has made so many acquisitions, that goodwill is eating into GAAP profits. Instead, investors are focused on operating cash flow. 

Frankly, 2011 was a disappointing year. MDC poured so much of its profits back into the business, that it generated just $9 million in operating profits, down from $30 million the year before. Management knows it needs to do better. First-quarter results were a good start: MDC generated $7.5 million in cash flow (after numerous accounting adjustments). 

That number likely moved north of $10 million in the second-quarter, and investors will be watching closely to see how much higher it may get from here. Just as important, management is likely to discuss expected cash flow for the next two quarters.

If guidance for each quarter is above $10 million, then this stock may finally start a long-awaited upward move. 

2. Goodyear Tire (NYSE: GT)  
Earnings report: Tuesday, July 31.

For a company with such a long track record and a $3 billion market value, its share price sure can be volatile. As I write this on the afternoon of July 27, shares are up roughly 7% — for no apparent reason. The neck-snapping moves are the result of the European crisis, which some investors believe will heavily affect global tire sales.

But the situation in Europe is simply irrelevant. Even if consumers hold off buying new cars, they still need to replace tires. And all signs point to an improving backdrop for after-market tire sales. Yet, that’s not why I bought this stock. My focus is on Goodyear’s costs. As I noted in early June, the prices for natural rubber and synthetic rubber have been steadily dropping. I don’t expect Goodyear to exceed second-quarter profit forecasts of $0.45 a share — there is a one-quarter lag before raw-material price changes have an effect. Instead, I think Goodyear will meet — or likely raise — third-quarter and fourth-quarter profit guidance. 

This remains a remarkably inexpensive stock, and rising estimates could be the catalyst to get shares moving higher. 

3. Marathon Oil (NYSE: MRO)  
Earnings report: Wednesday, Aug. 1

I stand by my long-term view for this energy driller. (which you can read about here).

But my short-term timing was lousy. I bought this stock when oil prices were surging in the late winter, which turned out to be the cyclical peak. Though oil prices have yet to return to those levels, at least natural gas prices are finally making a move, rising more than 50% in the past few months. 

As I noted in February, Marathon Oil has acquired a vast amount of acreage of the Eagle Ford shale in Texas, and is expected to ramp up production sharply in coming quarters. As with my other picks, I think it will take 12-18 months for Marathon’s business model to fully mature, and though shares are up 15% since bottoming out in late June, I still see solid upside ahead. 

On the conference call, listen for a discussion of cash flow projections as Marathon’s energy plays get fully exploited over the next few years.

4. Calgon Carbon (NYSE: CCC) 
Earnings report: Wednesday, Aug. 1

This maker of filtration equipment should hold few surprises when quarterly results are announced: much of its business is tied up in multi-year contracts. Yet, it’s the progress on a pair of environmental initiatives that may help to get shares going. As I spelled out back in March, demand for the company’s carbon-based air and water scrubbers could rise once regulations tighten. I’ll have a lengthier discussion of this topic after results are released.

Lastly, Maxwell Technologies (Nasdaq: MXWL) and Exide Technologies (Nasdaq: XIDE) are set to weigh in on Thursday. Aug. 2, and Friday, Aug. 3, respectively. Little has occurred since I profiled Maxwell three weeks ago and reviewed Exide’s quarterly results in early June.

Both of these stocks toil in the energy storage business, and each has a deeply undervalued stock price. I’ll be reviewing quarterly results with a fine-tooth comb and will report back after the numbers — and management’s commentary have been digested.  

Action to Take –> Finally, earnings season has revealed some fresh bargains, and I hope to deliver another new pick to you in coming trading sessions.

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