The following companies have increased their allocations to capital expenditures substantially over the past five years. This may anticipate higher revenues, as these companies are likely predicting a rise in the demand for their goods and services in the near future.
Furthermore, Wall Street analysts expect these stocks to increase their earnings per share (EPS) significantly over the next five years, outperforming the S&P 500 index.
Digital Turbine Inc
The first company that has the above listed criteria is Digital Turbine Inc (APPS, Financial), an Austin, Texas-based global provider of application software solutions to device application developers, original equipment manufacturers and mobile operators.
The company allocated $4.845 million to capex in full fiscal year 2020 (which ended on March 31), growing tremendously from $67,000 spent in full fiscal 2015.
Wall Street analysts predict that Digital Turbine’s EPS will gain 25% every year over the next five years, while the S&P 500’s EPS is expected to grow by 3% per year over the next five years. As of June, two analysts on Wall Street recommended a strong buy rating and three recommended a buy rating for the stock, establishing an average target share price of $11.21.
The stock price closed at $10.42 per share on Tuesday for a market capitalization of $909.96 million. The share price grew 131% over the past year.
The stock has a price-book ratio of 11.98 versus the industry median of 2.83 and a price-sales ratio of 6.53 versus the industry median of 2.18.
Exelixis Inc
The second company that has the above listed criteria is Exelixis Inc (EXEL, Financial), an Alameda, California-based oncology-focused biotechnology company engaging in the commercialization of new therapies to treat cancer patients.
The company has allocated $12.834 million to capex in full fiscal year 2019, which represented an impressive growth versus $474,000 spent in full fiscal year 2014, hitting two peaks of $33.297 million in 2018 and $21.143 million in 2017.
Wall Street analysts predict that Exelixis’ EPS will grow by 46% every year over the next five years. As of June, one sell-side analyst on Wall Street recommended a strong buy, five analysts recommended a buy rating while four analysts recommended a hold rating for this stock. The average target price is $29.85 per share.
The stock price traded at $23.42 per share at close on Tuesday for a market capitalization of $7.18 billion. The share price increased by 12.8% over the past year.
The stock has a price-book ratio of 4.24 versus the industry median of 4.32 and a price-sales ratio of 7.53 versus the industry median of 15.99.
YETI Holdings Inc
The third company that has the above listed criteria is YETI Holdings Inc (YETI, Financial), an Austin, Texas-based designer and retailer of outdoor and recreational products serving the North American, Japanese and Australian markets.
YETI Holdings’ allocation to capex grew by a yearly average of 46.5% over the past five years. The company invested $32.08 million for the acquisition of property, plant and equipment in full fiscal 2019, increasing dramatically from $3.82 million invested in full fiscal 2014. Capex peaked at $42.2 million in 2017.
YETI Holdings is now expected to increase its EPS by 20% every year over the next five years. As of June, six analysts recommended a strong buy rating and five analysts recommended a buy rating for this stock, giving it an average target price of $35.64 per share.
As a result of 32.5% growth over the past year, the stock price traded at $37.10 per share at close on Tuesday for a market capitalization is $3.23 billion.
The stock has a price-book ratio of 24.65 versus the industry median of 1.29 and a price-sales ratio of 3.45 versus the industry median of 1.28.
Disclosure: I have no positions in any securities mentioned.
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