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Alberto Abaterusso
Alberto Abaterusso
Articles (1905) 

These Stocks' Sales Have Been Growing Fast

Their prices have grown faster than the US market average

January 13, 2020 | About:

Growing sales is an important catalyst to the share prices of U.S. publicly-traded companies.

The S&P 500’s total sales grew 4.3% in the past five years, pushing the share price up 59.6% to $ 3,265.35 at close on Jan. 10.

The following stocks have beaten the benchmark for U.S. stocks in terms of a higher sales growth in the observed time period, delivering large share price returns in the range of 120% to 180%.

We are aware that the past is no guarantee for future performance, but stocks that have already demonstrated the ability to grow their sales at a higher speed than the U.S. market averages have a good foundation to continue producing a positive impact on their market valuations.

Wall Street sell-side analysts have also issued recommendation ratings for these stocks that range between hold and buy.

Diodes

The first company to have a look at is Diodes Incorporated (NASDAQ:DIOD).

The Plano, Texas-based semiconductors company has grown its total revenue by 7.5% in the past five years, resulting in a nearly 120% rise in the share price.

The stock closed at $57.62 on Jan. 10 for a market capitalization of $2.94 billion, a price-earnings ratio of 21.91 and a price-sales ratio of 2.35.

According to the Peter Lynch chart, this stock may not be trading at its cheapest.

As of January, four out of five Wall Street sell-side analysts recommend holding this stock while one suggests a buy rating. The average target price is $54.67.

GuruFocus assigned the company a high financial strength rating of 8 out of 10 and a very positive profitability rating of 7 out of 10.

Cutera

The second company to have a look at is Cutera Inc (NASDAQ:CUTR).

The Brisbane, California-based developer and manufacturer of laser and other energy-based aesthetic systems has grown its total revenue by 19.1% in the past five years, causing the share price to go up by 178.2%.

The stock traded at a price of $36.67 per share at close on Jan. 10 for a market capitalization of $521.95 million, a price-book ratio of 11.84 and a price-sales ratio of 2.95.

The Peter Lynch chart indicates that the stock is currently not trading cheaply.

As of January, three analysts out of a total of four recommend buying this stock and one recommends a hold rating. The average target price of $38.67 reflects a 55% upside.

GuruFocus assigned the company a positive financial strength rating of 6 out of 10 but a low profitability rating of 3 out of 10.

KLA

The third company to have a look at is KLA Corporation (NASDAQ:KLAC).

Based in Milpitas, California, KLA provides global semiconductor and nanoelectronics companies with process control and yield management solutions. The stock has increased its total revenue by 10.4% in the past five years, causing a 164% rise in the share price.

The stock closed at a price of $173.01 on Jan. 10 with a market capitalization of $27.3 billion, a price-earnings ratio of 24.16 and a price-sales ratio of 5.6.

The Peter Lynch chart shows that the share price might be not at its cheapest.

As of January, six analysts out of a total of 14 recommend buying this stock and seven recommend a hold rating. The average target price of $189.87 implies a nearly 10% upside.

Disclosure: I have no positions in any securities mentioned in this article.

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About the author:

Alberto Abaterusso
If somebody asks what being a value investor means, Alberto Abaterusso would answer, “The value investor is not just the possessor of the security that represents the company, but he is the owner of that company. As an owner of the company the value investor is actively involved in the dynamics of that company and his first concern is how to have sales progressively growing. Also, the value investor is probably one of the most demanding persons in the world concerning sales.”

Abaterusso is a freelance writer based in The Netherlands. He primarily writes about gold, silver and precious metals mining stocks. His articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. Alberto holds an MBA from Università degli Studi di Bari (Italy), Aldo Moro.

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