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Alberto Abaterusso
Alberto Abaterusso
Articles (2203) 

3 Fast-Growing CapEx Stocks

Growth may follow after five years of massive allocation of funds to projects and investments

February 24, 2020 | About:

Investors may be interested in the following stocks, as these represent companies that have increased total funds allocated to capital expenditures over the past five years.

Funds employed as capital expenditures (aka CapEx) are intended for business growth plans and are usually budgeted for new projects or investments.

Rising CapEx can often be a precursor of higher sales and earnings because as long as the financial resources are efficiently and effectively utilized, and as long as there is sufficent demand for the company's products, more capital expenditures are likely to result in hihger sales. Higher sales will lead to higher earnings, moving the share prices up in  turn.

Matson

Matson Inc (NYSE:MATX) is a Honolulu-based ocean transportation and logistics services company which mainly operates in Hawaii, Alaska, Guam and other islands of Micronesia.

Over the past five years, the company has grown its trailing 12-month capital spending by nearly 80% to $401.2 million as of the most recent full fiscal year.

Wall Street analysts forecast Matson’s net earnings will increase by 11.4% in 2020 and 15% per year over the following five years.

As of February, Wall Street analysts have assigned this stock three strong buys, two holds and only one sell recommendation rating. The average target price is $42.33 versus Friday’s closing share price of $37.92.

The share price was flat over the past year. Now it is below the 200-, 100- and 50-day simple moving average lines.

The stock has a market capitalization of $1.63 billion, a price-earnings ratio of 18.59 compared to the industry median of 14.58, a price-book ratio of 2.04 versus the industry median of 1.1 and a price-sales ratio of 0.73 versus the industry median of 0.74.

Albemarle

Albemarle Corporation (NYSE:ALB) is a Charlotte, North Carolina-based developer, manufacturer and marketer of engineered specialty chemicals worldwide.

The company has grown its trailing 12-month capital spending by an impressive 670% in the past five years to nearly $852 million as of the most recent full fiscal year.

Wall Street analysts estimate that Albemarle will increase net earnings per share at an average of 11.1% per year in the next five years.

As of February, the stock has two strong buys, six buys and 12 hold recommendation ratings from Wall Street. The average target price is $90.83 compared to Friday’s closing share price of $92.43.

The share price rose only 1% in the past year, but it is still substantially above the 200-, 100- and 50-day simple moving average lines.

The stock has a market capitalization of $9.8 billion, a price-earnings ratio of 18.41 versus the industry median of 17.42, a price-book ratio of 2.5 compared to the industry median of 1.41 and a price-sales ratio of 2.74 versus the industry median of 0.98.

ANI Pharmaceuticals

ANI Pharmaceuticals Inc (NASDAQ:ANIP) is a Baudette, Minnesota-based developer, manufacturer and marketer of prescription pharmaceuticals in North America.

The company has increased its trailing 12-month capital spending by 105% on average every year over the past five years to $11 million as of the most recent full fiscal year.

Wall Street analysts expect net earnings to grow by 6% in 2020 and by 2.2% every year over the following five years.

As of February, the stock has two strong buys and one overweight recommendation rating from Wall Street. The average price target is $75 per share compared to Friday’s closing price of $61.44 per share.

The share price has risen only 1% in the past year, but it is still below the 200-, 100- and 50-day simple moving average lines.

The stock has a market capitalization of $742.87 million, a price-earnings ratio of 45.51 versus the industry median of 21.56, a price-book ratio of 3.48 compared to the industry median of 2.01 and a price-sales ratio of 3.41 versus the industry median of 2.47.

Disclosure: I have no positions in any security mentioned.

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About the author:

Alberto Abaterusso
I am a contributor at GuruFocus. I primarily write about gold, silver and precious metals mining industries. My articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. I hold a Master's Degree in Business Administration from Università degli Studi di Bari (Italy), Aldo Moro. I am based in The Netherlands.

You can follow me on Twitter at https://twitter.com/AAbaterusso

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