Growing sales is an essential catalyst to higher share prices. The S&P 500’s total sales grew by about 4% over the past five years through Sept. 30, 2019, pushing its share price up nearly 64% over the same period.
The following stocks outperformed the benchmark for the U.S. market in terms of higher sales growth, which allowed them to post large share price returns in the range of 45% to 190% over the past five years through Dec. 31, 2019.
Wall Street sell-side analysts have also issued positive recommendation ratings for these companies.
LVMH Moet Hennessy Louis Vuitton SE
The first company to consider is LVMH Moet Hennessy Louis Vuitton SE (LVMUY, Financial).
The French luxury goods company has grown its total revenue by 10.4% on average every year over the past five years. On the tailwind of this, the share price went up nearly 190% through Dec. 31, 2019.
The stock was trading at a price of $74.46 per share at close on March 27 for a market capitalization of $187.5 billion. The stock had a price-earnings ratio of 24.01 and a price-book ratio of 4.7.
These ratios, along with the Peter Lynch chart below, indicate that the current share price is still not cheap, even though it was down 10% over the last month of trading.
As of March, eighteen Wall Street sell-side analysts recommend a buy rating, three analysts recommend an overweight rating, four analysts recommend a hold rating, one analyst suggests an underweight rating and one analyst suggests selling shares of this stock. The average target price is $93.52 per share.
GuruFocus assigned the company a moderate financial strength rating of 5 out of 10 and a profitability rating of 9 out of 10.
Verisk Analytics
The second company to consider is Verisk Analytics Inc (VRSK, Financial).
The New Jersey provider of data analytics solutions in the U.S. and internationally increased its total revenue by 12.1% on average every year over the past five years, causing a 115% rise in the share price over the same period through Dec. 31, 2019.
The stock was trading around a price of $137.77 per share at close on March 27 for a market capitalization of $22.47 billion. The stock had a price-earnings ratio of 50.84 and a price-book ratio of 10.13.
The below Peter Lynch chart illustrates that the share price currently trades above the earnings line. Thus, the stock is still not so cheap, although its share price fell by 11% over the past month.
As of March, seven Wall Street sell-side analysts recommend a buy rating, one analyst recommends an overweight rating, eight analysts suggest a hold rating and only one analyst suggests selling the stock. The average target price is $167.27 per share.
GuruFocus assigned the company a moderate financial strength rating of 5 out of 10 and a profitability rating of 9 out of 10.
Formula Systems (1985)
The third company to consider is Formula Systems (1985) Ltd (FORTY, Financial).
The Israeli software and support services company has grown its total revenue by 20.1% on average every year over the past five years. As a result, the share price rose by nearly 45% over the past five years through Dec. 31, 2019.
The stock was trading at a price of $55.28 per share at close on March 27 for a market capitalization of around $832.07 million. The stock had a price-earnings ratio of 23.18 and a price-book ratio of 2.01.
These ratios, together with the below Peter Lynch chart, suggest that the share price is still not at its cheapest, despite a 43% tumble in the last month.
One sell-side analyst on Wall Street recommends holding shares of this stock.
GuruFocus assigned the company a moderate financial strength rating of 5 out of 10 and a high profitability rating of 8 out of 10.
Disclosure: I have no positions in any securities mentioned in this article.
Read more here:
- These Stocks Are Potentially Undervalued
- A Trio of High Earnings Yield Stocks
- 3 Fast-Growing Small Caps
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