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Alberto Abaterusso
Alberto Abaterusso
Articles (2203) 

3 Fast-Growing Small Caps

Analysts expect a significant improvement in the bottom line of these companies

April 07, 2020 | About:

Economic forecasters think that consumer spending (the largest factor to the U.S. Gross Domestic Product) will still rise over the next quarters, hitting $13.72 trillion around the end of the current year. The growth will represent a 2.3% advancement from $13.41 trillion reported for the last quarter of 2019.

In such an environment, stocks with fast-growing EPS, which is a common characteristic amid companies with a market capitalization of $300 million to $2 billion, are well-positioned players. Therefore, looking for growth opportunities, I have searched the market for potential investments in small-caps.

In addition to receiving high earnings predictions from analysts, these companies have also grown their trailing 12-month earnings per share without non-recurring items and received positive ratings from Wall Street sell-side analysts.

Ensign Group Inc

The first company to consider is Ensign Group Inc (NASDAQ:ENSG), a San Juan Capistrano, California-based provider of skilled nursing and senior living facilities in several states of the U.S. It has a market capitalization of about $1.93 billion.

Ensign Group Inc saw its trailing 12-month EPS without NRI grow 50.5% to $1.64 per share in full-year 2019, up from $1.09 in full-year 2018.

Wall Street sell-side analysts forecast that the EPS of the company will increase by 13.4% this year and 15% on average every year in the next five years. The S&P 500, which is a benchmark for the U.S. market, is expected to post a 5% decline this year and a 6% rise per year over the next five years.

Analysts issued an overweight recommendation rating for this stock and have set an average target price of $53 per share.

The current share price ($36.08 as of April 6) is not expensive, as it trades near the Peter Lynch earnings line.

Currently, Ensign Group Inc pays a quarterly cash dividend of 5 cents per common share, producing a dividend yield of 0.54% as of April 6.

GuruFocus assigned the company a moderate financial strength rating of 4 out of 10 and a good profitability rating of 7 out of 10.

Core-Mark Holding Co

The second company to consider is Core-Mark Holding Co Inc (NASDAQ:CORE), a food products distributor with a market capitalization of about $1.27 billion.

Core-Mark Holding Co Inc saw its trailing 12-month EPS without NRI growing 26.3% to $1.25 in full-year 2019, up from 99 cents in full fiscal 2018.

Wall Street sell-side analysts forecast that the EPS of Core-Mark Holding will increase by 4.7% this year and 4% on average every year in the next five years. The S&P 500, which is a benchmark for the U.S. market, is expected to post a 5% decline this year and a 6% rise per year over the next five years.

Analysts recommend an overweight rating for this stock and have set an average target price of $32.25 per share.

The share price ($28.13 at close on April 6) currently trades slightly above the Peter Lynch earnings line.

Currently, Core-Mark Holding Co Inc pays a quarterly cash dividend of 12 cents per common share, generating a 1.64% dividend yield as of April 6.

GuruFocus assigned the company a positive financial strength rating of 6 out of 10 and a high profitability rating of 8 out of 10.

The Meet Group Inc

The third company to consider is The Meet Group Inc (NASDAQ:MEET). The New Hope, Pennsylvania-based operator of a portfolio of mobile social entertainment applications for human connection worldwide has a market capitalization of $424.4 million.

The Meet Group Inc saw its trailing 12-month EPS without NRI growing by an outstanding 650% rate to 15 cents in full-year 2019, up from 2 cents in full-year 2018.

Wall Street sell-side analysts forecast that the company will increase its EPS by 34% this year and 28% on average every year over the next five years. The S&P 500, which is a benchmark for the U.S. market, is expected to post a 5% decline this year and a 6% rise per year over the next five years.

Analysts issued a hold recommendation rating for this stock and have established an average price target of $6.54 per share.

Currently, the share price ($5.97 as of April 6) trades above the Peter Lynch earnings line, suggesting that this stock is not cheap.

The Meet Group Inc doesn't pay dividends.

GuruFocus assigned a good rating of 7 out of 10 for the company’s financial strength and a positive profitability rating of 5 out of 10.

Disclosure: I have no positions in any securities 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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