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Alberto Abaterusso
Alberto Abaterusso
Articles (2474) 

3 Stocks Growing Capex Fast

They have increased their allocations to the acquisition of fixed assets enormously

November 17, 2020 | About:

The following companies have employed massive funds on the acquisition of property, plant and equipment over recent years with the aim of upgrading their operating activities. This may be a sign that these companies expect a higher demand for the goods and services they produce and supply, which would ideally correspond to higher revenues.

Thus, the stocks below could represent good opportunities as of today. Wall Street sell-side analysts have also recommended these stocks as they have issued positive ratings.

Collegium Pharmaceutical Inc

The first company to consider is Collegium Pharmaceutical Inc (NASDAQ:COLL), a Stoughton, Massachusetts-based specialty pharmaceutical developer of various painkillers.

The company increased its allocations to the acquisition of fixed assets tremendously over the past five years to $6.44 million in full year 2019 compared to only $8,000 in full year 2014.

Morningstar analysts forecast that the company's revenue will grow by 5.1% this year and by 10.4% in 2021.

On Wall Street, the stock holds an overweight recommendation rating with an average target price of $28.29 per share.

The stock traded at around $19.02 per share at close on Monday for a market capitalization of $657.76 million. The stock price has increased by only 0.85% compared to one year ago.

The price-earnings ratio is 38.82 versus the industry median of 24.14, the price-book ratio is 3.86 versus the industry median of 2.28 and the price-sales ratio is 2.15 versus the industry median of 2.71.

AXT Inc

The second company to consider is AXT Inc (NASDAQ:AXTI), a Fremont, California-based developer of semiconductor substrates for several uses, including data center connectivity, terrestrial solar cells, direct broadcast television, satellite communications, photovoltaic and 5G. The company sells its product in the U.S. and internationally through its own sales network as well as independent sales representatives and distributors.

The company spent $21.8 million for the acquisition of fixed assets in full year 2019, up enormously from $4.15 million in full year 2015, hitting a peak of $40.54 million in full year 2018.

Morningstar analysts predict that the company's revenue will grow by 12.7% this year and by 14.6% in 2021.

On Wall Street, the stock holds an overweight recommendation rating with an average target price of $8.53 per share.

The stock traded at around $7.84 per share at close on Monday for a market capitalization of $323.79 million as a result of a 155.4% upside over the past year.

The price-book ratio is 1.68 versus the industry median of 2.28 and the price-sales ratio is 3.64 versus the industry median of 2.27.

Smith Micro Software Inc

The third company investors should consider is Smith Micro Software Inc (NASDAQ:SMSI), a Pittsburgh, Pennsylvania-based developer and seller of software applications to mobile phone manufacturers and to wireless and cable service providers operating worldwide.

The company invested $1.7 million for the purchase of fixed assets in full year 2019, marking a tremendous growth when compared to $216,000 invested in full year 2014.

Morningstar analysts predict that the company's revenue will grow by 17.4% this year and by 7.2% in 2021.

On Wall Street, the stock holds a buy recommendation rating with a target price of $7.25 per share.

The stock traded at around $5.08 per share at close on Monday for a market capitalization of $209.78 million as a result of the 12.64% increase that happened over the past year.

The price-earnings ratio is 29.2 versus the industry median of 30.66, the price-book ratio is 3.64 versus the industry median of 3.46 and the price-sales ratio is 4.23 versus the industry median of 2.7.

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 how to pick potential value stocks. Gold, silver and precious metals mining industries is also my cup of tea. 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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