The following companies have been upgrading their operating activities in recent years, significantly increasing the funds allocated to their acquisition of property, plant and equipment. This could be a signal that the executives of these companies expect a higher demand for the goods and services they produce and supply, which would ideally correspond to higher revenues.
Wall Street sell-side analysts also recommend these stocks, having issued positive ratings for them.
Inseego Corp
The first company that qualifies is Inseego Corp (INSG, Financial), a San Diego, California-based designer and developer of mobile, Internet of Things and cloud solutions for large enterprise verticals for service providers worldwide.
Inseego Corp used more than $6.5 million for the purchase of property, plant and equipment assets in full-year 2019, which marks a dramatic increase compared to the $2 million allocated in 2015.
Morningstar analysts estimate earnings growth rates of 71.40% on higher sales of $311.58 million for 2020 (up 42% year over year) and of 383.30% on higher sales of $364.61 million for 2021 (up 17% year over year).
On Wall Street, the stock holds an overweight median recommendation rating with an average price target of $13.75 per share.
The stock traded at $18.36 per share at close on Friday for a market capitalization of $1.82 billion. The share price has risen by 161.2% over the past year.
Cohu Inc
The second company that holds the criteria is Cohu Inc (COHU, Financial), a Poway, California-based provider of semiconductor equipment and materials to semiconductor, electronics manufacturers and test subcontractors in the U.S. and internationally.
Cohu allocated $18 million to the purchase of property, plant and equipment in full-year 2019, representing a dramatic increase from $1.46 million allocated in the full year 2014.
Morningstar analysts estimate the earnings per share will increase up to $1.06 for full-year 2020 (from $0.09 in 2019) and up to $2.57 (a gain of 29.30% year over year) for the full year of 2021. Sales are expected to show increases of $631.43 million (up 8.2% year over year) for full-year 2020 and of $816.14 million (up 29.30% year over year) for full-year 2021.
On Wall Street, the stock holds a median recommendation rating of buy with an average target price of $51 per share.
The stock traded at $40.68 per share at close on Friday for a market capitalization of $1.71 billion as a result of an 80% growth over the prior 12 months. The price-book ratio is 3.60.
8x8 Inc
The third company that makes the cut is 8x8 Inc (EGHT, Financial), a Campbell, California-based provider of various telecommunication software solutions for businesses, government agencies and other public organizations worldwide.
8x8 invested $35.83 million for the purchase of property, plant and equipment in full fiscal 2020, which marked an impressive increase from total spending of $5.83 million in full fiscal 2015.
Morningstar analysts estimate an earnings growth rate of 76.30% on higher sales of $526.30 million for full fiscal 2021 (up 17.90% year over year), followed by earnings growth of 142.90% on higher sales of $611.99 million for full fiscal 2022 (up 16.30% year over year).
On Wall Street, the stock holds a median recommendation rating of overweight for an average target price of $39.28 per share.
The stock traded at $35.25 per share at close on Friday for a market capitalization of $3.78 billion following an increase of 85.42% over the past 52 weeks. The price-book ratio is 22.66.
Disclosure: I have no positions in any securities mentioned.
Read more here:
- 3 Fast-Growing Small Caps to Consider
- 3 Stocks Growing Earnings Faster Than Sales
- 3 Stocks With Low 12-Month and Forward PEG Ratios
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