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Alberto Abaterusso
Alberto Abaterusso
Articles (2616) 

3 Stocks for Growth-Oriented Investors

While growing their trailing 12-month net earnings, these stocks still look cheap

February 08, 2021 | About:

Growth-focused investors could be interested in the following stocks, as they have price-earnings ratios standing below 20 while their trailing 12-month earnings per share have increased over the past year.

Standard Motor Products Inc

The first company that makes the cut is Standard Motor Products Inc (NYSE:SMP), a Long Island, New York-based manufacturer and supplier of spare parts for motor vehicles.

The trailing 12-month net earnings from ongoing operations increased by 3% year over year to $3.09 per diluted share as of the September 2020 quarter, up from $3 per diluted share as of the prior-year quarter.

The price-earnings ratio is 16.51 (versus the industry median of 25.13) as of Feb. 5.

As a result of a nearly 16% decline over the past year, the stock was trading at $43.25 per share at close on Friday for a market capitalization of $970.79 and a 52-week range of $33.94 to $55.29.

Currently, Standard Motor Products Inc pays a 25 cents per common share quarterly dividend with the next payment scheduled to be issued on March 1, producing a 2.31% forward dividend yield as of Feb. 5.

GuruFocus assigned a score of 7 out of 10 to the company's financial strength and 8 out of 10 to its profitability.

On Wall Street, the stock has a median recommendation rating of buy and an average target price of $52.33 per share.

Acme United Corp

The second company that possesses the criteria is Acme United Corp (ACU), a Fairfield, Connecticut-based supplier of cutting, first aid, measuring, safety and sharpening products to various users, including households, offices and schools in North America. The company serves several industrial markets as well.

The trailing 12-month net earnings increased 36.5% year over year to $2.02 per diluted share as of the September 2020 quarter, up from $1.48 per diluted share in the prior-year quarter.

The price-earnings ratio is 16.16 (versus the industry median of 19.98) as of Feb. 5.

Following a 37.2% increase over the past year, the stock traded at $32.65 per share at close on Friday for a market capitalization of $109.02 million and a 52-week range of $17.10 to $35.49.

Currently, Acme United Corp pays a quarterly cash dividend of 13 cents per common share, with the last payment made on Jan. 29, generating a trailing 12-month dividend yield of 1.5% as of Feb. 5.

GuruFocus assigned a score of 5 out of 10 to the company's financial strength and 8 out of 10 to its profitability.

On Wall Street, the stock has one median recommendation rating of buy with a target price of $35.50 per share.

Forestar Group Inc

The third company that makes the cut is Forestar Group Inc (NYSE:FOR), an Arlington, Texas-based real estate operator that acquires, develops and sells residential properties to homebuilders.

The trailing 12-month net earnings were $1.37 per diluted share as of the December 2020 quarter, representing a significant year over year increase of 30.5% from $1.05 per diluted share as of the same quarter in 2019.

The price-earnings ratio is 16.77 (versus the industry median of 14.24) as of Feb. 5.

Thanks to a 14.39% increase over the past year, the stock was trading at $22.98 per share at close on Friday for a market capitalization of $1.10 billion and a 52-week range of $9.43 to $23.97.

Forestar Group Inc does not pay dividends.

GuruFocus assigned a score of 4 out of 10 to the company's financial strength and 6 out of 10 to its profitability.

On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $27.50 per share.

Disclosure: I have no positions in any securities mentioned in this article.

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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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