The three companies listed below have significantly increased their allocations to the acquisition of property, plant and equipment over recent years with the aim of upgrading their operating activities. This could indicate that managers expect to see a higher demand for the goods and services their companies produce and supply, which would ideally correspond to higher revenues.
Wall Street sell-side analysts also recommend these stocks, since they have issued positive ratings for each of them.
Roku Inc
The first company investors may want to consider is Roku Inc (ROKU, Financial), a Los Gatos, California-based TV streaming platform operator.
Roku used $82.38 million for the purchase of property, plant and equipment in full-year 2020, increasing enormously from the amount of $5 million allocated in 2015.
Morningstar analysts predict that the company's bottom line will improve substantially over the two years ahead, switching from an expected net loss of 24 cents per share in 2021 to a net profit of 52 cents per share in 2022. Total revenue is also expected to improve 43.3% year over year to $2.55 billion in 2021 and 37.7% year over year to $3.51 billion in 2022.
On Wall Street, the stock holds an overweight median recommendation rating with an average price target of $483.95 per share.
The stock traded at $420.31 per share at close on Monday for a market capitalization of $53.98 billion. The share price has risen by 286.95% over the past year. The price-book ratio is 40.32.
Carvana Co
The second company which investors may want to consider is Carvana Co (CVNA, Financial), a Tempe, Arizona-based operator of an e-commerce platform for buying and selling used vehicles in the U.S.
Carvana allocated $359.80 million to the purchase of property, plant and equipment in full year 2020, which marked a tremendous growth from $3.77 million in full year 2014.
Morningstar analysts forecast that the company's net loss is expected to be lower this year at $1.71 per share, which is down 27.2% from 2020, as a result of a 53% year over year increase in total revenue to $8.55 billion.
On Wall Street, the stock holds an overweight median recommendation rating with an average target price of $310.62 per share.
The stock traded at $311.92 per share at close on Monday for a market capitalization of $53.73 billion following a 289.66% rise over the prior 12 months. The price-book ratio is 58.90.
Sun Hung Kai Properties Ltd
The third company investors may want to consider is Sun Hung Kai Properties Ltd (SUHJY, Financial), which is a Hong Kong-based real estate company focusing on the development of properties to sell or rent in Hong Kong, China and overseas.
Sun Hung Kai Properties increased its allocations to the purchase of property, plant and equipment by a yearly average of 14% over the past five years through full fiscal 2020. The company invested $373 million in 2020 compared to $218.50 million in 2014.
Morningstar analysts predict that the EPS will increase by 2.4% on average every year over the next five years, while total revenue is expected to be lower this year (down 0.34% year over year to $11.67 billion) before rising again in 2021 (up 16.9% to $13.59 billion) and in 2022 (up 0.44% to $13.65 billion).
On Wall Street, the stock holds a buy median recommendation rating for an average target price of $17.86 per share.
The stock traded at $15.65 per share at close on Monday for a market capitalization of $45.35 billion as a result of an increase of 11.75% over the past year. The price-book ratio is 0.62.
Disclosure: I have no positions in any securities mentioned.
Read more here:
- 3 Small Caps for the Growth-Oriented Investor
- A Trio of Stocks With High Ebitda Margin Ratios
- A Trio of Stocks With a Record of Operating Income Margin Growth
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