As of March 10, there are only 24 stocks that make it onto the GuruFocus Fast Growers Screener. In order to make this list, stocks must meet the following criteria:
- A five-year revenue per share growth rate of at least 20%.
- A 10-year revenue per share growth rate of at least 15%.
- A five-year Ebitda per share growth rate between 20% and 35%.
- A 10-year Ebitda per share growth rate of at least 20%.
This screener can help identify opportunities in the stocks of companies that are gaining stellar momentum from growth. However, one common issue with these stocks is that they are often priced for success with valuations that already take years of future growth into consideration. It can thus be difficult for cautious investors to find a justifiable entry price, as we do not yet know for sure if these companies will meet expectations.
One way to help identify which of these fast growers could still be good buys despite the prices is to look at whether investing gurus have been buying or selling the stock recently. With this in mind, below are five popular fast growers that gurus were buying in the most recent quarter, which ended on Dec. 31.
Nvidia
Nvidia Corp. (NVDA, Financial) is a Santa Clara, California-based technology company that designs graphics processing units (for video games, marketing, etc.) and system on a chip units (for mobile computing, automotive, etc.). The company's past growth has mostly come from its rise to leadership in the gaming and data center markets. Going forward, the virtual reality and artificial intelligence segments are expected to drive growth as well.
Nvidia has a five-year revenue per share growth rate of 23%, a 10-year revenue per share growth rate of 16%, a five-year Ebitda per share growth rate of 33.10% and a 10-year Ebitda per share growth rate of 26.50%.
The biggest guru shareholder of the stock is Baillie Gifford (Trades, Portfolio) with 0.76% of shares outstanding, followed by Spiros Segalas (Trades, Portfolio) with 0.48% and Primecap Management with 0.33%.
In the most recent quarter, 10 gurus bought shares of the stock while eight sold shares. The ratio of buying to selling was higher than that in terms of volume, as shown in the chart below.
On March 10, shares of the stock traded around $498.63 for a market cap of $309.21 billion and a price-earnings ratio of 72.4. The financial strength rating is 7 out of 10 and the profitability rating is 9 out of 10. The GuruFocus Value chart rates the stock as modestly overvalued.
Five Below
Five Below Inc. (FIVE, Financial) is an American discount specialty chain store headquartered in Philadelphia. It sells a wide variety of products that are mostly at or under the $5 mark, with a smaller assortment in the $6 to $10 range, and is primarily marketed towards teenagers, children and young adults. The company operates around 950 stores in 38 U.S. states, which it believes still leaves plenty of room for expansion.
Five Below has a five-year revenue per share growth rate of 21.80%, a 10-year revenue per share growth rate of 26.80%, a five-year Ebitda per share growth rate of 23.70% and a 10-year Ebitda per share growth rate of 34.40%.
The most notable guru shareholder of the stock is Steven Cohen (Trades, Portfolio) with 0.20% of shares outstanding, followed by Louis Moore Bacon (Trades, Portfolio) with 0.14% and Lee Ainslie (Trades, Portfolio) with 0.03%.
In the most recent quarter, four gurus bought shares of the stock while four sold shares. The ratio of buying to selling was higher than that in terms of volume, as shown in the chart below.
On March 10, shares of the stock traded around $183.38 for a market cap of $10.25 billion and a price-earnings ratio of 94.04. The financial strength rating is 5 out of 10 and the profitability rating is 9 out of 10. The GF Value chart rates the stock as modestly overvalued.
Alibaba Group Holding
Alibaba Group Holding Ltd. (BABA, Financial) is a Chinese multinational conglomerate with holdings in e-commerce, retail, internet and technology assets, among many others. By volume, Alibaba is the largest e-commerce company in the world, with millions of merchants and hundreds of millions of users. It is expected to continue its trend of strong growth along with the growth of the Chinese economy and expanding access to the internet and technology.
Alibaba has a five-year revenue per share growth rate of 44.60%, a 10-year revenue per share growth rate of 64.40%, a five-year Ebitda per share growth rate of 30.10 % and a 10-year Ebitda per share growth rate of 71.80%.
The top guru shareholder of the stock is Baillie Gifford with 0.92% of shares outstanding, followed by Ken Fisher (Trades, Portfolio) with 0.52% and Frank Sands (Trades, Portfolio) with 0.39%.
In the most recent quarter, 23 gurus bought shares of the stock while 14 sold shares. The ratio of buying to selling was lower than that in terms of volume, as shown in the chart below.
On March 10, shares of the stock traded around $234.52 for a market cap of $634.96 billion and a price-earnings ratio of 27.35. The financial strength rating is 7 out of 10 and the profitability rating is 9 out of 10. The GF Value chart rates the stock as significantly undervalued.
Netflix
Founded in 1997 as a DVD mail rental service, Netflix Inc. (NFLX, Financial) has grown to a media services and production giant. Subscribers can stream the company's library of content to various devices. Netflix typically acquires new content through licensing or in-house production, and availability can vary by popularity, cost of licensing, seasonality, etc. Future growth is expected to be driven by subscriber growth (especially in new international markets) as well as strategic subscription price increases.
Netflix has a five-year revenue per share growth rate of 29.30%, a 10-year revenue per share growth rate of 25%, a five-year Ebitda per share growth rate of 30.70% and a 10-year Ebitda per share growth rate of 32.40%.
The biggest guru shareholder of the stock is Sands with 2.18% of shares outstanding, followed by Baillie Gifford with 1.83% and Steve Mandel (Trades, Portfolio) with 0.55%.
In the most recent quarter, 16 gurus bought shares of the stock while eight sold shares. The ratio of buying to selling was higher than that in terms of volume, as shown in the chart below.
On March 10, shares of the stock traded around $504.54 for a market cap of $223.46 billion and a price-earnings ratio of 82.83. The financial strength rating is 5 out of 10 and the profitability rating is 9 out of 10. The GF Value chart rates the stock as modestly undervalued.
Ulta Beauty
Ulta Beauty Inc. (ULTA, Financial) is a beauty salon retailer headquartered in Illinois. It offers both prestige and mass-market cosmetics, makeup, fragrances, hair and skin care products, among others, through its brick-and-mortar stores and online. Ulta's outsized growth has been achieved through a combination of a one-stop shop for a variety of beauty needs, exclusive partnerships, a rewarding loyalty program and investments in new technology, all of which should help the company further grow its market share.
Ulta has a five-year revenue per share growth rate of 21%, a 10-year revenue per share growth rate of 21%, a five-year Ebitda per share growth rate of 20.30% and a 10-year Ebitda per share growth rate of 25.30%.
The most notable guru shareholder of the stock is Pioneer Investments (Trades, Portfolio) with 1.43% of shares outstanding, followed by the Smead Value Fund (Trades, Portfolio) with 0.08% and Jim Simons (Trades, Portfolio)' Renaissance Technologies with 0.04%.
In the most recent quarter, eight gurus bought shares of the stock while none sold shares. The ratio of buying to selling was also higher than in previous quarters in terms of volume.
On March 10, shares of the stock traded around $341.98 for a market cap of $19.21 billion and a price-earnings ratio of 86.66. The financial strength rating is 6 out of 10 and the profitability rating is 9 out of 10. The GF Value chart rates the stock as significantly overvalued.
Disclosure: Author owns no shares in any of the stocks mentioned. The mention of stocks in this article does not at any point constitute an investment recommendation. Investors should always conduct their own careful research and/or consult registered investment advisors before taking action in the stock market.
Read more here:
- 3 New 'Magic Formula' Stocks to Consider
- American Airlines: Issues Run Deeper Than Bankruptcy Risk
- The 5 Most-Sold Guru Stocks of the 4th Quarter
Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.
