The following companies have been upgrading their operating activities in recent years, significantly increasing the funds allocated to their acquisition of fixed assets. This could indicate the executives of these companies expect a higher demand for the goods and services they produce and supply, which would ideally bring in higher revenues.
Wall Street sell-side analysts also recommend these stocks, having produced positive ratings for them.
Bilibili
The first company that qualifies is Bilibili Inc. (BILI, Financial), a Shanghai-based provider of online entertainment services, such as video services, mobile games, art computer graphics-related comic and audio content.
Bilibili employed approximately $343 million in the purchase of property, plant and equipment, and intangible assets in full-year 2020, which marks a dramatic increase compared to nearly $97 million allocated in 2017.
Morningstar analysts estimate total sales will increase by 59.90% year over year to $2.92 billion this year and by 43.50% year over year to $4.19 billion in 2022. The annual net loss per share is projected to get worse in 2021 ($1.32, up 15.80% year over year), but to start improving again in 2022 (57 cents, down 56.80% year over year). Both trends will contribute to a further reduction in the net loss per share over the next five years at an annual average growth rate of 13.19%.
On Wall Street, the stock has a median recommendation rating of buy with an average price target of approximately $160 per share.
The stock traded at $105.05 per share at close on Tuesday for a market capitalization of $37.01 billion and a price-book ratio of 31.8 (versus the industry median of 4.18). The share price has risen by 336.62% over the past year.
IQVIA Holdings
IQVIA Holdings Inc. (IQV, Financial) is a Danbury, Connecticut-based supplier of advanced analytics, technology solutions,and clinical research services to pharmaceutical, biotechnology, device and diagnostic and consumer health operators in North America and internationally.
IQVIA allocated $616 million to the purchase of property, plant and equipment in full-year 2020, representing a more than a 1.5-fold increase from $369 million allocated in 2017.
Morningstar analysts estimate that on a year-over-year basis, the earnings per share will increase by 24.30% to $7.98 this year, by 15.50% to $9.22 in 2022 and by 15.92% on average every year over the next five years. Sales are expected to show increases of 12.70% for a total of $12.8 billion this year and of 8.10% for total $13.83 billion in 2022.
On Wall Street, the stock holds a median recommendation rating of buy with an average target price of $219.10 per share.
The stock traded at $190.79 per share at close on Tuesday for a market capitalization of $36.59 billion as a result of a 90.71% growth over the prior 12 months. The price-book ratio is 6.80 versus the industry median of 5.18.
Zscaler
The third company that makes the cut is Zscaler Inc. (ZS, Financial), a San Jose, California-based cloud security global operator.
Zscaler invested $43.07 million for the purchase of property, plant and equipment in fiscal 2020, which increased dramatically from total spending of $7.78 million in 2017.
Morningstar analysts estimate an earnings growth rate of 66.70% on higher sales of $637.41 million for full fiscal 2021 (up 47.8% year over year), chasing earnings growth of 52.50% on higher sales of $848.75 million in 2022 (up 33.20% year over year).
On Wall Street, the stock holds a median recommendation rating of overweight for an average target price of $236.17 per share.
The stock traded at $165.79 per share at close on Tuesday for a market capitalization of $22.54 billion following an increase of 167.452% over the past 52 weeks. The price-book ratio is 44.80 versus the industry median of 3.73.
Disclosure: I have no positions in any securities mentioned.
Read more here:
- 3 Stocks for GARP Investors
- A Trio of Defensive Stocks for the Value Investor
- 3 High Ebitda Margin Ratio Stock Picks
Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.
