The three companies listed below have been upgrading their operating activities in recent years, substantially increasing the financial resources used for their purchase of fixed assets such as property, plant and equipment. This could mean that the managers of these companies expect a higher demand for the goods and services they produce, which would ideally correspond to higher revenues.
Wall Street sell-side analysts are also optimistic about these stocks, as they have issued positive ratings for each of them.
Global Blood Therapeutics Inc
The first company that makes the cut is Global Blood Therapeutics Inc (GBT, Financial), a South San Francisco, California-based biotechnology developer of therapies for the treatment of sickle cell disease.
Global Blood Therapeutics Inc allocated $8.75 million to the purchase of property, plant and equipment in full-year 2020 compared to $990,000 in 2015. On average, the spending increased by 50% per annum over the past five years.
Morningstar analysts estimate that on a year over year basis, total sales will rise by 64% to $203.05 million this year, by 87.2% to $380.07 million in 2022, by 60.2% to $608.75 million in 2023 and by 42.7% to $868.63 million in full fiscal year 2024.
The net loss per share of $4.04 that the company posted for full-year 2020 is expected to worsen this year, increasing to $4.38 per share. The net loss should improve over the following three years. Analysts estimate a net loss per share of $2.35 in 2022, another net loss of $0.10 in 2023 and a net profit of $2.49 in 2024.
On Wall Street, the stock has a median recommendation rating of overweight with an average price target of $72.47 per share.
The stock traded at $30 per share at close on Wednesday for a market capitalization of $1.87 billion. The share price has fallen by almost 44% over the past year, determining a price-book ratio of 5.92 versus the industry median of 4.06.
Eagle Bulk Shipping Inc
The second company that makes the cut is Eagle Bulk Shipping Inc (EGLE, Financial), an owner, charter and operator of a 45-vessel fleet for the global transportation of a range of dry bulk cargoes, including mineral products, building materials and some commodities. The company serves several businesses including miners and producers as well as traders and end-users.
In 2020, Eagle Bulk Shipping Inc used funds of $32.66 million for the purchase of property, plant and equipment, compared to $1.75 million used in 2015. The spending has grown almost 77.6% on average per annum over the past five years.
Morningstar analysts estimate that on a year-over-year basis, total revenue will jump by 60% to $440.2 million this year and decline by 6.3% to $412.2 million in 2022.
Analysts also expect that the EPS will grow by 495% to $13.43 this year and drop by 24.7% to $10.11 in 2022. Over the next five years, the EPS will increase by an average growth rate of 69.67% per annum, according to analysts.
On Wall Street, the stock has a median recommendation rating of buy with an average price target of $59.50 per share.
The stock price traded at $48.86 at close on Wednesday for a market capitalization of $668.28 million following a 178.11% increase over that past year. The price-book ratio is 1.23 versus the industry median of 1.51.
AVEO Pharmaceuticals Inc
The third company that makes the cut is AVEO Pharmaceuticals Inc (AVEO, Financial). Based in Boston, Massachusetts, the company is a biotechnology developer of cancer medicines targeting various forms of cancer including renal cell carcinoma, squamous cell carcinoma of the head and neck, pancreatic cancer and acute myeloid leukemia.
AVEO Pharmaceuticals Inc allocated approximately $363,000 to the purchase of property, plant and equipment in 2020, growing nearly 52-fold from $7,000 spent in 2016.
Morningstar analysts estimate that total sales will gradually improve over the following years as they are expected to be $44.23 million in 2021, $93.78 million in 2022, $140.10 million in 2023 and $191.07 million in 2024.
The bottom line is also expected to improve, switching from a net loss of $1.64 per share in 2021 to a net loss of $0.68 per share in 2022 before entering positive territory with a net profit per share of $0.43 in 2023 and $1.49 in 2024.
On Wall Street, the stock holds a median recommendation rating of buy with an average target price of $20 per share.
The stock was trading at $6.21 per share at close on Wednesday for a market capitalization of $216.73 million thanks to a 9.5% increase that took place over the past 12 months. The price-book ratio is 3.64 versus the industry median of 4.06.
Disclosure: I have no positions in any securities mentioned.
