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3 Stock Picks for a Long-Term Approach

These companies have been steadily growing revenue and Ebitda

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Nov 02, 2021
Summary
  • XPEL Inc, MYR Group Inc and EPAM Systems Inc have highly predictable businesses
  • They have grown revenue and Ebitda steadily over the past years determining strong share price performances
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The GuruFocus business predictability rating ranks companies on a five-star scale, defining the more predictable companies as businesses whose revenue per share and Ebitda per share have been growing steadily and who have produced a strong long-term performance of their stock prices.

Thus, those following a long-term investment strategy could find attractive investing opportunities by screening the market for stocks that have a high GuruFocus business predictability rating, in my opinion. The following three stocks all trade with high business predictability ratings and are recommended by Wall Street.

XPEL Inc

The first company that matches the criteria is XPEL Inc (

XPEL, Financial), a San Antonio, Texas-based manufacturer, distributor and installer of aftermarket automotive products in North America and internationally.

XPEL's business has a four-and-a-half star rating for its predictability. The company saw its revenue per share increase by 43.60% and its Ebitda per share increase by 40.80% on average every year over the past 10 years.

The share price ($79.42 at close on Monday) is performing very well as shown by the chart below, determining a market capitalization of $2.2 billion.

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GuruFocus assigned a financial strength rating of 7 out of 10 and a profitability rating of 9 out of 10 to the company.

The price-earnings ratio is 73.54 versus the industry median of 16.33, the enterprise-value-to-Ebitda ratio is 55.16 versus the industry median of 9.25 and the price-sales ratio is 10.19 versus the industry median of 0.83.

Wall Street sell-side analysts recommend a median rating of buy for the stock with an average target price of $110 per share.

MYR Group Inc

The second company that meets the criteria is MYR Group Inc (

MYRG, Financial), a Henderson, Colorado-based provider of electrical construction services in North America.

MYR Group Inc's business has a four-star business predictability rank. The company saw its revenue per share increase by 16% and its Ebitda per share increase by 11% on average every year over the past 10 years.

The share price ($105.27 at close on Monday) has performed strongly over the years, rising to a market capitalization of $1.78 billion.

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GuruFocus assigned a financial strength rating of 7 out of 10 and a profitability rating of 8 out of 10 to the company.

The price-earnings ratio is 21.8 versus the industry median of 14.23, the enterprise-value-to-Ebitda ratio is 10.8 versus the industry median of 9.26 and the price-sales ratio is 0.73 versus the industry median of 0.83.

Wall Street sell-side analysts recommend a median rating of overweight for this stock and have established an average target price of about $117 per share.

EPAM Systems Inc

The third company that meets the criteria is EPAM Systems Inc (

EPAM, Financial), a Newtown, Pennsylvania-based provider of digital platform engineering and software development services to businesses worldwide.

EPAM Systems Inc's business has a three-star business predictability rank. The company saw its revenue per share increase by 19% and its Ebitda per share increase by 18.20% on average every year over the past 10 years.

The current share price ($659.65 at close on Monday) has increased over the past years to a market capitalization of $37.4 billion.

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GuruFocus assigned a financial strength rating of 8 out of 10 and a profitability rating of 9 out of 10 to the company.

The price-earnings ratio is 97.14 versus the industry median of 30.23, the enterprise-value-to-Ebitda ratio is 63.05 versus the industry median of 17.72 and the price-sales ratio is 12.76 versus the industry median of 3.79.

Wall Street sell-side analysts recommend a median rating of overweight for the stock with an average target price of $666.21 per share.

Disclosures

I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours. Click for the complete disclosure
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