The four companies listed below have been upgrading their operating activities in recent years, as shown by a substantial increase in the allocation of funds to the 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 that they produce, which would ideally correspond to higher revenues.
Wall Street sell-side analysts are also optimistic about these stocks, as they have recommended positive ratings for each of them.
Nvidia Corp
The first company that makes the cut is Nvidia Corp. (NVDA, Financial), a Santa Clara, California-based producer of graphics processing units and system on chip units for the consumer electronics, computer hardware, semiconductors and video game industries.
Nvidia Corp.'s purchases of property, plant and equipment have grown at an average annual rate of approximately 87.57% over the past five fiscal years, from $176 million for full fiscal year 2017 to $1.13 billion for full fiscal year 2021 (the company's fiscal year ends on Jan. 30).
Morningstar analysts estimate that total revenue will grow at an average annual rate of 20.78% over the next three fiscal years to reach $38.95 billion in fiscal 2024.
On Wall Street, the stock has a median recommendation rating of overweight with an average price target of $345.21 per share.
The stock traded at $219.44 per share at close on Thursday for a market capitalization of $548.60 billion. The share price is up almost 69% over the past year, yielding a price-book ratio of 23.07 versus the industry median of 2.83.
The high price-book ratio may suggest that the stock is not cheap. However, as of this writing, Nvidia's weighted average cost of capital (WACC) is 7.26%, while its return on invested capital (ROIC) is 51.98% (calculated using TTM financial statement data). This means that Nvidia is very good at creating value for shareholders.
WuXi Biologics
The second company that makes the cut is WuXi Biologics Inc. (WXIBF, Financial), a China-based provider of an open-access biologics technology platform for global organizations to discover, develop and manufacture test technologies, drugs and vaccines for international sale.
WuXi Biologics’ purchases of property, plant and equipment have grown at an average annual rate of approximately 98.04% over the past five years, from $61.98 million for the full year ended December 2016 to $921.32 million for the full year ended December 2020.
Morningstar analysts estimate total revenue will grow at an average rate of about 48.46% per year over the next three years to reach $3.29 billion by 2023.
On Wall Street, the stock has a median recommendation rating of buy with an average price target of 128.06 Chinese Yuan (about $20.13) per share.
The stock price traded at $9.58 at close on Thursday for a market capitalization of $41.34 billion following a 32.77% drop over that past year. The price-book ratio is 7.72 versus the industry median of 2.62.
The price-book ratio may suggest that the stock is not cheap. However, as of this writing, WuXi Biologics (Cayman)'s weighted average cost of capital (WACC) is 3.14%, while its return on invested capital (ROIC) is 14.16% (calculated using TTM financial statement data). This means that the company is very good at creating value for shareholders.
Apollo Global Management Inc.
The third company that makes the cut is Apollo Global Management Inc. (APO, Financial), a New York-based asset management firm serving individual and institutional investors, including endowment and sovereign wealth funds.
Apollo Global Management Inc.'s purchases of property, plant and equipment have grown at an average annual rate of approximately 81.42% over the past five years, from $6.36 million for the year ended December 2016 to $59.56 million for the year ended December 2020.
Morningstar analysts estimate that total revenue will grow at about 62.64% per year over the next three years, reaching about $7.46 billion by 2023.
On Wall Street, the stock has a median recommendation rating of overweight with an average price target of $86.64 per share.
The stock was trading at $66.23 per share at close on Thursday for a market capitalization of $37.81 billion thanks to a 44.17% increase that occurred over the past year. The price-book ratio is 7.77 versus the industry median of 0.93.
The price-book ratio may suggest that the stock is not cheap. However, as of this writing, Apollo Global Management Inc.'s weighted average cost of capital (WACC) is 9.9%, while Apollo Global Management Inc's return on invested capital (ROIC) is 12.76% (calculated using TTM financial statement data). This means that it is very good at creating value for shareholders.
Ganfeng Lithium Co Ltd
The fourth company that makes the cut is Ganfeng Lithium Co Ltd (GNENF, Financial), a Chinese manufacturer of lithium-based products and recycling solutions that it then sells in Mainland China, Hong Kong and internationally.
Ganfeng Lithium Co Ltd’s purchases of property, plant and equipment have grown at an average annual rate of approximately 19.54% over the past five years, from $73.15 million for full-year 2016 to $185.08 million for full-year 2020.
Morningstar analysts estimate that total revenue will grow about 80.13% annually over the next two fiscal years, reaching about $5.43 billion by 2023.
On Wall Street, the stock has a median recommendation rating of buy with an average price target of $205.30 per share.
The stock was trading at $16.10 per share at close on Thursday for a market capitalization of $29.27 billion thanks to a 15% increase that occurred over the past year. The price-book ratio is 10.38 versus the industry median of 2.07.
The price-book ratio may suggest that the stock is not cheap. However, as of this writing, Ganfeng Lithium Co Ltd’s weighted average cost of capital (WACC) is 7.7%, while Ganfeng Lithium Co Ltd’s return on invested capital (ROIC) is 11% (calculated using TTM financial statement data). This means that the company is very good at creating value for shareholders.
