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Alberto Abaterusso
Alberto Abaterusso
Articles (2388) 

A Trio of Fast-Growing EPS Stocks

T-Mobile US Inc. tops the list

December 05, 2019 | About:

Do you want to pick stocks that carry a high potential to continue to drive their share prices higher? Then you may need to choose those stocks that grow their earnings at a faster pace than the market.

The S&P 500 index, which is the benchmark for U.S.-listed stocks, has grown its earnings by 41% over the past five years through June 30, making the share price rise 55.5% to $3,112.76 at close on Wednesday.

Past performance cannot be taken as a pledge of future results, but it works as a good evaluator of which businesses have been doing things right. Investors may be interested in the following securities that have topped the S&P 500 in terms of higher cumulative earnings growth over the past five years.

The selected stocks have been compared with the index on earnings per share without non-recurring items.

T-Mobile US

T-Mobile US Inc. (NASDAQ:TMUS) has grown its trailing 12-month earnings per share without non-recurring items by 137.8% over the past five years, as illustrated in the chart below, pushing the share price up 175% to $78.34 at close on Wednesday, topping the S&P 500 by 119.5%.

The Bellevue, Washington-based provider of mobile communications services in the United States, U.S. Virgin Islands and Puerto Rico has a market capitalization of $67 billion, a price-earnings ratio of 19.99 versus the industry median of 18.83 and a price-sales ratio of 1.52 compared to the industry median of 1.41.

Wall Street issued a recommendation rating of 1.9, which belongs to the subrange of 1 (Strong Buy) to 2 (Buy), and set an average target share price of $89.

Tactile Systems Technology

Tactile Systems Technology Inc. (NASDAQ:TCMD) has grown its trailing 12-month earnings per share without non-recurring items by 97.2% over the past five years, as shown in the chart below. Over the same period of time, the share price has risen 459.2%, topping the S&P 500 index by 404.5%. The stock closed at a price of $62.95 per share on Wednesday.

The Minneapolis, Minnesota-based developer of medical devices for the treatment of chronic patients has a market capitalization of approximately $1.2 billion, a price-earnings ratio of 136.84 versus the industry median of 30.68 and a price-sales ratio of 6.88 versus the industry median of 3.47.

Wall Street issued a buy recommendation rating for shares of Tactile Systems Technology with an average target price of $77.80.

TriNet Group

TriNet Group Inc. (NYSE:TNET) has increased its trailing 12-month earnings per share without non-recurring items by 82.8% over the past five years, as illustrated in the chart below, driving an 81% rise in the share price, which topped the S&P 500 index by 26.5%. The share price traded at $53.89 at close on Wednesday for a market capitalization of roughly $3.78 billion.

The Dublin, California-based provider of staffing and employment services to small and midsize companies in North America has a price-earnings ratio of 20.07 versus the industry median of 17.42 and a price-sales ratio of 1.03 compared to the industry median of 0.95.

Wall Street issued an overweight rating for shares of TriNet Group Inc with an average target price of $71.75.

Disclosure: I have no positions in any securities mentioned in this article.

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About the author:

Alberto Abaterusso
I am a contributor at GuruFocus. I primarily write about how to pick potential value stocks. Gold, silver and precious metals mining industries is also my cup of tea. My articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. I hold a Master\\\'s Degree in Business Administration from Università degli Studi di Bari (Italy), Aldo Moro. I am based in The Netherlands.

You can follow me on Twitter at https://twitter.com/AAbaterusso

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