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Posted: Wed 0:12, 14 Aug 2013 Post subject: 5 Growth Stocks With Value Stock Prices-spun5 |
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5 Growth Stocks With Value Stock Prices
Joel Greenblatt's Magic Formula Investing(MFI) strategy is unequivocally something strategy, ranking the whole universe of equities by earnings yield (a proxy for price-to-earnings multiple) and return on tangible invested capital. This gives us a list of value priced stocks that have delivered good recent growth - normally a sign that they will be able to continue growing in the near future.
Rather than carrying out a straight statistical listing of the quickest growers in MFI, I've filtered them down to 5 stocks where the revenue increases could be suggestive of a growing underlying market,[link widoczny dla zalogowanych], instead of a once aberration. For example, the fastest growing stock in MFI is Acadia Pharmaceuticals (ACAD),[link widoczny dla zalogowanych], a development stage biopharmaceutical firm, with an over 300% revenue increase. However,[link widoczny dla zalogowanych], this really is entirely due to a one-time $35 million dollar milestone payment in December of this past year - not really a sustainable driver of revenue growth.
Within that framework,[link widoczny dla zalogowanych], listed here are 5 interesting, value priced growth stocks:
1) GT Advanced Technologies (GTAT)
TTM year-over-year Revenue Growth: 64%
GT Advanced Technologies is a production equipment provider for 3 areas: photovoltaic solar panels,[link widoczny dla zalogowanych], polysilicion (the material used in panels),[link widoczny dla zalogowanych], and sapphire crystals used for LED lighting production. While the solar and LED markets both seem to be within an oversupplied state at current, there is little change question that both (especially LED) are set to grow rapidly within the next many years. This may make GTAT a stylish play in a currently very inexpensive valuation, for patient owners.
2) KLA-Tencor (KLAC)
TTM year-over-year Revenue Growth: 52%
KLA-Tencor can also be an equipment provider, for semiconductor production. The firm has a dominant position in yield management and process monitoring equipment. A few of the growth here's developing a cyclical spike from 2009's recessionary levels,[link widoczny dla zalogowanych], but KLA's $3.3 billion in revenues in the last 12 months is still a company record. Given the proliferation of electronics in almost anything from cellular devices to automobiles to toys, there remains an undercurrent of growth that KLAC is placed to benefit from for several years.
3) Motorcar Parts of America (MPAA)
TTM year-over-year Revenue Growth: 31%
Motorcar Parts takes old alternators and starters and remanufactures them for that "do-it-yourself" auto repair market. The key underlying driver of revenue growth is an aging auto fleet,[link widoczny dla zalogowanych], as new car sales have trailed the scappage rate for several years now. Tack-on aquisitions have served the firm well,[link widoczny dla zalogowanych], and MPAA has additionally improved their cost structure by moving operations to Mexico and Malaysia. Among the best operated small auto parts businesses you will find.
4) TeleNav (TNAV)
TTM year-over-year Revenue Growth: 24%
TeleNav offers its GPS Navigator voice-guided navigation software for cell phones along with other general-purpose computing devices. Contracts with Sprint and AT comprise the bulk of its business. This is a tough one, because there is really a plethora of competition, much of it free,[link widoczny dla zalogowanych], for example Android's built-in navigation app. However, TeleNav might make a pleasant acquisition candidate for just one from the mobile OS providers searching for a quality navigation offering to increase or improve upon existing offerings.
5) DG (DGIT)
TTM year-over-year Revenue Growth: 23% (not including yesterday's quarter)
DG provides digital delivery of traditional television and radio spots, as opposed to traditional physical "dub and ship" methods. The transition alone is attractive enough, as both television and radio proceed to digital distribution technologies. DG has additionally entered the online video ad creation/distribution business and integrated it using its TV offerings, developing a way to distribute video ads between your two mediums. There are plenty of underlying growth trends at play here.
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