Growth Stocks
Cognex Corp Cognex Corp (CGNX) stock price has dropped 30% over the past six months largely due to a once off tax charge that meant earnings increased by “just” 19% in 2017. However analysts looking beyond that non-recurring charge would see Q4 revenue increased 39% and adjusted net income rose 46%. That follows years of strong 30% earnings growth.
The company, which makes machine vision systems to capture digital images that can be processed by computers, has a bright future. The business is driven by automation, production lines and robotics and there is huge potential. Management project sales from areas such as 3D products and logistics will grow 50% annually. After the recent drop the stock trades on a TTM PE of 35. Given the fantastic prospects that looks cheap.
Spartan Motors Speciality Vehicle manufacturer Spartan Motors (SPAR - beware small cap stock) has had a good year in 2017 with revenues up 20% and earnings up c.86% (fourth quarter earnings more than doubled). The CEO said that the performance will "provide a sound foundation for future long-term growth, increased shareholder value and an acceleration of earnings growth in 2018".
The company has a rosy outlook with significant opportunities from entering the fragmented commercial and retail market, from an expanding e-commerce delivery business that supports the growing number of retailers entering the home delivery segment and from its optimal position to serve the growing alternative fuel market for the large fleet operators.
That's a lot of positives driving recent growth and enabling the company to guide for revenue growth of 13% and adjusted EPS growth of 39% in 2018.
Given all the good news its no surprise the stock price has doubled over the past year. But with a price/sales of 0.83 and a 2019 forward PE of 15 the stock still looks good value.
Please be aware that with a market cap of $600 million Spartan Motors is a small cap stock with elevated risks and little liquidity.
Value Stocks Rocky Mountain (RME) agricultural dealerships trades on a pretty cheap valuation (TTM PE 10.5) and pays a decent dividend (3.7%). For a cyclical dealership that would suggest that its nearing the end of the upcycle, but the outlook for Rocky Mountain looks positive for a number of reasons.
Steep manufacturer price increases in 2016 and 2017 have held back demand and a jump in sales is expected. Farmers incomes are faring reasonably well and farmers can only hold off upgrading tractors in the short term -- eventually pent up demand returns with force.
If that demand is coupled with multiple expansion to a reasonable PE of 12 or even 14 investors would see significant upside of 40% or more.
Insider Buying At Ryman Hospitality Properties (RHP), the hotel REIT, CEO Colin V. Reed purchased $487,291 of stock on Tuesday. It was his second purchase year having purchased $450,000 in January. It comes after a very strong performance in 2017 with net income increasing 10.5 percent to $176.1 million for the year.
Mr Reed said at that time “With limited new supply coming online for the foreseeable future, and our own high-return capital projects scheduled to open throughout 2018, we believe we are in a prime position to benefit from this unique opportunity in both the near and long-term.” In guidance Mr Reed said he believed 2018 was shaping up to be a strong year and that the forward book of business was as strong as it has ever been and guided for adjusted EBITDA to increase 8.3%.
That positive outlook is supported by Citi analyst Michael Bilerman who upgraded RHP earlier this month due to its promising growth outlook. With a yield of 4.3% and decent growth prospects other investors may want to join Mr Reed.
Microcap RF Industries Limited (RFIL) is a high risk microcap with a market capitalisation of just $50 million. That said it has seen a remarkable level of growth in recent quarters with revenues increasing 56% year on year in the first quarter and a loss of $339,000 became a profit of $454,000. The company provides products and systems for radio frequency (RF) communications and wireless with notable applications for mobile networks.
Growth was reported across all divisions and management said they were beginning to see very early preparations for the roll out of 5G for which RFIL produce the cable, the connectors, the jumpers, all the equipment to allow the radio systems to function. That’s going to provide huge growth over the next two years and RFIL is already seeing the benefits.
The company reported an increase in backlog to $20.2 million as of January 31, 2018 compared to $4 million at October 31, 2017. Thats huge growth for a company with annual sales of $30 million. It’s more notable given RFIL has historically not had a large backlog and indeed it’s rarely ever been disclosed.
The stock price has increased 266% over the past year but with revenue growth of 50%, the company’s return to profitability and a valuation of 1.25 times annualised sales -- that looks cheap.
For the record, I don’t own any of these stock. I am not being paid to write this. I am not a bot. I just found the ideas interesting.
This post is not a recommendation to buy or sell any security or derivative. Stocks are not suitable for all investors. Please do your own research.
Submitted April 21, 2018 at 07:59AM by InterestingNews1 https://ift.tt/2vuQYUU
