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3 Fast Growing Sales Stocks

GuruFocus.com
·4 min read

Total sales of the S&P 500 index (the benchmark for the U.S. market) have grown at an annualized rate of about 4.1% over the past five years through Sept. 30, 2019. The resulting tailwind drove the share price of the index up 50% until the end of last year.

Having outperformed the S&P 500 index in terms of a higher five-year sales growth rate, the following companies posted impressive share price returns of 70 to 140% over the past five years through Dec. 31, 2019.


The past is no guarantee of future performance, but companies that are growing their sales faster than the market have strong potential.

Wall Street sell-side analysts have also issued positive recommendation ratings for these stocks.

Jabil Inc

The first company under consideration is Jabil Inc (NYSE:JBL).

The St. Petersburg, Florida-based provider of manufacturing services to electronic components producers worldwide has grown its total revenue by 9.1% on average every year over the past five years, pushing the share price up nearly 100% through Dec. 31, 2019.

The stock traded at a price of $19.95 per share at close on March 19 for a market capitalization of $3.03 billion. The stock had a price-earnings ratio of 23.2 and a price-book ratio of 1.74.

These ratios, along with the Peter Lynch chart below, indicate that this stock is still not trading cheaply, even though the share price lost more than 45% in the last month of trading.

Wall Street sell-side analysts recommend an overweight rating for this stock with an average target price of $33.25.

GuruFocus assigned the company a moderate financial strength rating of 5 out of 10 and a high profitability rating of 8 out of 10.

Blackbaud Inc

The second company under consideration is Blackbaud Inc (NASDAQ:BLKB).

The Charleston, South Carolina-based provider of cloud software solutions to several clients in the U.S. and internationally grew its total revenue by a yearly average rate of 9.8% over the past five years, determining a more than 70% upside in the share price through Dec. 31, 2019.

The stock traded around a price of $49.07 per share at close on March 19 for a market capitalization of $2.41 billion. The stock had a price-earnings ratio of 196.28 and a price-book ratio of 6.01.

Regardless of the sharp decline of 33%, the above-listed ratios, together with the below Peter Lynch chart, indicate that the stock is not cheap.

Wall Street sell-side analysts recommend a hold rating for this stock with an average target price of $78.80 per share.

GuruFocus assigned the company a moderate financial strength rating of 4 out of 10 and a very good profitability rating of 7 out of 10.

Elbit Systems

The third company under consideration is Elbit Systems Ltd (NASDAQ:ESLT).

The Israeli developer and supplier of several systems and products for aerospace and defense worldwide has grown its total revenue by 4.7% on average every year over the past five years, determining a nearly 140% increase in the share price through Dec. 31, 2019.

The stock traded at a price of $121.78 per share at close on March 19 for a market capitalization of around $5.12 billion. The stock had a price-earnings ratio of 31.6 and a price-book ratio of 2.5.

These ratios, along with below Peter Lynch chart, tell that this stock is overvalued, despite the 25% tumble in the share price over the last month.

Wall Street sell-side analysts recommend buying shares of this stock and have established an average target price of $184.

GuruFocus assigned the company a moderate financial strength rating of 5 out of 10 and a very good profitability rating of 7 out of 10.

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

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This article first appeared on GuruFocus.