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3 Highly-Ranked Stocks With Stellar Projected Growth

·4 min read

It’s undoubtedly been a rough year to be an investor so far. A challenging macroeconomic backdrop has caused widespread margin compression, leaving stocks to tumble.

However, the general market’s performance over the last month is a major positive, signaling that bears could be tiring out.

The chart below illustrates the S&P 500’s performance over the last month.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Now that we’re finally seeing some buyers return, it’s beneficial for investors to carry strong stocks with robust growth projections.

Three highly-ranked stocks with promising bottom and top-line growth forecasts include Quanex Building Products NX, Taiwan Semiconductor Manufacturing TSM, and Kronos Worldwide KRO.

The chart below illustrates the share performance of all three companies over the last year while blending in the S&P 500 as a benchmark.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Let’s get into why these companies would be solid bets moving forward.

Quanex Building Products

Quanex Building Products Corporation NX is an industry-leading manufacturer of components sold to Original Equipment Manufacturers (OEMs) in the building products industry.

Analysts have been raising their earnings outlook across nearly all timeframes, helping push the company into the highly-coveted Zacks Rank #1 (Strong Buy).

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

The company’s projected top and bottom-line growth rates are stellar.

For the current fiscal year (FY22), the Zacks Consensus EPS Estimate resides at $2.35, penciling in a sizable double-digit 35% expansion in the bottom-line year-over-year.

Projected top-line growth is also rock-solid; Quanex Building Products is projected to generate $1.2 billion in sales in FY22, good enough for an 11% uptick in annual revenue from FY21.

The chart below illustrates the company’s revenue on a quarterly basis.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

In addition, NX sports enticing valuation metrics, bolstered by its Style Score of an A for Value. Its 10.3X forward earnings multiple is well below its five-year median of 18.6X and represents an attractive 42% discount relative to the S&P 500.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Taiwan Semiconductor Manufacturing

Taiwan Semiconductor Manufacturing TSM is the world’s largest circuit foundry responsible for supplying microchips to an elite list of companies, including Apple AAPL, Nvidia NVDA, and Advanced Micro Devices AMD.

Analysts have been bullish across all timeframes over the last 60 days, landing the company into a Zacks Rank #1 (Strong Buy).

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Top and bottom-line forecasts allude to serious growth.

For the current fiscal year (FY22), the Zacks Consensus EPS Estimate resides at $6.30, notching a stellar 53% expansion of the bottom-line year-over-year.

The growth doesn’t stop there – TSM is forecasted to generate a mighty $77.8 billion in revenue in FY22, good enough for a 37% double-digit uptick from FY21 sales of $56.8 billion.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Additionally, TSM sports an enticing 13.4X forward earnings multiple, nowhere near its five-year median of 19.9X and representing a substantial 24% discount relative to the general market.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Kronos Worldwide

Kronos Worldwide KRO is a leading producer and marketer of TiO2, a white pigment for providing whiteness, brightness, and opacity. The company is a Zacks Rank #2 (Buy).

Kronos has been on a nice earnings streak, exceeding the Zacks Consensus EPS Estimate by an average of 24% over the last four quarters and recording an impressive 78% bottom-line beat in its latest earnings release.

In addition, KRO is forecasted to grow at a breakneck pace.

For the current fiscal year, the Zacks Consensus EPS Estimate resides at $2.06, displaying a jaw-dropping triple-digit growth in earnings year-over-year of more than 110%.

Top-line growth is also remarkable; Kronos is projected to generate $2.3 billion in revenue for the current fiscal year (FY22), penciling in a rock-solid 16% increase in annual sales year-over-year.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

KRO’s Style Score of an A for Value indicates that shares could be undervalued.

The company’s forward earnings multiple sits enticingly at 8.4X, a fraction of its five-year median value of 14.2X. In addition, shares trade at a steep 52% discount relative to the general market.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Bottom Line

The rebound is long overdue, with buyers returning and pushing bears back into hibernation. As we continue to navigate the rough economic waters we’ve found ourselves in, market participants are hopeful this recent strength can continue.

Of course, you want to have strong stocks in your portfolio.

All three stocks above have stellar projected growth rates, strong Zacks Ranks, and enticing valuation levels, making them attractive to any investor.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Apple Inc. (AAPL) : Free Stock Analysis Report
 
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
 
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
 
Taiwan Semiconductor Manufacturing Company Ltd. (TSM) : Free Stock Analysis Report
 
Quanex Building Products Corporation (NX) : Free Stock Analysis Report
 
Kronos Worldwide Inc (KRO) : Free Stock Analysis Report
 
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