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Screening for the Best Growth Stocks in Summer of 2022

·4 min read
  • (1:15) - Are There Any Attractive Growth Stocks Right Now?

  • (6:20) - Narrowing Down The Top Performers: Stocks To Keep On Your Radar

  • (17:40) - Episode Roundup: PRDO, ABNB, SAFM, CTLP, HUBG

  • Podcast@Zacks.com

 

Welcome to Episode #320 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

This week, Tracey is going solo to find some growth stocks with high Zacks Rank and a high Zacks Style Score for growth. How hard can it be?

Zacks has several predefined growth stock screens on its screening page on Zacks website which are available to Zacks Premium members and Tracey. She did the screens for you.

While she didn’t expect to get a lot of growth stocks with rising earnings and a high Rank, she was surprised when one of the screens, that included a top 50 Industry Rank, only gave her one stock.

Are things really that gloomy in growth stocks?

Top Ranked Growth Stocks on the Move

1.       Perdoceo Education PRDO

Perdoceo Education is the one stock in the Top Ranked Growth Stocks on the Move screen. It offers post-secondary education, including Associate and Bachelor’s degrees, mainly online but it also operates 4 ground campuses including the Colorado Technical University in Colorado.

Perdoceo Education is in the Education industry which is currently in the top 39% on the Industry Rank.

It’s a Zacks Rank #2 (Buy) stock.

Perdoceo shares are down 8.2% over the last year and trade with a forward P/E of 8.4.

Don’t like the education industry, then you might want to run a second screen like Tracey did.

Market Beating Growth Stocks

There’s another screen that did not use the Industry Rank but looked simply for 20% or more projected EPS growth, the Zacks Rank of #1 (Strong Buy) and the Zacks Style Score for Growth of A.

Running that screen, it returned 31 stocks.

2.       Airbnb ABNB

Airbnb is a Zacks Rank #1 (Strong Buy) even though the shares have fallen 40% year-to-date.

Airbnb’s earnings are expected to jump 419% this year to $1.82 from a loss of $0.57. As it now has positive earnings, it has a forward P/E. But that P/E is still high at 56x.

Airbnb’s shares are trading near 52-week lows, is all the bad news priced in?

3.       Sanderson Farms SAFM

Sanderson Farms is the third largest poultry producer in the United States. Earnings are expected to soar 137.1% this year to $48.02 from $20.25 last year.

It’s a rare stock that’s in the green this year, with shares up 15.1% year-to-date.

Sanderson Farms stock is also still dirt cheap, with a forward P/E of just 4.5.

Should you forget about technology stocks and buy Sanderson Farms instead?

4.       Cantaloupe, Inc. CTLP

Cantaloupe is a small cap software and payments company that provides end-to-end technology solutions for the unattended retail market, such as vending machine companies, laundromats and kiosks.

Cantaloupe’s earnings are expected to rise 86% in fiscal 2022 with earnings expected to jump to a loss of $0.02 from a loss of $0.14 last year. Analysts also expect it to be earnings positive next fiscal year.

Shares have tumbled 39% year-to-date and are down 54% over the last year.

Is all the negative news now priced into Cantaloupe’s shares?

5.       Hub Group HUBG

Hub Group is a transportation and logistics management company that was founded in 1971.

On Apr 28, 2022, it reported its first quarter results and saw record quarterly revenue up 41% to $1.3 billion, record quarterly gross margin and record quarterly earnings.

Hub Group also raised full year guidance at that time. Earnings are expected to rise 86.7% to $9.45 from $5.06 last year.

However, shares are down 16.4% year-to-date and are cheaper than ever, with a forward P/E of 7.6.

But with the possibility of a slowing economy, should you own one of the logistics companies in 2022?

What Else do you Need to Know About Finding Top Growth Stocks This Summer?   

Tune into this week’s podcast to find out.


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
 
Sanderson Farms, Inc. (SAFM) : Free Stock Analysis Report
 
Hub Group, Inc. (HUBG) : Free Stock Analysis Report
 
Perdoceo Education Corporation (PRDO) : Free Stock Analysis Report
 
Airbnb, Inc. (ABNB) : Free Stock Analysis Report
 
Cantaloupe, Inc. (CTLP) : Free Stock Analysis Report
 
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