A Trio of Stocks Growing Capex Fast
The following companies have increased their funds allocated to capital expenditures significantly over the past five years. This trend suggests these companies expect an increase in the demand for their goods and services in the near future, which should produce higher sales.
Therefore, the following holdings possess a high potential to improve their earnings per share over the next couple of years with expected positive repercussions on the share prices. Wall Street sell-side analysts corroborate this thesis as they have issued higher earnings estimates and positive recommendation ratings.
Park Aerospace
The first company that makes the cut is Park Aerospace Corp. (NYSE:PKE), a Westbury, New York-based manufacturer of advanced composite materials for the aerospace market.
The company spent $6.85 million for the purchase of property, plant and equipment in full fiscal 2020, which ended on Feb. 29, increasing tremendously from $430,000 invested in full fiscal year 2015.
Wall Street sell-side analysts predict that Park Aerospace's earnings per share will increase by 15% every year over the next five years.
Analysts also recommend a buy rating and have established an average target price of $26 per share.
The stock was trading at $10.72 per share at close on Friday for a market capitalization of $218.49 million. The share price has declined by 33.5% over the past year.
The stock has a price-book ratio of 1.55 versus the industry median of 1.71 and a price-sales ratio of 3.68 versus the industry median of 1.16.
OptimizeRx
The second company that has the criteria is OptimizeRx Corp. (NASDAQ:OPRX), a Rochester, Michigan-based provider of health care information services.
The company allocated $88,000 to the purchase of property, plant and equipment in 2019, which was an impressive growth from $10,000 spent in 2014.
Wall Street sell-side analysts predict that OptimizeRx's earnings per share will grow by 50% every year over the next five years.
The stock holds a buy recommendation rating with an average target price of $23 per share on Wall Street.
The stock was trading at $14.39 per share at close on Friday for a market capitalization of $210.77 million. The share price has fallen by 6% over the past year.
The stock has a price-book ratio of 4.83 versus the industry median of 2.5 and a price-sales ratio of 7.63 versus the industry median of 1.68.
Kinsale Capital Group
The third company that qualifies is Kinsale Capital Group Inc. (NASDAQ:KNSL), a Richmond, Virginia-based casualty and property insurer.
Kinsale Capital Group purchased property, plant and equipment for $19.62 million in 2019, increasing dramatically from spending of $1.06 million in 2014.
Wall Street sell-side analysts anticipate a 15% average annual increase in Kinsale Capital Group's earnings per share over the next five years.
Wall Street sell-side analysts have also recommended an overweight rating for this stock, which means that its share price is projected to outperform within a year.
The share price traded at around $158.24 at close on Friday after a 63.5% rise over the past year. The stock has a market capitalization of $3.52 billion.
The stock has a price-book ratio of 8.77 versus the industry median of 0.99 and a price-sales ratio of 10.43 compared to the industry median of 0.88.
Disclosure: I have no positions in any securities mentioned.
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This article first appeared on GuruFocus.
