Sales represent the first line of a company's income statement and is a very important catalyst to the share prices of U.S. stocks.
In the past five years, 4.4% growth in total sales has moved the share price of the S&P 500 Index up by 58.2% to $3,234.85 at market close on Jan. 3.
The following stocks have surpassed the benchmark for the U.S. market in terms of a higher sales growth in the observed time period, showing large returns in the 50% to 200% range.
While the past is no guarantee of future performance, having already increased their sales significantly, the following companies bear a consistent potential to continue to do so in the coming years with expected positive repercussions on their market values drawing investors' interest.
Further, analysts are positive about the following holdings as they have released optimistic recommendation ratings.
Here are some results of my research.
The first company to have a look at is UnitedHealth Group Inc. (NYSE:UNH).
The Minnetonka, Minnesota-based diversified health care company has grown its total revenue by nearly 14% in the past five years, determining a 192.7% rise in the share price.
The stock closed at $289.54 on Friday for a market capitalization of $274.31 billion, a price-earnings ratio of 21.06 and a price-sales ratio of 1.18.
Peter Lynch tells us that this stock may be not trading at its cheapest.
Wall Street sell-side analysts recommend, however, buying shares of UnitedHealth Group and have set an average target price of $311.64 to hit within 12 months.
Further, GuruFocus assigned a positive financial strength rating of 6 out of 10 and a very high profitability rating of 9 out of 10.
The second company to consider is eBay Inc. (NASDAQ:EBAY).
The San Jose, California-based e-commerce platform operator has grown its total revenue by 5.2% in the past five years, determining a 55.3% increase in the share price.
The stock closed at $35.96 per share on Friday for a market capitalization of $29.25 billion, a price-earnings ratio of 16.35 and a price-sales ratio of 2.95.
The stock appears to trade near its fair value, according to the Peter Lynch chart.
Wall Street sell-side analysts recommend, however, to maintain holdings of eBay and have established an average target price of $40.03 to hit within 12 months, which reflects 11.3% growth.
Further, GuruFocus assigned a moderate financial strength rating of 4 out of 10 and a high profitability rating of 8 out of 10.
Arthur J. Gallagher
The third company under consideration is Arthur J. Gallagher & Co. (NYSE:AJG).
The Rolling Meadows, Illinois-based provider of insurance brokerage and third-party claims settlement services has increased its total revenue by nearly 15% in the past five years, pushing the share price up 104.5%.
The stock traded around $95.31 at close on Friday, determining a market capitalization of $17.78 billion, a price-earnings ratio of 26.18 and a price-sales ratio of 2.55.
The Peter Lynch chart indicates that the stock is currently not trading cheaply.
Nevertheless, Wall Street sell-side analysts are suggesting buying Arthur J. Gallagher as they have issued an overweight recommendation rating with an average target price of $99. The overweight recommendation rating means that this stock is expected to perform better than the majority of its competitors or even the overall market. The average target price implies a nearly 4% upside from Friday's closing price.
Disclosure: I have no positions in any securities mentioned in this article.
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This article first appeared on GuruFocus.