3 Growth Stocks With Attractive Valuations

Includes: FRAN, GNC, MLNX
by: ONeil Trader

It is hard for companies to grow their business in this kind of economic environment. However, there are companies with healthy growth of earnings and revenue, even with this low growth economy. And having in mind above-average levels of growth, the valuations are also compelling, presenting value and growth at the same time, which is what I like the most when searching for investment opportunities.

Mellanox Technologies (MLNX)

Mellanox is a fabless semiconductor company. It produces and supplies interconnect products for computing, storage, and communication applications in the computing, Web 2.0, storage, financial services, database and cloud markets. This stock had a magnificent run this year, and a subsequent collapse in price, but the earnings and sales growth are still stellar, and the company has more growth to come. Trailing PE is 26.78, forward PE is 14.32, and the PEG ratio is a very low 0.36, with projected earnings growth of 74%, according to Finviz. The company has achieved a five-year EPS growth of 90.51% and five-year revenue growth of 39.81%

Source: Street Insider

The stock is currently in a downtrend, and is yet to bottom, after a huge run it had until early September. Its main competitor is now Intel (NASDAQ:INTC) after acquiring QLogic, but Intel is lagging with the technology, as it has 40Gbps infiniband technology, and Mellanox has a 56Gbps technology, and is going to introduce the 100Gbps in first half of 2014, before Intel, which will introduce the same speed technology in 2015 (100Gbps), and skip the 56Gbps, as was stated at the UBS Global Technology Conference.

Francesca's Holdings (FRAN)

Francesca's Holdings Corporation, through its subsidiary, Francesca's Collections, Inc., operates a chain of retail boutiques under the Francesca's collections brand in the United States. The company achieved healthy growth levels, with a 32.39% EPS growth in last five years, and 43.91% sales growth over the same period. Trailing PE is 26.86, forward PE 19.55, with a PEG ratio of 0.81, according to Finviz. And the company is yet to grow, with projected five-year EPS growth of 33% and a long-term plan to have 900 stores. The current store count is 360.

Source: Street Insider

GNC Holdings Inc (GNC)

GNC Holdings, Inc. operates as a specialty retailer of health and wellness products. As of December 31, 2011, it had approximately 7,600 locations, including approximately 5,900 retail locations in the United States comprising 924 franchises and 2,125 Rite Aid franchise store-within-a-store locations; and franchise operations in 53 countries, according to Yahoo Finance.

The company has a five-year projected earnings growth of 22%. Trailing PE is 15.18, forward PE is 12.06, and the PEG ratio is 0.69, according to Finviz. The stock has a 47.89 analysts' mean target price, presenting an upside potential of 46.72% from the current price of 32.64 (close price on December 27, the time of writing).

Source: Street Insider


These three stocks provide compelling growth and value opportunities. They should be nice long-term investments, especially at these price levels. One should provide the stocks with a little time to bottom technically, especially Mellanox and GNC Holdings, which are in a downtrend at the moment.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.