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Summary

  • The US economy rebounded with a better-than-expected 4% annualized growth rate in the second quarter.
  • A 2.5% jump in consumer spending along with a 5.5% increase in business investment and a 9.5% surge in exports helped drive the economy to its best performance since 2013.
  • We screened for stocks with revenue growth higher than inventory, high sales growth and undervalued PEG that will benefit from this news.

After contracting a disappointing 2.9% in the first three months of the year, the US economy rebounded with a better-than-expected 4% annualized growth rate in the second quarter. Many, including the International Money Fund, had expected the US's GDP expansion to hover around 3%.

Instead, a 2.5% jump in consumer spending along with a 5.5% increase in business investment and a 9.5% surge in exports helped drive the economy to its best performance since the third quarter of 2013. And a buildup in private inventories, a value measurement determined by subtracting withdrawals from additions, added 1.7% to GDP growth.

The uptick in inventory and its role in the economy's second-quarter expansion inspired our following list. We began by screening for stocks with encouraging inventory trends, meaning that revenue grew faster than inventory year-over-year and inventory decreased as a percentage of the firm's assets during the same period. We then limited that group to stocks based in the US.

Click here for the full, interactive chart.

Next, we took a closer look at sales growth since the stocks were all relatively successful in clearing their inventory. We screened for stocks with high sales growth of 25% or greater quarter-over-quarter.

And for our final screen, we looked for stocks that were undervalued with a price/earnings growth ((NYSE:PEG)) ratio below 1.

Click here for the full, interactive chart.

1. Alliance Fiber Optic Products Inc. (NASDAQ:AFOP): Engages in the design, manufacture, and marketing of a range of fiber optic components and integrated modules incorporating these components to communications equipment manufacturers and service providers in North America, Europe, and Asia. Market cap at $240.19M, most recent closing price at $13.17.

Revenue grew by 104.77% during the most recent quarter ($24.88M vs. $12.15M y/y). Inventory grew by 35.92% during the same time period ($10.33M vs. $7.6M y/y). Inventory, as a percentage of current assets, decreased from 14.91% to 12.47% during the most recent quarter (comparing 3 months ending 2014-03-31 to 3 months ending 2013-03-31).

PEG ratio is 0.45.

2. Anika Therapeutics Inc. (NASDAQ:ANIK): Develops, manufactures, and commercializes therapeutic products for tissue protection, healing, and repair. Market cap at $697.24M, most recent closing price at $47.87.

Revenue grew by 123.02% during the most recent quarter ($34.01M vs. $15.25M y/y). Inventory grew by 30.45% during the same time period ($12.98M vs. $9.95M y/y). Inventory, as a percentage of current assets, decreased from 12.64% to 11.44% during the most recent quarter (comparing 3 months ending 2014-03-31 to 3 months ending 2013-03-31).

PEG ratio is 0.74.

3. Gilead Sciences Inc. (NASDAQ:GILD): Engages in the discovery, development, and commercialization of therapeutics for the treatment of life threatening diseases worldwide. Market cap at $143.1B, most recent closing price at $92.99.

Revenue grew by 97.46% during the most recent quarter ($4,998.96M vs. $2,531.64M y/y). Inventory grew by 18.93% during the same time period ($2,140.23M vs. $1,799.62M y/y). Inventory, as a percentage of current assets, decreased from 27.01% to 16.5% during the most recent quarter (comparing 3 months ending 2014-03-31 to 3 months ending 2013-03-31).

PEG ratio is 0.79.

Click here for the full, interactive chart.

4. Methode Electronics Inc. (NYSE:MEI): Designs and manufactures electro-mechanical devices worldwide. Market cap at $1.25B, most recent closing price at $32.88.

Revenue grew by 51.57% during the most recent quarter ($224.87M vs. $148.36M y/y). Inventory grew by 19.47% during the same time period ($71.6M vs. $59.93M y/y). Inventory, as a percentage of current assets, decreased from 23.17% to 18.76% during the most recent quarter (comparing 3 months ending 2014-05-03 to 3 months ending 2013-04-27).

PEG ratio is 0.53.

5. Micron Technology Inc. (NASDAQ:MU): Engages in the manufacture and marketing of semiconductor devices worldwide. Market cap at $34.79B, most recent closing price at $32.13.

Revenue grew by 71.79% during the most recent quarter ($3,982M vs. $2,318M y/y). Inventory grew by 46.19% during the same time period ($2,532M vs. $1,732M y/y). Inventory, as a percentage of current assets, decreased from 29.43% to 26.09% during the most recent quarter (comparing 13 weeks ending 2014-05-29 to 13 weeks ending 2013-05-30).

PEG ratio is 0.54.

6. PGT, Inc. (NASDAQ:PGTI): Engages in the manufacture and sale of windows and doors. Market cap at $431.99M, most recent closing price at $9.41.

Revenue grew by 26.55% during the most recent quarter ($62.72M vs. $49.56M y/y). Inventory grew by 13.57% during the same time period ($15.32M vs. $13.49M y/y). Inventory, as a percentage of current assets, decreased from 26.77% to 20.38% during the most recent quarter (comparing 13 weeks ending 2014-03-29 to 13 weeks ending 2013-03-30).

PEG ratio is 0.91.

7. Wesco Aircraft Holdings, Inc. (NYSE:WAIR): Distributes and provides supply chain management services to the global aerospace industry. Market cap at $1.85B, most recent closing price at $19.20.

Revenue grew by 44.94% during the most recent quarter ($327.36M vs. $225.86M y/y). Inventory grew by 24.69% during the same time period ($739.13M vs. $592.76M y/y). Inventory, as a percentage of current assets, decreased from 67.91% to 61.83% during the most recent quarter (comparing 3 months ending 2014-03-31 to 3 months ending 2013-03-31).

PEG ratio is 0.98

Source: 7 Stocks With High Sales Growth To Watch After Yesterday's GDP Data