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

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 |  Includes: AFOP, ANIK, GILD, MEI, MU, PEG, PGTI, WAIR
by: Kapitall

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

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Business relationship disclosure: Kapitall is a team of analysts. This article was written by Mary-Lynn Cesar, one of our writers. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.