Seeking Alpha
Value, growth, long-term horizon, medium-term horizon
Profile| Send Message|
( followers)  

If you're looking for growth ideas, the following list might offer an interesting starting point.

All of the stocks mentioned below have reported sales growth of more than 20% over the past five years and have projected EPS growth rates above 20% for the next five years.

Additionally, all of these stocks have, on average, seen more insider buying than insider selling over the last two years (excluding exercised options).

Based on the enthusiasm of insiders, some might see these stocks are set for future gains. What do you think? Full details below.

Insider data sourced from Fidelity and earnings projections sourced from Finviz.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research. Note: The numbers on top of items represent the forward P/E ratio, if available.

1. VMware, Inc. (NYSE:VMW): Technical & System Software Industry. Market cap of $36.83B.

Over the last five years, sales have grown by 49.15%, and EPS have grown by 33.26%. EPS is projected to grow by 22.41% over the next 5 years. Insiders purchased an average of 2,831,074 shares per year over the last two years.

Short float at 4.21%, which implies a short ratio of 2.09 days. The stock has gained 87.49% over the last year.

Other Highlights:

- The company's capital spending accelerated by 44.85% over the last five years, much faster than the industry average of 17.43%. At least theoretically, this makes them more competitive over the coming years, since their operational assets are more up-to-date.

- The company has demonstrated rapid cash flow growth over the last five years, which may lower their risk going forward. Five year average cash flow growth at 42.2%, much higher than the industry average at 17.69%.

- The company also has low debt and great liquidity, which significantly reduces its risk over the coming months. During the most recent quarter, the total Debt/Assets ratio stood at 6.62% vs. the industry average at 12.57%. Total Debt/Equity came in at 11.82%, lower than the industry average at 27.33%. The company also appears to be more liquid than its competitors. The TTM Current Ratio stands at 2.45, higher than the industry average at 2.18. (Note: All ratios based on the most recent quarter, annualized)

2. ChinaCast Education Corporation (OTCPK:CAST): Education & Training Services Industry. Market cap of $336.02M.

Over the last five years, sales have grown by 33.88% over the past 5 years, while EPS have grown by 54.61%. EPS is projected to grow by 30.0% over the next 5 years. Insiders purchased an average of 575,821 shares per year over the last two years.

Short float at 2.39%, which implies a short ratio of 2.36 days. The stock has lost -11.42% over the last year.

Other Highlights:

- The company appears to be undervalued relative to book value. Price/Book ratio at 1.33, much lower than the industry average of 4.53.

- The company's capital spending accelerated by 177.13% over the last five years, much faster than the industry average of 6.66%. At least theoretically, this makes them more competitive over the coming years, since their operational assets are more up-to-date.

- When compared to industry competitors, the company reported better than average profit margins during the most recent quarter. Gross margins came in at 69.94%, higher than the industry average at 48.23% (most recent quarter, annualized). Operating margin came in at 32.69%, higher than the industry average at 7.96%, while net profit margin came in at 32.69% vs. the industry average at 7.96%.

3. Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA): Personal Services Industry. Market cap of $2.52B.

Over the last five years sales have grown by 20.01%, while EPS have grown by 43.92%. EPS is projected to grow by 24.29% over the next 5 years. Insiders purchased an average of 59,900 shares per year over the last two years.

Short float at 10.26%, which implies a short ratio of 8.09 days. The stock has gained 129.38% over the last year.

Other Highlights:

- The company has demonstrated rapid cash flow growth over the last five years, which may lower their risk going forward. Five year average cash flow growth at 21.56%, much higher than the industry average at 4.1%.

- Judging by trailing twelve month (NYSE:TTM) ratios like Return on Equity (ROE), Return on Assets (ROA) and Return on Invested Capital (NYSE:ROI), it's clear that the company's management is doing an excellent job. TTM ROE at 19.1%, higher than the industry average at 12.73%, TTM ROA at 10.07% vs. the industry average at 8.97%, and TTM ROI at 17.93%, higher than the industry average at 14.74%. However, it's worth pointing out that the company underperformed its industry competitors in terms of the TTM Return on Sales ratio (4.44% vs. the industry average at 5.31%).

- Institutional and mutual fund investors have been net purchasers of the company's shares over the last two quarters, suggesting that the smart money thinks there's more upside to the stock. Institutional investors have been net buyers of 530.0K shares during the most recent quarter, vs. 6.3M net shares purchased in the previous quarter. Mutual fund investors have also been optimistic on the stock. They were net buyers of 2.4M shares during the most recent quarter, vs. 4.0M net shares purchased in the previous quarter.

4. Deckers Outdoor Corp. (NYSE:DECK): Apparel Footwear & Accessories Industry. Market cap of $3.26B.

Over the last five years, sales have grown by 30.51%, while EPS have grown by 34.07%. EPS is projected to grow by 24.0% over the next 5 years. Insiders purchased an average of 10,250 shares per year over the last two years.

Short float at 11.47%, which implies a short ratio of 2.47 days. The stock has gained 145.04% over the last year.

Other Highlights:

- The company appears to have a very efficient workforce, which should help manage cost pressures going forward. Trailing twelve month Income/Employee stands at $136,746, higher than the industry average at $60,974. The company also outperformed on the Revenue/Employee metric ($918,850 vs. the industry average at $411,030).

Source: 4 High Growth Stocks Being Snapped Up by Insiders