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Growth is good because it increases earnings meaningfully and lets the current P/E ratio go down. This is the reason investors pay 20, 50 or even 100 times earnings for an investment. But you really make money if you buy a stock that beats analyst expectations and generates additional growth fantasies. Let’s take a look into the networking and communication devices industry. The industry offers a dividend yield of 1.5 percent, and the average price-to-earnings ratio amounts to 16.4.

I analyzed the networking and communication devices industry by growth stocks. My first condition is that the 5-year sales and earnings per share growth should be above 15 percent. Further, the company should have additional growth potential, measured by a positive expected 5-year EPS growth. Finally, the growth should create value. This fact is covered by the ratio return on investment. The ratio shows how efficiently a company converts its debt and equity into profits. I decided to screen only stocks with a positive ROI. Here the results:

1. Super Micro Computer (NASDAQ:SMCI) has a market capitalization of $550.5 million, generates revenues in an amount of $942.6 million and a net income of $39.6 million. Its following P/E ratio is 14.5 and forward price to earnings 9.8, Price/Sales 0.6 and Price/Book ratio 1.9. Dividend Yield: 0 percent. The company grew 25.5 percent in sales and 11.9 percent in EPS over the past five years. For the upcoming five years, EPS is expected to grow 15.5 percent. The ROI is 14.4 percent.

2. Finisar (NASDAQ:FNSR) has a market capitalization of $1.8 billion, generates revenues in an amount of $969.1 million and a net income of $79.1 million. Its folloing P/E ratio is 22.0 and forward price to earnings 13.1, Price/Sales 1.8 and Price/Book ratio 2.5. Dividend Yield: 0 percent. The company grew 21.1 percent in sales and 12.7 percent in EPS over the past five years. For the upcoming five years, EPS is expected to grow 24.3 percent. The ROI is 12.4 percent.

3. Globecomm Systems (NASDAQ:GCOM) has a market capitalization of $320.4 million, generates revenues in an amount of $274.2 million and a net income of $9.0 million. Its following P/E ratio is 34.1 and forward price to earnings 15.2, Price/Sales 1.2 and Price/Book ratio 1.7. Dividend Yield: 0 percent. The company grew 16.8 percent in sales and 7.2 percent in EPS over the past five years. For the upcoming five years, EPS growth is expected at 21.0 percent. The ROI is 4.5 percent.

4. Juniper Networks (NYSE:JNPR) is the second-biggest player within the industry. JNPR has a market capitalization of $10.2 billion, generates revenues in an amount of $4.4 billion and a net income of $570.1 million. Its following P/E ratio is 18.1 and forward price to earnings 12.5, Price/Sales 2.3 and Price/Book ratio 1.5. Dividend Yield: 0 percent. The company grew 14.7 percent in sales and 14.5 percent in EPS over the past five years. For the upcoming five years, EPS growth is expected to be 17.4 percent. The ROI is 7.7 percent.

Source: 4 Fastest-Growing Networking And Communication Stocks