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Do you prefer investing in companies expected to grow at high rates?

We ran a screen on stocks expected to grow, with 5-year projected EPS growth above 20%. We then screened for those trading under $5.

Finally we screened for those with strong trends in revenue relative to inventory: increases in quarterly revenue outpacing change in inventory year-over-year, as well as inventory becoming a smaller portion of current assets over that time period.

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.

We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.

Do you think these companies will grow as fast as analysts expect? Use this list as a starting point for your own analysis.

1. Alphatec Holdings, Inc. (NASDAQ:ATEC): Engages in the design, development, manufacture, and marketing of products for the surgical treatment of spine disorders, primarily focused on the aging spine. Price at $1.87. 5-year projected EPS growth rate at 67.00%. Revenue grew by 7.58% during the most recent quarter ($49.51M vs. $46.02M y/y). Inventory grew by -11.06% during the same time period ($45.92M vs. $51.63M y/y). Inventory, as a percentage of current assets, decreased from 42.04% to 39.44% during the most recent quarter (comparing 3 months ending 2011-12-31 to 3 months ending 2010-12-31).

2. Orion Energy Systems, Inc (NYSEMKT:OESX): Engages in the development, manufacture, and sale of lighting and energy management systems, controls, and services. Price at $2.43. 5-year projected EPS growth rate at 35.00%. Revenue grew by 15.95% during the most recent quarter ($27.41M vs. $23.64M y/y). Inventory grew by 3.04% during the same time period ($33.21M vs. $32.23M y/y). Inventory, as a percentage of current assets, decreased from 42.51% to 41.67% during the most recent quarter (comparing 3 months ending 2011-12-31 to 3 months ending 2010-12-31).

3. Zogenix, Inc. (NASDAQ:ZGNX): Engages in the development and commercialization of products for the treatment of central nervous system disorders and pain. Price at $2.71. 5-year projected EPS growth rate at 25.00%. Revenue grew by 47.31% during the most recent quarter ($10.4M vs. $7.06M y/y). Inventory grew by -2.27% during the same time period ($17.2M vs. $17.6M y/y). Inventory, as a percentage of current assets, decreased from 51.24% to 17.84% during the most recent quarter (comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30).

*Accounting data sourced from Google Finance, all other data sourced from Finviz.

Source: 3 High Growth Stocks Under $5 With Positive Inventory Trends