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Arie Goren, Portfolio123 (475 clicks)
Long only, value, research analyst, dividend investing
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Many different investors put their money in the stock market: some seek stocks of stable and well-known big companies, that pay dividend and have a minimal drawdown risk; others search for stocks that might yield extraordinary return, and for that they are willing to take a higher risk. Finding the next high flying stocks is not an easy task, and luck has surely something to do with it, but we might also get some idea by looking at the past twelve months best performers.

In order to find the past twelve months best performers, but not to fall into the trap of very small companies, whose shares price is very low and each price change shows huge percentage change, we have decided to look only for companies that were included in one of the three S&P Indexes (total 1,500 companies):

S&P 500 - The index includes 500 leading companies in major industries of the U.S. economy, capturing 75% coverage of U.S. equities.

S&P MidCap 400 - The index includes 400 mid cap companies and covers over 7% of the U.S. equity market and seeks to remain an accurate measure of mid-sized companies.

S&P SmallCap 600 - The index includes 600 small cap companies and covers approximately 3% of the U.S equities market, measuring the small cap segment of this market.

The best performers 25 stocks in the past twelve months are listed in the tables below:

*Price change between 05/25/2011 to 05/25/2012

*Assuming Shares Outstanding remained constant during last 12 months

Some prominent conclusions drawn from the list:

  • Small cap stocks are definitely the main winners, 18 companies (72%) of the 25 best performers are companies included in the S&P SmallCap 600 index, 4 companies (16%) are S&P MidCap 400 companies and only 3 companies (12%) are S&P 500 companies, Apple among them, of course.
  • The past twelve months best performers were also very good the year before (05/25/2010 to 05/25/2011) and showed an average price change of 55.7% against price change of 99.4% in the past 12 months.
  • Only 5 companies among the 25 winners paid dividends, the average dividend yield of the group was 0.15%.
  • Looking for sector division, Consumer Goods was the main sector with 9 companies, 7 companies were from the Services sector, 5 companies from Technology sector, 3 companies from Healthcare and only one company from the Basic Materials sector, almost all companies were from different industries.

Studying earning reports of the best performers showed that almost all of them (except MOV, MNST and BTH) achieved an average earning surprise (results better than expected) in the last 4 quarters.

Based on the past year's results, we started the search for the possible next best performing stocks. Our interest was in stocks that were included in the S&P 600 index , reported better than expected earnings and whose business has been improving. Screening this universe we have found 5 promising stocks that might appreciate significantly, the list of these stocks is presented below followed by some relevant data (sources: Yahoo Finance and Finviz). We strongly recommend for any investor to make a thorough research before investing in any of these stocks or others.

CTS Corporation (CTS)

CTS Corporation engages in the design, manufacture, assembly, and sale of electronic components and sensors, as well as the provision of electronics manufacturing services worldwide. It operates in two segments, Electronics Manufacturing Services, and Components and Sensors.

Price 05/30/2012 (Intraday)

9.40

Forward P/E

10.34

PEG

0.83

Price/Book

1.23

Enterprise Value/EBITDA

13.04

Next 5 Years Annual EPS Growth Estimates

15.05%

Total Debt/Equity

41.00%

Dividend Yield

1.46%

AMN Healthcare Services Inc. (AHS)

AMN Healthcare Services, Inc. Provides healthcare staffing and clinical workforce management solutions in the United States. The company operates in three segments: Nurse and Allied Healthcare Staffing, Locum Tenens Staffing, and Physician Permanent Placement Services. On 04 May 2012, Robert W. Baird upgraded the stock from Neutral to Outperform with target price of $9.

Price 05/30/2012 (Intraday)

6.08

Forward P/E

12.96

PEG

1.22

Price/Book

1.80

Enterprise Value/EBITDA

7.89

Next 5 Years Annual EPS Growth Estimates

14.50%

Total Debt/Equity

118.00%

Dividend Yield

0.00%

On Assignment Inc. (ASGN)

On Assignment, Inc., A diversified professional staffing firm, provides flexible and permanent staffing solutions in the United States, Europe, Canada, Australia, and New Zealand. The company's Life Sciences segment provides contract and permanent life science professionals to clients in the biotechnology, pharmaceutical, food and beverage, personal care, chemical, medical device, automotive, municipal, education, and environmental industries. The company's Healthcare segment offering locally-based and traveling contract professionals that include nurses, specialty nurses, respiratory therapists, surgical technicians, imaging technicians, X-ray technicians, medical technologists, medical assistants, pharmacists, pharmacy technicians, respiratory therapists, phlebotomists, coders, billers, claims processors, and collections staff, as well as dental professionals.

Price 05/30/2012 (Intraday)

16.61

Forward P/E

14.13

PEG

1.17

Price/Book

2.46

Enterprise Value/EBITDA

11.66

Next 5 Years Annual EPS Growth Estimates

15.00%

Total Debt/Equity

0.00%

Dividend Yield

0.00%

Stamps.com Inc. (STMP)

Stamps.com Inc. Provides Internet-based postage solutions. The company offers solutions to mail and ship various mail pieces, including postcards, envelopes, flats, and packages. Its products and services include the United States Postal Service (OTCPK:USPS) -approved PC Postage Service that enables users to print electronic stamps directly onto envelopes, plain paper, or labels using a personal computer, printer, and an Internet connection; and PhotoStamps, a patented form of postage, which allows consumers to turn digital photos, designs, or images into valid United States postage. On 08 May 2012, Northland Securities upgraded the stock from Market Perform to Outperform with target price of $32.

Price 05/30/2012 (Intraday)

25.30

Forward P/E

14.17

PEG

0.96

Price/Book

3.67

Enterprise Value/EBITDA

18.60

Next 5 Years Annual EPS Growth Estimates

18.00%

Total Debt/Equity

0.00%

Dividend Yield

0.00%

Stage Stores Inc. (SSI)

Stage Stores, Inc. Operates department stores and off-price stores in the United States. It operates department stores under the Bealls, Goody's, Palais Royal, Peebles, and Stage names that offer brand name and private label apparel, accessories, cosmetics, and footwear for the family. The company operates off-price stores under Steele's name, which provide brand name family apparel, accessories, shoes, and home decor. It also operates an eCommerce website. The company focuses on consumers in small and mid-sized markets.

Price 05/29/2012

16.98

Forward P/E

12.96

PEG

1.14

Price/Book

1.27

Enterprise Value/EBITDA

4.84

Next 5 Years Annual EPS Growth Estimates

15.15%

Total Debt/Equity

12.14%

Dividend Yield

2.12%

Source: The Best Stocks In The Past 12 Months And The Possible Next Winners