The stocks covered in this article are three mid cap stocks with high earnings and revenue growth. On average, these three companies have market caps of $2.8B; earnings and revenue growth rates of 77% and 84% respectively.
EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. EPS growth rates help investors identify stocks that are increasing or decreasing in profitability. This profitability metric is generally a key driver in the price of the stock as it directly correlates to the profitability of the company as a whole. The one used for this analysis is the EPS growth of the projected current year vs. last year.
Revenue growth measures how much more (or less) the company has sold during a specified time period compared with another period. The one used for this analysis is the trailing 12 months' vs. the prior 12 months' revenues. When looking at a company's financials, it is not enough to just look at the revenue for the current period. An investor wants to see how the company grows or improves over time and will give a much better idea of how well a company is doing.
Companies with high earnings and revenue growth rates tend to make good investments as they tend to perform better than the overall market.
1. CUBIST PHARMACEUTICALS INC (CBST)
This company has a P/E of 27.45, EPS Growth Rate of 139%, and a Revenue Growth Rate of 29%. Cubist Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the research, development, and commercialization of pharmaceutical products that address unmet medical needs in the acute care environment. The company markets CUBICIN (daptomycin for injection), a once-daily, bactericidal, and intravenous antibiotic with activity against gram-positive organisms, including methicillin-resistant staphylococcus aureus; and ENTEREG, an alvimopan for acceleration of upper and lower gastrointestinal recovery. It also co-promotes DIFICIDTM used for the treatment of clostridium difficile-associated diarrhea in the United States. Technically, it has had a great run since bouncing off the lows on 6/28/12, from below 37 to over 44. It has been pulling back from the high. I would wait for further pullback to enter this trade.
2. JAZZ PHARMACEUTICALS PLC (NASDAQ:JAZZ)
This company has a P/E of 20.38, EPS Growth Rate of 35%, and a Revenue Growth Rate of 86%. Jazz Pharmaceuticals Public Limited Company, a specialty biopharmaceutical company, focuses on the identification, development, and commercialization of pharmaceutical products to meet unmet medical needs. Its marketed products include Xyrem, a sodium oxybate oral solution for the treatment of cataplexy and excessive daytime sleepiness in patients with narcolepsy; FazaClo (clozapine, USP) LD and FazaClo HD products, which are orally disintegrating clozapine tablets for the treatment of resistant schizophrenia; Luvox CR extended-release capsules for the treatment of obsessive compulsive disorder; and Prialt, a non-opioid intrathecal analgesic for refractory severe chronic pain. Technically, while the longer term trend is up, the short term is lacking direction. I would wait for things to settle and look to go long if price goes above 51.
3. OASIS PETROLEUM INC (NYSE:OAS)
Oil, Gas & Consumable Fuels
This company has a P/E of 19.55, EPS Growth Rate of 58%, and a Revenue Growth Rate of 137%. Oasis Petroleum Inc., an independent exploration and production company, engages in the acquisition and development of oil and natural gas resources in the Montana and North Dakota regions of the Williston Basin. The company's primary project areas include West Williston, East Nesson, and Sanish. As of December 31, 2011, it had approximately 78.7 million barrels of oil equivalent of estimated net proved reserves. Technically, it has recently broke above the 20 SMA and resistance. I like the entry here.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in OAS over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.