Experienced investors know that risk is part of the equation with any investment. However, there are tactics that can lead to better outcomes than others. Some investors choose stocks at the mid cap level because they are more established than smaller companies and tend to be less volatile. Another way to align with companies that are well positioned for steady growth is to find those with high profits and projected to expand. For your review, we developed a list of mid cap stocks with impressive profits and have EPS growth projections above 25% in the next five years. We think you will find our list worthy of further research.
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.
Return on Assets [ROA] illustrates how much a company is generating in earnings from its assets alone. This metric gives investors a picture of how profitable the company is relative to the assets in current possession. As well, it lets investors see how efficient and effective management is at generating earnings from the company's assets. While most management teams can probably make money by throwing money at an issue very few can make very large profits with little investment.
EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. The 5-Year Expected EPS Growth Rate is a long term annual growth estimate, where the growth projections are made by analysts, the company or other credible sources.
We first looked for mid cap stocks. We then looked for businesses that have strong profitability (1-year fiscal EPS Growth Rate>10%)(ROA > 10%). We then looked for businesses that have high future earnings per share growth forecasts(5-year projected EPS Growth Rate>25%). We did not screen out any sectors.
Do you think these mid-cap stocks are at too low of valuations, given their fundamentals? Use our screened list as a starting point for your own analysis.
1) Ulta Salon, Cosmetics & Fragrance, Inc. (ULTA)
|Earnings Per Share Growth Rate||63.85%|
|Return on Assets||14.46%|
|5-Year Projected Earnings Per Share Growth Rate||25.14%|
Ulta Salon, Cosmetics & Fragrance, Inc. operates as a beauty retailer that provides prestige, mass, and salon products; and salon services in the United States. The company offers cosmetics, including products for the face, eyes, cheeks, lips, and nails; haircare products comprising shampoos, conditioners, styling products, and hair accessories; salon styling tools, such as hair dryers, curling irons, and flat irons; skincare, and bath and body products consisting of products for the face, hands, and body; and fragrances for men and women. It also provides private label products that comprise Ulta branded cosmetics, skincare, bath and body products, and haircare products; and other products, which include candles, home fragrance products, and other health and beauty products. The company operates 467 stores in 44 states. It also operates full services salons in its stores. The company was founded in 1990 and is based in Bolingbrook, Illinois.
2) Green Mountain Coffee Roasters Inc. (GMCR)
|Industry||Processed & Packaged Goods|
|Earnings Per Share Growth Rate||127.33%|
|Return on Assets||11.18%|
|5-Year Projected Earnings Per Share Growth Rate||28.73%|
Green Mountain Coffee Roasters, Inc. engages in the specialty coffee and coffee maker business. The company sources, produces, and sells approximately 200 varieties of coffee, cocoa, teas, and other beverages in K-Cup portion packs and coffee in traditional packaging, including whole bean and ground coffee selections in bags and ground coffee in fractional packs for use in at-home and away-from-home (AFH). It sells its products primarily in North America through supermarkets, club stores, and convenience stores; in restaurants and hospitality; and to office coffee distributors, as well as directly to consumers through its Website.
The company also manufactures gourmet single-cup brewing systems and brewing equipment. In addition, it sells AH single-cup brewers; accessories; and coffee, tea, hot cocoa, and other beverages in K-Cup portion packs, as well as offers other licensed roasters to retailers, department stores, and mass merchandisers. Further, the company sells AFH single-cup brewers to distributors for use in offices. It provides its products under the Van Houtte, Brlerie St. Denis, Brlerie Mont-Royal, and Orient Express brands, as well as licensed Bigelow and Wolfgang Puck brands. The company was founded in 1981 and is based in Waterbury, Vermont.
3) Oil States International Inc. (OIS)
|Industry||Oil & Gas Equipment & Services|
|Earnings Per Share Growth Rate||83.87%|
|Return on Assets||11.66%|
|5-Year Projected Earnings Per Share Growth Rate||38.80%|
Oil States International, Inc., through its subsidiaries, provides specialty products and services to the oil and gas drilling and production companies worldwide. It operates in four segments: Accommodations, Offshore Products, Well Site Services, and Tubular Services. The Accommodations segment offers temporary and permanent work force accommodation services for people working in remote locations. The Offshore Products segment designs and manufactures flexible bearings and connector products; sub sea pipeline products; marine winches, mooring systems, and cranes and rig equipment; and conductor casing connections and pipes, as well as provides blowout preventer stack assembly, integration, testing, and repair services; and drilling riser and related repair services.
The Well Site Services segment offers a range of products and services that are used to drill for, and establish and maintain the flow of oil and gas from a well throughout its lifecycle. This segment engages in the rental of wireline and coiled tubing pressure control equipment; wellhead isolation equipment; pipe recovery systems; thru-tubing fishing services; hydraulic chokes and manifolds; blow out preventers; well testing and flowback equipment; gravel pack operations on well bores; and surface control equipment and down-hole tools utilized by coiled tubing operators. This segment also provides land drilling services. The Tubular Services segment distributes a range of casing and tubing products; and offers threading, logistical, and inventory management services. The company serves national oil companies, independent oil and gas companies, onshore and offshore drilling companies, and other oilfield service and mining companies. Oil States International, Inc. was founded in 1995 and is based in Houston, Texas.
4) Yandex N.V. (YNDX)
|Industry||Internet Information Providers|
|Earnings Per Share Growth Rate||42.22%|
|Return on Assets||21.64%|
|5-Year Projected Earnings Per Share Growth Rate||35.48%|
Yandex N.V., an Internet and technology company, operates an Internet search engine in Russia and internationally. It offers access to a range of information available online; localized homepages for specific geographic markets; and personalized and email services. The company also provides specialized search services comprising news aggregation and information services; and price comparison services, such as product information, price comparisons, and consumer-generated reviews of products and online retailers, as well as other specialized search services, including search services for images, videos, music, theatres, televisions, weather, jobs, transportation, cars, and real estate. In addition, it offers desktop applications consisting of specialized toolbar for Web browsers, Russian-to-English and English-to-Russian keyboard layout switcher, and customized browser versions; and server applications for indexing and searching files in various formats.
Further, the company provides text-based advertising and display advertising services for advertisers on its Websites and Yandex ad network member Websites; and Yandex.Market, a price comparison service, which offers a platform for retailers to reach consumers in a targeted manner. Additionally, it provides services and tools for businesses comprising Yandex.Webmaster that allows Webmasters to control how their Website is seen by its search engine; Yandex.Metrica, a Web statistics analysis tool; Yandex Site Search, a search tool for Webmasters and Website owners; Yandex.Mail for Domain Owners that allows users to create email accounts with their own domain names; Yandex APIs and Widgets that enable developers to use its technologies in their own businesses; and Yandex.Money, an online payment system. Yandex N.V. was incorporated in 2004 and is based in The Hague, the Netherlands.
*Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz on 09/03/2012.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.