5 Companies Posting Strong Sales Amid a Tough Top-Line Climate

Oct. 27, 2010 1:02 PM ETNEOG, CHSI, BB, INFY, TPR
John P. Reese profile picture
John P. Reese
2.07K Followers

While many companies are continuing to post strong third-quarter earnings numbers, much of the earnings season talk has centered on concerns about the "top line" -- that is, revenue growth. The consensus seems to be that while corporations have done a great job of cutting costs and squeezing every dollar out of every sale, demand for their products hasn't picked up as much as investors would like.

Generally that may be true -- but it doesn't mean there aren't plenty of exceptions. Whether because of conditions within their specific industries, an ability to tap into areas of the world that do have strong demand, or a good ol' fashioned ability to market and sell their products, a number of firms have been producing very good top-line growth in a challenging climate.

With that in mind, I thought I'd see which companies that have been riding impressive sales waves also get approval from my Guru Strategies, fundamental-based approaches that are each based on the strategy of a different investing great. Here are some of the best of the bunch.

Neogen Corporation (NEOG): Neogen makes a variety of products involved in food and animal safety, such as rapid diagnostic test kits to detect foodborne bacteria and other harmful substances, and veterinary instruments, pharmaceuticals, and nutritional supplements for animals.

The $782-million-market-cap Michigan-based firm has been growing revenues at a 17.7% clip over the long term. (I use an average of the three-, four-, and five-year growth rates to determine long-term growth rates for both sales and earnings.) Demand has really increased more recently -- sales grew at a 34% clip in the most recent quarter, and a 26% pace in the quarter before that (vs. the respective year-ago quarters).

Neogen's strong sales growth is one reason it gets high marks from the strategy

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John P. Reese profile picture
2.07K Followers
John P. Reese is considered an expert in the systematic investing strategies of legendary investors, including Peter Lynch, Ben Graham, Warren Buffett and others. He has been active in the development of fundamentally-based quantitative models since the mid-90s. His research on Seeking Alpha will include stock ideas, strategy and value investing pieces, behavioral finance concepts, systematic and modeling methods as well as other long term investing concepts. John is founder and CEO of Validea.com and also co-founder of Validea Capital Management. Validea Capital runs an actively managed ETF that utilizes the fundamental stock selection models of investing legends as well as a set of robo advisor allocations through Validea Legends and Validea Legends Income. John holds two U.S. patents in the area of automated stock analysis and is considered an expert in the field of quantitative stock selection using the strategies of investing legends. John is a columnist for TheStreet.com, Forbes.com and Canada's Globe & Mail and is co-author of “The Guru Investor: How to Beat the Market Using History’s Best Investment Strategies". He holds a master's of business administration from Harvard Business School and a degree in computer science from MIT.A more complete biography can be found here: http://en.wikipedia.org/wiki/John_P._Reese

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