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Philip van Doorn

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Aug. 28, 2017, 9:56 a.m. EDT

These rapidly growing companies’ shares may rise as much as 74% in the next year

Favored names include six oil stocks as well as Micron Technology, Western Digital and United Continental

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By Philip van Doorn, MarketWatch


Bloomberg News
Analysts expect shares of Alaska Air Group to rise 40% over the next 12 months.

Some investors and analysts say the U.S. stock market rally has exhausted itself.

But among large-cap companies generating sales at a fast clip, many may post share-price increases of at least 25% over the next year, according to analysts’ projections.

With another earnings season just about completed, the bulls are still roaring, as second-quarter profits for S&P 500 /zigman2/quotes/210599714/realtime SPX -0.39%  companies are up 11% from a year earlier, per S&P Global Market Intelligence. That performance has been led by a three-fold increase in earnings by energy companies benefiting from higher oil prices. The technology sector has also been a big driver, rising 21%.

Any company’s earnings results can be skewed by accounting adjustments and one-time items. So we thought it would provide food for thought for stock pickers to look at companies that had significantly increased their sales per share, while also being rated highly by analysts. We focused on sales per share, rather than raw revenue numbers, because the per-share numbers account for any dilution from the issuance of shares for any reason (including stock-based compensation packages for executives), while also reflecting any declines in share counts from stock buybacks.

Also see: This could be the perfect time to buy shares of Exxon Mobil and Chevron

First, we identified the 169 companies in the S&P 500 that had increased sales per share by at least 10% in the past year from the prior 12-month period. We then narrowed the list to the 15 stocks with majority “buy” ratings that are expected to rise by at least 25% over the next 12 months.

Here they are, ranked their percentage of “buy” ratings among analysts polled by FactSet:

Company Ticker Sales per share - past 12 months Sales per share - year-earlier 12-month period Increase in sales per share Share ‘buy’ ratings Share neutral ratings Share ‘sell’ ratings
Envison Healthcare Corp. $66.13 $52.65 26% 94% 6% 0%
Pioneer Natural Resources Co. /zigman2/quotes/206736173/composite PXD $28.75 $21.35 35% 90% 10% 0%
Quanta Services Inc. /zigman2/quotes/203420082/composite PWR $54.87 $43.89 25% 88% 12% 0%
Alaska Air Group Inc. /zigman2/quotes/200972303/composite ALK $55.90 $45.47 23% 86% 14% 0%
Micron Technology Inc. /zigman2/quotes/205710729/composite MU $15.48 $11.92 30% 84% 16% 0%
Western Digital Corp. /zigman2/quotes/204213617/composite WDC $64.80 $53.98 20% 80% 20% 0%
Range Resources Corp. /zigman2/quotes/205059849/composite RRC $8.78 $6.43 37% 77% 20% 3%
Concho Resources Inc. /zigman2/quotes/208942254/composite CXO $14.77 $12.14 22% 77% 23% 0%
Anadarko Petroleum Corp. $22.90 $15.50 48% 73% 24% 3%
Mylan N.V. /zigman2/quotes/209413137/composite MYL $22.54 $19.52 16% 73% 27% 0%
Noble Energy Inc. /zigman2/quotes/210375673/composite NBL $8.77 $7.28 20% 71% 29% 0%
Nucor Corp. /zigman2/quotes/201889722/composite NUE $56.86 $48.87 16% 71% 29% 0%
Martin Marietta Materials Inc. /zigman2/quotes/208827848/composite MLM $62.44 $56.56 10% 69% 31% 0%
Cimarex Energy Co. /zigman2/quotes/205517948/composite XEC $17.45 $12.98 34% 62% 35% 3%
United Continental Holdings Col /zigman2/quotes/205037281/composite UAL $118.79 $103.50 15% 58% 42% 0%
Source: FactSet

You can click on the tickers for more information about each company, including news, financials, charts and filings.

Here’s each stock’s implied 12-month upside potential, based on consensus price targets of analysts polled by FactSet. Forward price-to-earnings ratios are also shown:

Company Ticker Closing price - Aug. 22 Consensus price target Implied 12-month upside potential Consensus 2018 EPS estimate Price/ consensus 2018 EPS estimate
Envison Healthcare Corp. $51.41 $70.60 37% $3.85 13.4
Pioneer Natural Resources Co. /zigman2/quotes/206736173/composite PXD $128.06 $194.56 52% $2.51 50.9
Quanta Services Inc. /zigman2/quotes/203420082/composite PWR $34.30 $43.10 26% $2.46 14.0
Alaska Air Group Inc. /zigman2/quotes/200972303/composite ALK $77.11 $107.62 40% $8.42 9.2
Micron Technology Inc. /zigman2/quotes/205710729/composite MU $30.45 $43.28 42% $6.02 5.1
Western Digital Corp. /zigman2/quotes/204213617/composite WDC $86.65 $116.13 34% $12.50 6.9
Range Resources Corp. /zigman2/quotes/205059849/composite RRC $17.96 $31.27 74% $0.66 27.2
Concho Resources Inc. /zigman2/quotes/208942254/composite CXO $109.42 $148.60 36% $1.76 62.0
Anadarko Petroleum Corp. $42.27 $61.48 45% -$0.67 N/A
Mylan N.V. /zigman2/quotes/209413137/composite MYL $30.73 $40.50 32% $5.21 5.9
Noble Energy Inc. /zigman2/quotes/210375673/composite NBL $23.49 $36.90 45% $0.09 259.8
Nucor Corp. /zigman2/quotes/201889722/composite NUE $54.65 $69.05 26% $4.59 11.9
Martin Marietta Materials Inc. /zigman2/quotes/208827848/composite MLM $200.82 $250.75 25% $10.25 19.6
Cimarex Energy Co. /zigman2/quotes/205517948/composite XEC $99.21 $128.25 29% $5.09 19.5
United Continental Holdings Inc. /zigman2/quotes/205037281/composite UAL $64.70 $89.72 39% $8.71 7.4
Source: FactSet

For a comparison of price-to-earnings ratios, the entire S&P 500 trades for 16.9 times weighted consensus 2018 earnings estimates, according to FactSet. As you can see from the very high ratios for the oil companies, analysts do not always hang their hats on P/E measures. Oil companies are counting on a sustained long-term rise in oil prices to drive further gains in sales and, eventually, big increases in profits.

But if you look at the P/E ratios for United Continental Holdings Inc. /zigman2/quotes/205037281/composite UAL +0.70%  and Alaska Air Group Inc. /zigman2/quotes/200972303/composite ALK -0.21% , it’s obvious that many investors with long memories of industry disruption still don’t trust airlines, despite many years of strong sales growth.

/zigman2/quotes/210599714/realtime
US : S&P US
2,986.20
-11.75 -0.39%
Volume: 1.99B
Oct. 18, 2019 5:08p
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/zigman2/quotes/206736173/composite
US : U.S.: NYSE
$ 123.36
-4.34 -3.40%
Volume: 1.70M
Oct. 18, 2019 6:30p
P/E Ratio
23.16
Dividend Yield
1.43%
Market Cap
$20.62 billion
Rev. per Employee
$2.95M
loading...
/zigman2/quotes/203420082/composite
US : U.S.: NYSE
$ 40.22
+0.92 +2.34%
Volume: 2.19M
Oct. 18, 2019 6:30p
P/E Ratio
18.32
Dividend Yield
0.40%
Market Cap
$5.72 billion
Rev. per Employee
$284,985
loading...
/zigman2/quotes/200972303/composite
US : U.S.: NYSE
$ 66.84
-0.14 -0.21%
Volume: 969,715
Oct. 18, 2019 6:30p
P/E Ratio
16.39
Dividend Yield
2.09%
Market Cap
$8.24 billion
Rev. per Employee
$353,525
loading...
/zigman2/quotes/205710729/composite
US : U.S.: Nasdaq
$ 43.47
-2.03 -4.46%
Volume: 26.22M
Oct. 18, 2019 4:00p
P/E Ratio
7.97
Dividend Yield
N/A
Market Cap
$47.98 billion
Rev. per Employee
$832,917
loading...
/zigman2/quotes/204213617/composite
US : U.S.: Nasdaq
$ 58.13
-1.49 -2.50%
Volume: 3.32M
Oct. 18, 2019 4:00p
P/E Ratio
N/A
Dividend Yield
3.44%
Market Cap
$17.28 billion
Rev. per Employee
$270,824
loading...
/zigman2/quotes/205059849/composite
US : U.S.: NYSE
$ 3.68
-0.12 -3.16%
Volume: 8.91M
Oct. 18, 2019 6:30p
P/E Ratio
N/A
Dividend Yield
2.17%
Market Cap
$925.04 million
Rev. per Employee
$4.19M
loading...
/zigman2/quotes/208942254/composite
US : U.S.: NYSE
$ 62.45
-0.69 -1.09%
Volume: 1.86M
Oct. 18, 2019 6:30p
P/E Ratio
24.70
Dividend Yield
0.80%
Market Cap
$12.56 billion
Rev. per Employee
$2.76M
loading...
/zigman2/quotes/209413137/composite
US : U.S.: Nasdaq
$ 18.33
-0.55 -2.91%
Volume: 6.17M
Oct. 18, 2019 4:00p
P/E Ratio
305.50
Dividend Yield
N/A
Market Cap
$9.46 billion
Rev. per Employee
$326,506
loading...
/zigman2/quotes/210375673/composite
US : U.S.: NYSE
$ 19.06
-0.55 -2.80%
Volume: 7.45M
Oct. 18, 2019 6:30p
P/E Ratio
N/A
Dividend Yield
2.52%
Market Cap
$9.12 billion
Rev. per Employee
$1.91M
loading...
/zigman2/quotes/201889722/composite
US : U.S.: NYSE
$ 51.68
-0.07 -0.14%
Volume: 1.53M
Oct. 18, 2019 6:30p
P/E Ratio
7.29
Dividend Yield
3.10%
Market Cap
$15.67 billion
Rev. per Employee
$953,128
loading...
/zigman2/quotes/208827848/composite
US : U.S.: NYSE
$ 265.78
-1.24 -0.46%
Volume: 488,369
Oct. 18, 2019 6:30p
P/E Ratio
33.05
Dividend Yield
0.83%
Market Cap
$16.60 billion
Rev. per Employee
$487,063
loading...
/zigman2/quotes/205517948/composite
US : U.S.: NYSE
$ 41.33
-1.36 -3.19%
Volume: 1.57M
Oct. 18, 2019 6:30p
P/E Ratio
6.66
Dividend Yield
1.94%
Market Cap
$4.19 billion
Rev. per Employee
$2.45M
loading...
/zigman2/quotes/205037281/composite
US : U.S.: Nasdaq
$ 90.09
+0.63 +0.70%
Volume: 2.72M
Oct. 18, 2019 4:00p
P/E Ratio
8.34
Dividend Yield
N/A
Market Cap
$23.14 billion
Rev. per Employee
$448,946
loading...
/zigman2/quotes/206736173/composite
US : U.S.: NYSE
$ 123.36
-4.34 -3.40%
Volume: 1.70M
Oct. 18, 2019 6:30p
P/E Ratio
23.16
Dividend Yield
1.43%
Market Cap
$20.62 billion
Rev. per Employee
$2.95M
loading...
/zigman2/quotes/203420082/composite
US : U.S.: NYSE
$ 40.22
+0.92 +2.34%
Volume: 2.19M
Oct. 18, 2019 6:30p
P/E Ratio
18.32
Dividend Yield
0.40%
Market Cap
$5.72 billion
Rev. per Employee
$284,985
loading...
/zigman2/quotes/200972303/composite
US : U.S.: NYSE
$ 66.84
-0.14 -0.21%
Volume: 969,715
Oct. 18, 2019 6:30p
P/E Ratio
16.39
Dividend Yield
2.09%
Market Cap
$8.24 billion
Rev. per Employee
$353,525
loading...
/zigman2/quotes/205710729/composite
US : U.S.: Nasdaq
$ 43.47
-2.03 -4.46%
Volume: 26.22M
Oct. 18, 2019 4:00p
P/E Ratio
7.97
Dividend Yield
N/A
Market Cap
$47.98 billion
Rev. per Employee
$832,917
loading...
/zigman2/quotes/204213617/composite
US : U.S.: Nasdaq
$ 58.13
-1.49 -2.50%
Volume: 3.32M
Oct. 18, 2019 4:00p
P/E Ratio
N/A
Dividend Yield
3.44%
Market Cap
$17.28 billion
Rev. per Employee
$270,824
loading...
/zigman2/quotes/205059849/composite
US : U.S.: NYSE
$ 3.68
-0.12 -3.16%
Volume: 8.91M
Oct. 18, 2019 6:30p
P/E Ratio
N/A
Dividend Yield
2.17%
Market Cap
$925.04 million
Rev. per Employee
$4.19M
loading...
/zigman2/quotes/208942254/composite
US : U.S.: NYSE
$ 62.45
-0.69 -1.09%
Volume: 1.86M
Oct. 18, 2019 6:30p
P/E Ratio
24.70
Dividend Yield
0.80%
Market Cap
$12.56 billion
Rev. per Employee
$2.76M
loading...
/zigman2/quotes/209413137/composite
US : U.S.: Nasdaq
$ 18.33
-0.55 -2.91%
Volume: 6.17M
Oct. 18, 2019 4:00p
P/E Ratio
305.50
Dividend Yield
N/A
Market Cap
$9.46 billion
Rev. per Employee
$326,506
loading...
/zigman2/quotes/210375673/composite
US : U.S.: NYSE
$ 19.06
-0.55 -2.80%
Volume: 7.45M
Oct. 18, 2019 6:30p
P/E Ratio
N/A
Dividend Yield
2.52%
Market Cap
$9.12 billion
Rev. per Employee
$1.91M
loading...
/zigman2/quotes/201889722/composite
US : U.S.: NYSE
$ 51.68
-0.07 -0.14%
Volume: 1.53M
Oct. 18, 2019 6:30p
P/E Ratio
7.29
Dividend Yield
3.10%
Market Cap
$15.67 billion
Rev. per Employee
$953,128
loading...
/zigman2/quotes/208827848/composite
US : U.S.: NYSE
$ 265.78
-1.24 -0.46%
Volume: 488,369
Oct. 18, 2019 6:30p
P/E Ratio
33.05
Dividend Yield
0.83%
Market Cap
$16.60 billion
Rev. per Employee
$487,063
loading...
/zigman2/quotes/205517948/composite
US : U.S.: NYSE
$ 41.33
-1.36 -3.19%
Volume: 1.57M
Oct. 18, 2019 6:30p
P/E Ratio
6.66
Dividend Yield
1.94%
Market Cap
$4.19 billion
Rev. per Employee
$2.45M
loading...
/zigman2/quotes/205037281/composite
US : U.S.: Nasdaq
$ 90.09
+0.63 +0.70%
Volume: 2.72M
Oct. 18, 2019 4:00p
P/E Ratio
8.34
Dividend Yield
N/A
Market Cap
$23.14 billion
Rev. per Employee
$448,946
loading...
/zigman2/quotes/205037281/composite
US : U.S.: Nasdaq
$ 90.09
+0.63 +0.70%
Volume: 2.72M
Oct. 18, 2019 4:00p
P/E Ratio
8.34
Dividend Yield
N/A
Market Cap
$23.14 billion
Rev. per Employee
$448,946
loading...
/zigman2/quotes/200972303/composite
US : U.S.: NYSE
$ 66.84
-0.14 -0.21%
Volume: 969,715
Oct. 18, 2019 6:30p
P/E Ratio
16.39
Dividend Yield
2.09%
Market Cap
$8.24 billion
Rev. per Employee
$353,525
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Philip van Doorn covers various investment and industry topics. He has previously worked as a senior analyst at TheStreet.com. He also has experience in community banking and as a credit analyst at the Federal Home Loan Bank of New York.

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