When seeking stocks for your portfolio, it makes sense to look for growing companies, and rapid growers understandably can be particularly enticing.
Below are a handful of companies with impressive revenue growth rates over the past three years. Why look at revenue growth? Well, while it’s true that the bottom-line profit might be most critical, it’s hard to grow your bottom line unless your top line is growing at a good clip.
|Company||3-Year Annualized Revenue Growth|
|Brookfield Infrastructure Partners (NYSE:BIP)
|Heckmann Corporation (NYSE:HEK)||92%|
|Spectrum Pharmaceuticals (NASDAQ:SPPI)||85%|
|MAKO Surgical Corp. (NASDAQ:MAKO)||48%|
|Mesabi Trust (NYSE:MSB)||38%|
Let’s take a quick look at each of these, so that you can get an idea of how interesting they are to you and whether you’d like to dig deeper into any of them.
Brookfield Infrastructure, recently yielding 4%, owns many valuable, and productive, assets such as coal terminals, railroads, dozens of port terminals, thousands of miles of natural gas transmission lines, thousands of miles of electricity transmission lines, hundreds of thousands of acres of timberlands, and much more. It operates toll roads and a coal terminal. It’s clearly rather diversified, operationally and geographically — for example, supplying some 98% of Chile’s electricity and being the sole provider of railroad services in Southwestern Western Australia. It’s also a defensive company, as many of its offerings, such as electricity, are not optional. It’s not perfect, but it has a lot to recommend it. The stock has averaged annual growth of 20% over the past five years.
Heckmann is a wastewater treatment and disposal specialist, and has been growing briskly in part due to its work serving the controversial fracking industry and its presence in just about every shale field. (The process of fracking consumes a lot of water, which must be supplied and treated.) Heckmann recently bought the Power Fuels company, expanding its energy services to include more liquid work instead of mainly gas. Heckmann has been unprofitable, but it has been turning that around. The stock has actually mostly fallen in recent years — that’s enough to keep some away, but it makes others wonder whether it’s attractively priced now. Its recent forward P/E of 35 coupled with a 25% estimated five-year growth rate suggest that it might not be quite a screaming buy.
Spectrum Pharmaceuticals is enjoying the success of its colorectal cancer drug, Fusilev — but that success has been partly due to a supply shortage faced by competition. Still, not every biotech company has products actually approved and selling in the market. And on top of that, Spectrum has more than a dozen other drugs in development in its pipeline, and has broadened its scope with the recent purchase of Allos Therapeutics, Inc. (NASDAQ:ALTH), which brought with it a lymphoma drug, Folotyn. The Allos buy is expected to deliver cost savings, too. Spectrum also recently secured rights for the bladder-cancer drug apaziquone and announced a special dividend. Some see the company as attractively valued as well as a possible acquisition target. For example, Spectrum’s share count has risen significantly, though the company plans to buy back shares, offsetting some of that.