It’s easy to be skeptical about volatile stock movements. When a stock sees sudden growth, it’s a risky bet, because it could just as easily fall in the future. To avoid taking that kind of risk, it is better to pick stocks with steady growth.
Here are three stocks which have grown steadily. Out of these three, two companies – Avon Products, Inc. (NYSE:AVP) and Cheniere Energy, Inc. (NYSEMKT:LNG) have gained more than 40% this year. The third, Microchip Technology Inc. (NASDAQ:MCHP) is no slouch. It’s grown by 14% this year.
Source: Yahoo Finance
But do these companies provide good investment opportunities?
Sales representatives: key driver for revenue growth
Avon Products, Inc. (NYSE:AVP)’s generates maximum revenue by direct selling through its sales representatives. It reported a total headcount of 6.3 billion sales representatives and total revenue of $10.5 billion in 2012. The total sales growth of the company depends on the growth of its number of representatives. These representatives buy Avon Products, Inc. (NYSE:AVP)’s products at a discounted price, and sell them at the printed price. The idea is to contact customers directly, through sales campaign, and brochure that contains products list. The company’s website has become another platform for direct sales. The customers can choose their representatives name from the list available on the website, and the representative will get a credit for sales made. This brings customers closer, and the representatives serve as a ‘store’ for Avon Products, Inc. (NYSE:AVP)’s products.
To increase the sales representative base, Avon Products, Inc. (NYSE:AVP) has introduced a new development program called Representative Value Proposition. This program focuses on discount structures, higher incentives, strategies to increase sales and e-business instruments that help increase representative’s earnings. With this initiative, the total revenue of the company expected for this year is up to $10.62 billion and $10.95 billion for next year.
Avon Products, Inc. (NYSE:AVP) is planning to shift its focus to the high revenue-generating market of North America. In order to execute this plan, it exited from under-performing markets and slashed approximately 1,500 jobs in 2012, and plans to cut more than 400 jobs in this year. This initiative will generate $400 million of savings. As the plan currently accounts for only 20% of the goal, the company will announce such measures over the next three years. Revenue from North America was reported at $406 million in the first quarter and $498 million is expected in the fourth quarter of this year.
World’s first bi-directional LNG terminal
Cheniere Energy, Inc. (NYSEMKT:LNG)’s Sabine Pass Liquified Natural Gas (LNG) terminal in Louisiana is the first LNG project to get approval from the U.S. government to export LNG to non-FTA countries. Non-FTA countries are those countries that do not have a Free Trade Agreement with the U.S. Getting a non-FTA permit is a strategic advantage to Cheniere Energy, Inc. (NYSEMKT:LNG), because there’s only one big gas-importing country –South Korea, with a FTA agreement with the U.S.