High-growth companies can make investors a lot of money when they buy in at the “right” time, but picking a high-growth company is not so easy. How do you know a company is going to grow significantly, or continue to grow? The easy answer is that you don’t. But, there are certain parameters that can help identify which fast-growing companies are a good investment – specifically, you want to look for companies that have little debt, strong earnings growth and low P/E ratios.Using the stock screener at finviz.com, we came up with this list of five stocks. Each of these companies have market caps over $2 billion, a debt to equity ratio under 0.30, P/E ratios under 15, and estimated EPS growth over 25%.
Atmel Corp. (ATML) is a broad line semiconductor company with a $3.94 billion market cap. The company is currently priced at 12.91 times its forward earnings. ATML has a forecasted EPS growth of 27.43% per annum over the next five years. It has a debt to equity ratio of 0.00 and recently traded at $8.52 a share. ATML has a one year target estimate of $12.79, although some analysts predict it will reach $18 a share. On November 2, research firm Needham rated the stock as a buy. Philippe Laffont’s Coatue Management is a fan of ATML.
Baker Hughes, Inc. (BHI) is an oil and gas equipment and services company with a $20.96 billion market cap. The company is currently priced at 8.70 times its forward earnings. BHI has a forecasted EPS growth of 27.88% per annum over the next five years. It has a debt to equity ratio of 0.25 and recently traded at $48.02 a share. Analysts estimate the stock could go as high as $100 a share in the next year. Jason Capello’s Merchants’ Gate Capital likes BHI.
Harman International Industries, Inc. (HAR) is an electronic equipment company with a $2.83 billion market cap. The company is currently priced at 10.69 times its forward earnings. HAR has a forecasted EPS growth of 31.00% per annum over the next five years. It has a debt to equity ratio of 0.27 and recently traded at $40.39 a share. Some analysts think the stock will rise to $62 a share within the next year. HAR is a top pick for Cliff Asness’ Aqr Capital Management.
HollyFrontier Corp. (HFC) is an oil and gas refining and marketing company with a $5.71 billion market cap. The company is currently priced at 6.61 times its forward earnings. HFC has a forecasted EPS growth of 29.52% per annum over the next five years. It has a debt to equity ratio of 0.24 and recently traded at $27.31 a share. Analysts have given HFC a one-year target estimate as high as $40 a share. Two research firms issued recommendations for the company during the fourth quarter. Howard Weil upgraded its opinion of the company from market perform to market outperform on October 14, while Global Hunter Securities initiated a new buy opinion on November 1.
Molycorp, Inc. (MCP) is an industrial metals and minerals company with a $2.41 billion market cap. The company is currently priced at 9.93 times its forward earnings. MCP has a forecasted EPS growth of 27.50% per annum over the next five years. It has a debt to equity ratio of 0.23 and recently traded at $28.69 a share. MCP has a mean one year target estimate of $61.50 a share, but some analysts predict that MCP could go as high as $90 a share in the next year. John Thaler’s Jat Capital Management is a fan of MCP.
