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3 Cheap Growth Stocks Ready to Beat Earnings Expectations
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Finding companies with the criteria you want isn’t always easy. You could spend hours searching ticker after ticker, only to find companies which aren’t worthy of your hard earned cash. An easier way to navigate through this is by using high quality stock screeners. Screening helps investors narrow down companies to invest in based on their ability to meet every criteria selected. Any company who misses even one of the criteria requirements will be filtered out.
This lets one easily choose ideal metrics. Screens are effective because they sift out bad stocks and only keep the cream of the crop in. It isn’t always easy to create an effective screen. Our Zacks Premium Screens have helped with this, bringing profits to many investors over time. Our predefined criteria are chosen carefully to capture special kinds of companies.
Today, we’ve dug up three cheap growth stocks using one of our premium screens known as “EPS Growth, Revisions, & Positive Surprises”. Some of the metrics of this screen is that the stock must have an average trading volume of at least 100,000 shares over the last 20 days, a positive EPS surprise last quarter, and positive EPS growth last year. In addition to using the metrics on this great screen, I’ve added an additional metric which I feel is appropriate for investing in these stocks
I screened for stocks with a PEG under one. This will allow us to find companies that may be undervalued relative to their expected earnings growth over the next three to five years. Let’s see what our modified premium screen has found for us today.
BG Staffing provides temporary staffing services across an array of different industries. Their temp workers perform front office and maintenance personnel across 18 states. The company also offers skilled contract labor for Finance & Accounting as well as IT implementation and maintenance projects nationwide. BGSF stock is a Zacks Rank #1 (Strong Buy) and it offers investors a 4.74% dividend.
BG has high growth expectations, and it has a great history of growing sales. Since 2012, revenues have increased by 183%. The company continues to grow, and sales are forecasted to grow by 19.43%. BGSF is expected to boost its bottom line significantly as well, as earnings are projected to increase by 123.29% this year.
The other great thing about BG Staffing is its value appeal. The stock is currently trading at a forward price-to-sales (P/S) of 0.70. When a company’s P/S is less than one, it may be undervalued. The company’s PEG is also attractive at just 0.65, and this boosts the argument for why this is a cheap growth stock. The company beat our EPS expectations last quarter by 242.86%, and the Strong Buy rank suggests that BGSF is ready to surprise once again when it reports its quarterly earnings in early August.
Silicon Motion manufactures and markets universally compatible and low-power semiconductor solutions for the multimedia consumer electronics market. The Company’s clients include original equipment manufacturers and design manufacturers. SIMO stock is a Zacks Rank #1 (Strong Buy) and it has gained 20.6% in share value over the last four weeks.
Silicon Motion’s net margins are pretty high at 18.29%. It should be noted that this exceeds the industry’s average trailing twelve month net margin of 1.44% significantly. The company’s earnings and sales for this year are projected to grow by 41.21% and 42.3% respectively. Over the last year, Silicon’s net income has grown by 36.36%, and since 2013, revenues have grown by over 60%.
SIMO has a PEG of 0.95 and it is trading at a reasonable forward PE of 18.95. The company recently topped Q2 earnings and sales expectations, and it looks like it is in a good position to surprise us again this quarter. Over the last 30 days, our EPS consensus has improved, going from $0.62 to $0.74. In the last week, our current year earnings forecast has seen a boost, going from $2.35 to $2.77. The company has beaten our EPS consensus estimate in three of the last four quarters, so it has a good track record for beating our expectations.
Stamps.com-
Stamps.com is a company which provides online services for mailing or shipping letters, packages, or parcels anywhere in the US at any time. Their platform makes it easy for customers to select a carrier, print postage or shipping labels, schedule a pick-up, and track packages. STMP is a Zacks Rank #1 (Strong Buy) and it has a market cap of $1.36 billion.
With a current ratio of 2.38, it is clear to see that Stamps has a good amount of liquidity. The company’s earnings are projected to grow by 37.57% this year, and STMP outpaces the industry’s expected earnings growth of 17.42% by a wide margin. Stamps seeks to grow its top line significantly, with sales forecasted to increase by 50% this year. This is great because Stamps didn’t see the same level of revenues growth last year (45.5%).
Stamps trades at a forward PE and PEG of 16.73 and 0.84 respectively. It trades at a reasonable earnings multiple, and it is not too leveraged by any means, as it has a debt-to-equity ratio of 0.48. Stamps.com has beaten our EPS consensus estimate in each of the last four quarters. Just last quarter, it topped earnings expectations by a whopping 111.59%. Hopefully the company beats expectations once again when it reports its quarterly earnings after the bell tomorrow.
Bottom Line
These stocks look set to perform well with regards to growing their top and bottom line. It is also promising to see that they appear to be priced attractively relative to the growth expected of them over the next three to five years. One magical screening ingredient which can’t be overlooked is the Zacks Rank #1 (Strong Buy). The rank helps to find companies which look like dependable earnings candidates who have a strong chance of beating expectations.
The Zacks Premium Screens gives you access to “EPS Growth, Revisions, & Positive Surprises” and 45 other premium screens designed to give you superior investment returns. They give you a wide range with regards to finding stocks with various combinations of growth, value, earnings, and other metrics.
To use Zacks Premium Screens to find more stock picks based on criteria that’s most important to you— plus, gain access to the Zacks Rank for your stocks, mutual funds and ETFs; Zacks Style Scores, Equity Research Reports; Focus List portfolio of 50-longer-term stocks and more—start your 30-day free trial to Zacks Premium.
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3 Cheap Growth Stocks Ready to Beat Earnings Expectations
Finding companies with the criteria you want isn’t always easy. You could spend hours searching ticker after ticker, only to find companies which aren’t worthy of your hard earned cash. An easier way to navigate through this is by using high quality stock screeners. Screening helps investors narrow down companies to invest in based on their ability to meet every criteria selected. Any company who misses even one of the criteria requirements will be filtered out.
This lets one easily choose ideal metrics. Screens are effective because they sift out bad stocks and only keep the cream of the crop in. It isn’t always easy to create an effective screen. Our Zacks Premium Screens have helped with this, bringing profits to many investors over time. Our predefined criteria are chosen carefully to capture special kinds of companies.
Today, we’ve dug up three cheap growth stocks using one of our premium screens known as “EPS Growth, Revisions, & Positive Surprises”. Some of the metrics of this screen is that the stock must have an average trading volume of at least 100,000 shares over the last 20 days, a positive EPS surprise last quarter, and positive EPS growth last year. In addition to using the metrics on this great screen, I’ve added an additional metric which I feel is appropriate for investing in these stocks
I screened for stocks with a PEG under one. This will allow us to find companies that may be undervalued relative to their expected earnings growth over the next three to five years. Let’s see what our modified premium screen has found for us today.
BG Staffing Inc-(BGSF - Free Report)
BG Staffing provides temporary staffing services across an array of different industries. Their temp workers perform front office and maintenance personnel across 18 states. The company also offers skilled contract labor for Finance & Accounting as well as IT implementation and maintenance projects nationwide. BGSF stock is a Zacks Rank #1 (Strong Buy) and it offers investors a 4.74% dividend.
BG has high growth expectations, and it has a great history of growing sales. Since 2012, revenues have increased by 183%. The company continues to grow, and sales are forecasted to grow by 19.43%. BGSF is expected to boost its bottom line significantly as well, as earnings are projected to increase by 123.29% this year.
The other great thing about BG Staffing is its value appeal. The stock is currently trading at a forward price-to-sales (P/S) of 0.70. When a company’s P/S is less than one, it may be undervalued. The company’s PEG is also attractive at just 0.65, and this boosts the argument for why this is a cheap growth stock. The company beat our EPS expectations last quarter by 242.86%, and the Strong Buy rank suggests that BGSF is ready to surprise once again when it reports its quarterly earnings in early August.
Silicon Motion Technology Corporation-(SIMO - Free Report)
Silicon Motion manufactures and markets universally compatible and low-power semiconductor solutions for the multimedia consumer electronics market. The Company’s clients include original equipment manufacturers and design manufacturers. SIMO stock is a Zacks Rank #1 (Strong Buy) and it has gained 20.6% in share value over the last four weeks.
Silicon Motion’s net margins are pretty high at 18.29%. It should be noted that this exceeds the industry’s average trailing twelve month net margin of 1.44% significantly. The company’s earnings and sales for this year are projected to grow by 41.21% and 42.3% respectively. Over the last year, Silicon’s net income has grown by 36.36%, and since 2013, revenues have grown by over 60%.
SIMO has a PEG of 0.95 and it is trading at a reasonable forward PE of 18.95. The company recently topped Q2 earnings and sales expectations, and it looks like it is in a good position to surprise us again this quarter. Over the last 30 days, our EPS consensus has improved, going from $0.62 to $0.74. In the last week, our current year earnings forecast has seen a boost, going from $2.35 to $2.77. The company has beaten our EPS consensus estimate in three of the last four quarters, so it has a good track record for beating our expectations.
Stamps.com-
Stamps.com is a company which provides online services for mailing or shipping letters, packages, or parcels anywhere in the US at any time. Their platform makes it easy for customers to select a carrier, print postage or shipping labels, schedule a pick-up, and track packages. STMP is a Zacks Rank #1 (Strong Buy) and it has a market cap of $1.36 billion.
With a current ratio of 2.38, it is clear to see that Stamps has a good amount of liquidity. The company’s earnings are projected to grow by 37.57% this year, and STMP outpaces the industry’s expected earnings growth of 17.42% by a wide margin. Stamps seeks to grow its top line significantly, with sales forecasted to increase by 50% this year. This is great because Stamps didn’t see the same level of revenues growth last year (45.5%).
Stamps trades at a forward PE and PEG of 16.73 and 0.84 respectively. It trades at a reasonable earnings multiple, and it is not too leveraged by any means, as it has a debt-to-equity ratio of 0.48. Stamps.com has beaten our EPS consensus estimate in each of the last four quarters. Just last quarter, it topped earnings expectations by a whopping 111.59%. Hopefully the company beats expectations once again when it reports its quarterly earnings after the bell tomorrow.
Bottom Line
These stocks look set to perform well with regards to growing their top and bottom line. It is also promising to see that they appear to be priced attractively relative to the growth expected of them over the next three to five years. One magical screening ingredient which can’t be overlooked is the Zacks Rank #1 (Strong Buy). The rank helps to find companies which look like dependable earnings candidates who have a strong chance of beating expectations.
The Zacks Premium Screens gives you access to “EPS Growth, Revisions, & Positive Surprises” and 45 other premium screens designed to give you superior investment returns. They give you a wide range with regards to finding stocks with various combinations of growth, value, earnings, and other metrics.
To use Zacks Premium Screens to find more stock picks based on criteria that’s most important to you— plus, gain access to the Zacks Rank for your stocks, mutual funds and ETFs; Zacks Style Scores, Equity Research Reports; Focus List portfolio of 50-longer-term stocks and more—start your 30-day free trial to Zacks Premium.