August 14th marked 100th trading day since the stock market bottomed on March 23rd. Incredibly, this was the best 100 day performance for the stock market since 1933.
Leading this rally were growth stocks. Growth stocks are companies that are expected to grow sales and earnings more quickly than stock market averages. So it’s not surprising that…
the SPDR S&P 500 Growth ETF (SPYG) was up 58.6% in the 100 trading days since March 23rd and the SPDR S&P 500 ETF Trust (SPY) was up “only” 51%.
Growth stocks have a high P/E (price-to-earnings) ratio because they are expected to grow rapidly. Historically, the average P/E for the S&P 500 is about 15. But It’s common to see growth stocks often have a P/E ratio of 50, 100, or even higher.
However, currently, the P/E for many growth stocks are extremely high; Zoom Communication’s (ZM) P/E is 1,470, Tesla’s (TSLA) P/E is 944, and Freshpet’s (FRPT) P/E is 930.
So which stocks should investors buy if they want to participate in growth?
I’ve compiled a list of 3 stocks, under $10, that have significant earnings growth potential and lower P/E ratios. There are Yamana Gold Inc. (AUY), LightInTheBox Holding Co., Ltd. (LITB) and Fortress Biotech, Inc. (FBIO).
Yamana Gold Inc. (AUY)
AUY is a Canadian precious metals producer which explores for and produces gold and silver ores. AUY plans to continue to build on its operations through expansion and optimization initiatives at existing operating mines, development of new mines, the advancement of its exploration properties.
The stock closed yesterday’s trading session at $6.31, gaining 60% year-to-date. AUY had hit its low of $2.55 in March, but has recovered more than 147% since then.
A significant increase in gold prices amid the ongoing uncertainties is the key performance driver for AUY’s performance. The momentum in gold prices was reflected in AUY’s second quarter report as the free cash flow for the firm grew 50% year-over-year to $92.2 million. Moreover, the company increased its dividend pay-out by 23% to $0.016 during the quarter.
AUY has recently announced its intention to get listed on the London Stock Exchange. This listing will allow the company to improve its liquidity and expand its accessibility to an enlarged investor base.
AUY’s annual return on equity is 6.3%. The street expects the company’s EPS to grow 40% per year in the next five year and it’s P/E ratio is 23.
How does AUY stack up for the POWR Ratings?
A for Trade Grade
B for Buy & Hold Grade
B for Industry Rank
B for Overall POWR Rating.
It is ranked #13 out of 30 stocks in the Miners – Gold industry.
LightInTheBox Holding Co., Ltd. (LITB)
LITB engages in the online retailing of various products and services to consumers worldwide. It provides customized, special occasion, and fast fashion apparel products; and other general merchandise products, such as accessories and gadgets, home garden products, electronics and communication devices, and other products. The company offers its products primarily through its e-commerce website and mobile application. It also provides software development and information technology support services.
The stock closed yesterday’s trading session at $2.77. With a year-to-date gain of…
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