While last year was dominated by high-growth tech stocks, the economic recovery this year has motivated investors to take profits in those stocks and rotate to much cheaper cyclical stocks to capitalize on the economic recovery. However, with accelerating economic recovery, a new set of growth stocks–including some of the pandemic winners–are now grabbing investors’ attention. The renewed investor interest in…
growth stocks is evidenced by the SPDR Portfolio S&P 500 Growth ETF’s (SPYG) 5% gains over the past month versus the SPDR Portfolio S&P 500 Value ETF’s (SPYV) 3.8% returns.
Not all stocks that advanced over the past several months are well positioned to continue growing with the economic recovery. So, it’s wise to take a close look at companies’ business models to ensure that there are sufficient opportunities for them to grow even absent pandemic tailwinds.
We think Goldman Sachs Group Inc. (GS – Get Rating), Intuitive Surgical, Inc. (ISRG – Get Rating), Cognex Corporation (CGNX – Get Rating), and Manpower Group, Inc. (MAN – Get Rating) possess solid growth attributes and could deliver solid returns in the upcoming months.
The Goldman Sachs Group Inc. (GS – Get Rating)
One of the top players in the investment banking and management space, GS operates through four segments: Investment Banking, Global Markets, Asset Management, and Consumer & Wealth Management. The company provides a range of financial services to corporations, financial institutions, governments, and individuals worldwide.
GS’ $17.70 billion in net revenues for its fiscal year 2021 first quarter, ended March 31, 2021, represents an 102.5% year-over-year rise. Its gross profit has increased 42% year-over-year to $1.21 billion. The company’s net income has increased 463.5% from the prior-year quarter to $6.83 billion. Also, its EPS increased 502.5% year-over-year to $18.80.
The company’s revenue has grown at a 14.7% CAGR over the past three years, while its EPS has grown at a 56.1% CAGR over the period. This reflects GS’ steady growth over the past few years.
For the current quarter, ending June 30, 2021, analysts expect GS’ EPS and revenue to increase 1,679.2% and 22.9%, respectively, year-over-year to $9.43 and $11.98 billion. Also, it surpassed the consensus EPS estimates in three of the trailing four quarters.
Hazeltree and GS’ Transaction Banking (TxB) announced a joint solution on March 2to streamline treasury management with integrated global payments and FX capabilities. The solution is expected to simplify operations and reduce cost for treasurers managing cash and foreign exchange transactions. The demand for this solution is expected to increase in the coming months. The stock has gained 97.7% over the past year to close yesterday’s trading session at $350.16.
It’s no surprise that GS has an overall B rating, which equates to Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
The stock has a B grade for Growth, Value, and Sentiment. Click here to see GS’ ratings for Momentum, Stability, and Quality as well.
GS is ranked #9 of 24 stocks in the A-rated Investment Brokerage industry.
Intuitive Surgical, Inc. (ISRG – Get Rating)
ISRG develops, manufactures and markets the da Vinci surgical system and Ion endoluminal system. Its da Vinci surgical system includes surgeon’s consoles, patient-side carts, 3-D HD vision systems, skills simulators, and da Vinci Xi integrated table motions. The company also provides a comprehensive suite of services, training, and education programs.
The company’s $1.30 billion in net sales for its fiscal year 2021 first quarter, ended March 31, represents a 17.5% year-over-year rise. Its gross profit has increased 22.3% year-over-year to $902.60 million. The company’s net income has increased by 37.6% year-over-year to $435.2 million. Also, its adjusted EPS has increased by 34.2% year-over-year to $3.61.
ISRG’s revenue has grown at a 11.2% CAGR over the past three years. Its EBITDA and EPS have increased at CAGRs of 5.2% and 13.5%, respectively, over the same period. This reflects the company’s consistent growth over the past few years.
For the quarter ended June 30, 2021, analysts expect ISRG’s EPS and revenue to increase 174.7% and 47.8%, respectively, year-over-year to $3.05 and $1.26 billion. Also, it surpassed the consensus EPS estimates in each of the trailing four quarters. The stock has…
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