Investor’s Business Daily | James DeTar
Winning stocks like Sanchez Energy often come from a small pool of companies exhibiting strong fundamentals, solid revenue and profit growth over time.
Today’s Screen Of The Day is Top Fundamentals, stocks with three-year compounded earnings per share and revenue growth rates of 25% or higher, with the highest EPS percentage change in the most recent quarter.
The top five stocks on today’s screen are from different industries, and together they represent a cross-section of leaders in the American economy. Here are the top five stocks on the Top Fundamentals screen.
Lannett (NYSE:LCI) tops the list. The generic drugmaker sells treatments for a wide range of ailments, including thyroid deficiency, migraine headaches and glaucoma. It has an amazing three-year compounded EPS growth rate of 438% and a three-year sales growth rate of 26%.
Its EPS last quarter rose 350% to 63 cents, and it’s projected to report a 242% hike this quarter.
Lannett shares rose 2.4% in Wednesday’s stock market trading.
YY (NASDAQ:YY) is No. 2 on today’s screen. The Chinese social network makes Web surfing fun. It lets users take part in group voice or video activities from karaoke to gaming to conference calls.
YY launched its initial public offering in November 2012 at 10.50 per share, so it’s too young to meet the guideline of a three-year minimum 25% growth guideline. But its EPS growth rate is 340% in the nearly two years since its IPO, too strong to ignore. Over that period, its compounded sales growth rate was 146%.
Last quarter, YY’s EPS rose 143% to 56 cents. Its shares rose 1% to 71.83 Wednesday.
Montage Technology Group (NASDAQ:MONT) is another Chinese company and a leader in the hot semiconductor group, ranked 14 on IBD’s list of 197 industries. Montage makes chips for home entertainment devices and cloud computing systems. It boasts a 205% three-year EPS growth rate. Montage last month agreed to be acquired by the state-owned Shanghai Pudong Science and Technology Investment for $693 million.
Oil and gas explorer Sanchez Energy (NYSE:SN) is part of the new shale-oil and natural-gas boom. The Houston-based company has fracking operations in South Texas. In May, it bought an additional 106,000 acres in South Texas’ oil-rich Eagle Ford shale fields. Its three-year EPS growth rate is 205%, and its sales growth rate is 52%. Last quarter, EPS rose 46% to 19 cents. Sanchez, whose shares are also on the IBD 50 list of top-rated stocks, eased fractionally.