Key points
- Investors are familiar with Nvidia’s rapid earnings growth, but it’s not the only stock with such dynamic earnings increases.
- Even smaller companies, including Fluor, Jefferies and Golden Entertainment, are part of the exclusive club of those growing earnings by 200% or more.
- This level of growth reflects strong demand for a company’s products or services, efficient operations, and a focus on profitability.
- 5 stocks we prefer to Fluor
Maintaining an earnings growth rate of 200% or more is not something a company does by accident, and only a select few manage to pull it off.
You probably won’t be surprised by this powerful AI chip Nvidia Corp. NASDAQ:NVDA is a member of the exclusive group of companies that can grow profits by 200% or more.
Check out some smaller, lesser-known titles that are part of that club: Fluor Corp. New York Stock Exchange: FLR, Jefferies Financial Group Inc. NYSE: JEF AND Golden entertainment NASDAQ: GREEN.
Triple-digit earnings growth often signals a company’s potential for future success. This type of rapid earnings expansion typically reflects strong demand for the company’s products or services, combined with efficient operations and a management team focused on the bottom line.
It also means that the company is not in recovery mode after one or more events, such as supply chain difficulties or high raw material input prices, which affect profitability.
Fluoride stocks in the “buy” range.
Engineering and construction specialist Fluor is expected to report earnings of $2.62 per share when it reports 2023 results on Feb. 20.
When it reported third-quarter results in November, Fluor upgraded its earnings outlook, saying, “This revised guidance reflects positive progress on large energy solutions projects and continued progress on projects in our legacy portfolio.”
The Fluor chart shows a return of 17.03% over the past three months, outperforming its mid-cap index, as tracked by the SPDR S&P MidCap 400 ETF Trust NYSEARCA: MDYas well as the broader market, followed by the SPDR S&P 500 ETF Trust Fund NYSEARCA: SPY.
On Feb. 8, Fluor stock broke out of a flat base with a buy point above $40.77, but reversed course and closed the session at $40.07. The title is currently usable.
Shares jumped 4.73% on Feb. 7, on slightly heavier volume than normal. This suggests that an institutional buyer is accumulating shares, which is always a good sign.
Jefferies refocuses on core business
Mid-cap financial services company Jefferies is expected to grow earnings 212% this year, to $3.43 per share.
The firm is slimming down, selling off investments in various lines of business to bring its focus back to investment banking and wealth management. For example, on February 5, the company said it planned to sell Italian wireless broadband provider OpNet for about $523 million.
It previously sold an auto finance unit and a gold and silver mining company.
Looking at Jefferies’ earnings history, you will see a sharp decline in net income in 2023, so the forecast for 2024 is somewhat based on easy comparisons. However, analysts expect revenue growth to return after several consecutive quarters of decline.
While not as large as other financial stocks, Jefferies Financial may have the advantage of greater agility and growth potential due to its smaller size.
Wall Street firms tracking the company expect more growth; Jefferies analyst forecasts show a consensus view of “buy”.
A golden opportunity for a small-cap casino operator?
Amid the glitz and glamor of casino stocks, it’s easy to overlook small-cap Golden Entertainment, which has rallied 4.55% over the past three months.
The Golden Entertainment chart shows the stock forming a cup-and-handle base below a $42.14 buy point.
The company operates eight casino resorts in Nevada, including the Strat in Las Vegas. It also operates PT Taverns, with locations throughout Las Vegas.
The company is expected to grow earnings 239% to $8.86 per share when it reports 2023 results on Feb. 29.
Like many other sectors of the economy, the gaming industry has defied expectations of a downturn due to fears of inflation or recession.
As a group, gaming stocks have been trending higher since late October, along with the broader market. THE VanEck Gaming ETF NASDAQ:BJK it has returned 12.03% in the last three months.
Analyst forecasts at Golden Entertainment show a consensus view of “buy” with a price target of $50.67, a healthy upside of 31.64%.
A word of warning: The company has a heavy debt burden, rare in industries based on numerous physical locations. The company is focused on reducing debt, but Wall Street expects a sharp decline in earnings this year, even as it sees upside potential in the stock price.
Before you consider Fluor, you’ll want to hear this.
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