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Monday July 26, 2010
Five favorites from US Investment
by Stephen Quickel, editor US Investment Report  Among our new recommendations, many trade well off their highs, but offer rapid earnings growth, low valuations and high analyst ratings. Their five-year earnings growth averages 19%, their average P/E is 13.6 times 2011 earnings and average PEG ratio 0.73. Below we look at six of these new buys, from the technology and medical sectors. Here’s what we like most about each of these stocks: 
Catalyst Health Solutions (CHSI) of Rockville, MD, with revenues of $3.5 billion, is a fraction the size of pharmacy benefit management behemoths. Express Scripts and Medco Health Solutions. Yet it’s projected to grow earnings 21% a year (vs. their 15-16%) and trades at a lower PEG ratio of 0.78 (vs. their 0.85-0.86). Emergency Medical Services (EMS) of Greenwood, CO, has sold down from 57 to 46 the past three weeks, despite solid profit returns and impressive growth in emergency medical transportation via regional acquisitions and internal expansion. Our upside is 15 to 20 bucks from 46. Owens Corning (OC) of Toledo long ago helped create the glass-fiber industry and has continued expanding its composites technology and their ever-widening product applications. Five-year earnings growth is projected at 22%—against a very low forward P/E of 10 and a PEG of just 0.47. Now at 29, the stock is headed for 40. Research in Motion (RIMM), whose 46-million Blackberry subscribers still give it the leading market share in mobile devices, gets socked whenever Apple, Google and others trot out shiny new devices. Yet earnings are growing 18.5% a year, its cash flow is high and its debt is low, and its forward P/E is now only 9.1. Volterra Semiconductor (VLTR), founded in 1996 in Silicon Valley with operations throughout eastern Asia, makes ever-faster, smaller power supply chips for networking and telecom applications. Its stock, up from 20 to 27 since May, seems headed for the mid to high 30s . Learn more about this financial newsletter at Stephen Quickel's US Investment Report. |
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