5 Fast Growers for Your Consideration
Mar 18th 2013 8:20PM
Updated Mar 18th 2013 8:26PM
When building your portfolio, aim for diversification. You should aim to hold both large and small companies (plus mid-sized ones) and companies in a range of industries. Geographical diversification can also serve you well, offering some protection against a downturn in any single economy. You can also diversify by including both relatively stable dividend-paying companies as well as faster growers that tend to be younger and smaller.
Below are a handful of companies about which you might want to learn more, as each has experienced robust recent revenue growth. That's not enough on which to base an investment decision, but it's a good start, because every company's bottom-line profits depend on the top line. If revenue isn't growing, then it will be hard for other positive measures to grow.
Without further ado, here are a few companies for your consideration. See if any of them interest you and perhaps add them to your watchlist or portfolio.
Antares Pharma is a biotech company with products actually on the market, such as ones featuring its needle-less injection technology and drug-delivering gels. It has been growing briskly, but its stock, which has averaged 22% growth annually over the past five years, may have gotten ahead of itself. It's not a perfect stock, though, as despite its solid top-line growth, its bottom line is still in the red as is its free cash flow. The company has promising partnerships in place, however, and recently got FDA acceptance of an application for its Otrexup treatment of rheumatoid arthritis and psoriasis, with a decision expected by October. The company has a lot of cash and no debt.
ARMOUR Residential , a real estate investment trust (REIT), yields 15.3%. It has been an agency-backed real estate investor but recently changed its charter to broaden its scope, which may lead to greater profits down the road. Insiders have been buying thousands of shares recently, but my colleague Rich Smith has questioned its use of funds to buy back shares, and the company's dividend payout has been falling over the past years, with its yield growing only due to stock-price declines. These details illustrate why rising revenue isn't enough.
Halcon Resources , an oil and gas company, is expected to grow by 30% annually over the coming years. It operates in the promising Bakken region, and recently reported 2012 net daily production 128% higher than year-ago levels and proven reserves up 417%. The stock has averaged annual losses of more than 13% over the past five years, but management is confident, noting during its fourth-quarter conference call that, "Today our focus is on developing our resource base and growing production reserves and cash flow. The balance sheet is healthy, and ... We anticipate new well results from all of our core plays on a regular basis from this point forward, and operations are going quite well."
Mellanox Technologies is an Israel-based semiconductor company. Its stock has been surging, averaging annual gains of 37% over the past five years as it invested heavily in cloud computing and beat Wall Street estimates. The stock took a hit lately, when it reported an inventory accumulation, but management remains bullish. Still, some wonder whether Mellanox's best years are behind it, as it faces competition from the likes of Intel, which bought rival QLogic's technology.
Sarepta Therapeutics is developing the promising Duchenne muscular dystrophy drug eteplirsen, which may end up winning accelerated FDA approval. My colleague Brian Orelli has explained that the drug affects mRNAs by skipping the part of the gene that contain mutations and that "investors should keep an eye on RNA therapeutics given their potential to revolutionize medicine." Some wonder whether it will be bought out, while Wall Street's interest in the company is growing. Its recent reported loss isn't as alarming as it seems, either.
Heady growth is a great factor to have in a company. Just be sure to check out other numbers and factors as well before investing. Make sure you're keeping your money in your best ideas.
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The article 5 Fast Growers for Your Consideration originally appeared on Fool.com.Longtime Fool contributor Selena Maranjian, whom you can follow on Twitter, owns shares of Intel. The Motley Fool recommends and owns shares of Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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