Choosing between growth stocks and value stocks is one of the biggest decisions for investors currently. Over the course of the last century, value stocks have outperformed their growth counterparts. However, since the Great Recession, growth stocks have delivered greater returns.
Growth stocks’ strength has been particularly evident over the past year thanks to the COVID-19 pandemic. During this period, the SPDR Portfolio S&P 500 Growth ETF (SPYG) has returned 28%, while the SPDR Portfolio S&P 500 Value ETF (SPYV) has returned 1.2%. While many believe that an expected economic recovery will lead to some rotation by investors away from growth stocks into value stocks, growth stocks are expected to continue performing well this year also.
After delivering solid returns in 2020, growth stocks FMC Corporation (FMC), KAR Auction Services, Inc. (KAR), and Revolve Group, Inc. (RVLV) still have plenty of upside this year. These companies have been working on improving their products, which we think should continue to drive their growth.
FMC Corporation (FMC)
FMC delivers chemical products and solutions. The company operates in the industrial, consumer, and agricultural markets. Its stock has gained 23.3% over the past year.
FMC is now collaborating with Zymergen Corporation to develop more cost-effective crop protection technology. The company has also partnered with Nutrien Ag Solutions to offer the Deploy Arc farm intelligence platform in the U.S.
FMC’s revenue has grown at a CAGR of 7.5% over the last five years. The company’s EBITDA has grown at a CAGR of 35% over the last three years.
FMC is expected to see a revenue growth of 6.2% for the quarter ended March 31, 2021 and 6.2% in 2021. Its EPS is estimated to grow 13.1% in 2021 and at a rate of 10.1% per annum over the next five years.
How does FMC stack up for the POWR Ratings?
A for Trade Grade
A for Buy & Hold Grade
B for Peer Grade
B for Industry Rank
A for Overall POWR Rating
The stock is also ranked #10 of 99 stocks in the Chemicals industry.
KAR Auction Services, Inc. (KAR)
KAR provides car auctions and related services. The company has operations worldwide. Over the past six months, KAR’s stock price has increased 46.8%.
KAR recently completed an acquisition of BacklotCars, which will deepen the company’s inventory of digital marketplaces. KAR’s online platform has launched a new Insights for Buyers and Sellers feature. This feature is powered by the company’s data science and analytics engine called DRIVIN.
KAR’s revenue is estimated to increase 15.1% in 2021. The company’s EPS is expected to rise 63.7% in 2021 and 14% per year over the next five years.
KAR’s strong fundamentals are reflected in its POWR Ratings. It has a “Buy” rating with a “B” for Trade Grade. It is ranked #11 of 23 stocks in the Auto Dealers & Rentals industry.
Revolve Group, Inc. (RVLV)
RVLV is a fashion retailer that targets millennials. The company offers apparel, footwear, and beauty products from a large variety of brands. Over the past year, the stock has returned 79.9%.
RVLV recently upgraded its service for Canadian customers. The company’s stores in Canada now allow the return of merchandise with zero cost to the customer. The company also returns any applicable duties and taxes.
RVLV’s revenue is expected to grow 7% for the quarter ended March 31, 2021 and 18.1% in 2021. The company’s EPS growth is expected to be 11.1% in 2021 and 19.6% per annum over the next five years.
It is no surprise that RVLV has a “Strong Buy” in our POWR Ratings systems with a grade of “A” in Trade Grade, Buy & Hold Grade, Peer Grade, and Industry Rank. In the 61-stock Consumer Goods industry, RVLV is ranked #14.
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FMC shares were trading at $122.22 per share on Thursday morning, up $0.30 (+0.25%). Year-to-date, FMC has gained 6.34%, versus a 1.80% rise in the benchmark S&P 500 index during the same period.
About the Author: Aaryaman Aashind
Aaryaman is an accomplished journalist that’s passionate about providing in-depth insights about investing and personal finance. Recently he has been focused on the stock market and he specializes in evaluating high-growth stocks. More...
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