4 Top Growth Stocks Trading at a Discount

: PCRFY | Panasonic Corporation News, Ratings, and Charts

PCRFY – Growth stocks have delivered impressive returns on investment over the past year thanks to COVID-19-pandemic-driven trends. But we believe that as the global economy recovers from the pandemic shock, companies such as Panasonic (PCRFY), Hologic (HOLX), AGCO (AGCO), and ArcBest (ARCB) should witness further growth. Currently trading at discounts to their peers, these stocks are well-positioned to reach new highs this year.

The stock markets have been hitting new highs despite an economic recession. Though an expected economic recovery has led to some rotation away from growth stocks to value names, growth stocks will remain the major driving force behind the market’s continued rally.

However, as most growth stocks are currently trading at lofty valuations, it could be risky to invest in them right now. The good news is that there are still some growth stocks that are trading at discounts to their peers. And these stocks could help one benefit from the economic recovery and from the company’s track records of growth.

Panasonic Corporation (PCRFY), Hologic, Inc. (HOLX), AGCO Corporation (AGCO) and ArcBest Corporation (ARCB) possess solid growth attributes and are currently trading at reasonable valuations.

Panasonic Corporation (PCRFY)

Based in Japan, PCRFY is a worldwide leader in the development of diverse electronic technologies and solutions for customers in the consumer electronics, housing, automotive, and B2B businesses. The company operates through five segments: Appliances, Life Solutions, Connected Solutions, Automotive, and Industrial Solutions.

PCRFY’s trailing-12-month p/e of 18.70x is 24.7% lower than the industry average  24.83x. In terms of forward price/sales, the stock is currently trading at 0.51x, 62.9% lower than the industry average 1.38x.

In  January, PCRFY announced that it had developed Vixell, a vacuum insulated cooling box. It can store items at a temperature of -70 degrees. PCRFY  has also completed a field test of a home delivery services using a robot.

PCRFY has gained 84% over the past five years owing to its impressive earnings growth. Its net income has increased at a CAGR of 5.3% over the past three years, while its total assets have grown at a CAGR of 1.5% over the same period.

PCRFY’s operating profit has increased 29.8% year-over-year to ¥130.20 billion in the fiscal third quarter ended December 31, 2020. Its net profit has increased 5.2% from the year-ago value to ¥81.20 billion over the same period.

Analysts expect PCRFY’s revenues to grow 7.3% year-over-year to $17.09 billion in the current quarter (ending March 31, 2021). The company has an impressive earnings surprise history; it beat consensus Street estimates in three of the trailing four quarters. The stock has gained 22.1% over the past year.

PCRFY’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.

PCRFY has a B grade  for Growth and Stability, and an A for Value. Within the B-rated Technology-Hardware industry, it is ranked #4 of 52 stocks.

In total, we rate PCRFY on eight different levels. Beyond what we’ve  stated above, we have also given PCRFY grades for Quality, Momentum and Sentiment. Get all PCRFY’s ratings here.

Hologic, Inc. (HOLX)

HOLX manufactures diagnostic equipment with a focus on women’s health products. Its diverse equipment portfolio can be used for multiple purposes, ranging from diagnosis to treatment. The company operates through four segments – Diagnostics, Breast Health, GYN Surgical and Skeletal Health. HOLX has an international supply chain facilitated through direct sales, service forces and independent distributors.

HOLX’s trailing-12-month non-GAAP p/e of 12.74x is 50.4% lower than the industry average of 25.69x. In terms of forward price/sales, the stock is currently trading at 3.59x, 64.8% lower than the industry average 10.19x.

In February, the company announced a multi-year strategic collaboration with Alphabet Inc.’s (GOOGL) Google Cloud that is expected to feature the integration of Google Cloud’s machine learning (ML) technologies with HOLX’s Genius Digital Diagnostics System. This is expected to transform  screening and accelerate the eradication of cervical cancer. In January, HOLX acquired two companies – Biotheranostics and SOMATEX- for a combined $294 million. While Biotheranostics is a leading company in the field of molecular tests and breast cancer detection, SOMATEX specializes in Biopsy site markers and localization technology. These acquisitions should allow HOLX to expand its range of specialty treatments, which will attract higher volumes of customers.

In December, the company received FDA approval for its proprietary Genius AI technology for cancer detection. The approval allows HOLX to market its breakthrough product across the U.S.  and thereby enhance its revenues.

HOLX has gained 111% over the past three years owing to its impressive revenue and earnings growth. Its revenues have increased at a CAGR of 13.3% over the past three years, while its EBITDA has grown at a CAGR of 31.1% over the same period.

HOLX’s revenue has increased 89.3% year-over-year to $1.61 billion in the fiscal first quarter ended December 26, 2020. Its  U.S. segment revenue increased 79.8% from its year-ago value to $1.14 billion, and its international revenue increased 116.7% to $472 million. Its gross margin has improved 2230 basis points from the prior-year quarter to 73.3%, while its EPS improved 74.8% to $2.50 over the same period.

Analysts expect HOLX’s revenues to grow 103.4% year-over-year to $1.54 billion in the current quarter (ending March 31, 2021).  A consensus EPS estimate of $2.60 in the second quarter represents  a 356.9% improvement year-over-year. The company has an impressive earnings surprise history; it beat consensus Street estimates in three of the trailing four quarters. HOLX has gained 49.5% over the past year.

HOLX has an overall rating of A, which equates to Strong Buy in our POWR Ratings system. HOLX has an A grade for Growth, Value and Momentum. In the 179-stock Medical – Devices & Equipment Industry, it is ranked #1.

Click here to see the additional POWR Ratings for HOLX (Stability, Quality, Industry and Sentiment).

AGCO Corporation (AGCO)

AGCO manufactures and distributes agricultural equipment and related replacement parts worldwide. The company’s product range includes tractors, hay tools, and forage equipment. Small farmers, specialty agriculture, landscapers, equestrians, and residential applications use the company’s compact tractors.

AGCO’s forward-12-month p/e of 16.58x is 35% lower than the industry average 25.50x. In terms of forward price/sales, the stock is currently trading at 0.87x, 44% lower than the industry average  1.56x.

AGCO partnered with Universal Technical Institute this month to offer an agricultural manufacturer training program. Given the rising demand for skilled technicians in the transportation and agriculture industries, this 12-week advanced program should  be able to attract high number of students.

AGCO’s EPS has grown at a CAGR of 34.5% over the past three years.

AGCO’s net sales have increased 8.1% year-over-year to $2.72 billion in the fourth quarter ended December 31, 2020. Its net profit has increased 253.3% from the year-ago value to $135.40 million over the same period, yielding an EPS of $1.81.

Analysts expect AGCO’s revenues to grow 14.1% year-over-year to $2.20 billion in the current quarter (ending March 31, 2021). A consensus EPS estimate of $1.10 in the first quarter represents  a 27.9% improvement year-over-year. The company has an impressive earnings surprise history; it beat consensus Street estimates in each of the trailing four quarters. AGCO has gained 79.2% over the past year.

It is no surprise that AGCO has an overall rating of B, which equates to Buy in our POWR Ratings system. AGCO has an A grade for  Value . In the 31-stock Agriculture industry, it is ranked #5.

Click here to see the additional POWR Ratings for AGCO (Quality, Industry, Growth, Stability, Momentum, and Sentiment)

ArcBest Corporation (ARCB)

ARCB provides freight transportation services and integrated logistics solutions worldwide for supply chain needs. It operates through three segments: Asset-Based, ArcBest, and FleetNet.

ARCB’s forward-12-month p/e of 13.58x is 46.8% lower than the industry average of 25.50x. In terms of forward price/sales, the stock is currently trading at 0.45, 71% lower than the industry average of 1.56x.

Last December, ARCB announced a partnership with a leading virtual care provider, Doctor on Demand, to offer a new Virtual Primary Care health plan benefit to its employees and their dependents nationwide. As a provider of essential freight and logistics services, ARCB has a large field employee roster. Virtual Primary Care would give these employees an easy, convenient way to access care.

ARCB’s EPS has increased at a CAGR of 6.1% over the past three years, while it’s leveraged free cash flow has grown at a CAGR of 40.5% over the same period.

ARCB’s revenues have increased 13.8% year-over-year to $816.41 million in the fourth quarter ended December 31, 2020. Its operating income has risen 369.4% from the year-ago value to $30.25 million, while its EPS has improved 527.3% to $0.94 over the same period.

Analysts expect ARCB’s revenues to grow 8.6% year-over-year to $76.36 million in the current quarter (ending March 31, 2021). A consensus EPS estimates of $0.60 in the first quarter represents  a 66.6% improvement year-over-year. The company has an impressive earnings surprise history; it beat consensus Street estimates in each of the trailing three quarters. The stock has gained 144.3% over the past year.

ARCB’s POWR Ratings reflect this promising outlook. The stock has an overall rating of A which equates to Strong Buy in our rating system. ARCB has an A grade for both Value and Growth and a B grade for Quality. It is currently ranked #5 of 51 stocks in the Auto & Vehicle Manufacturers Industry. The industry is rated B.

We also have given ARCB grades for Momentum, Stability, and Sentiment. Get all ARCB’s ratings here.

The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.

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PCRFY shares were unchanged in after-hours trading Thursday. Year-to-date, PCRFY has gained 19.73%, versus a 4.50% rise in the benchmark S&P 500 index during the same period.


About the Author: Rishab Dugar


Rishab is a financial journalist and investment analyst. His investment approach is to focus on quality stocks, trading at low prices, with business models that he readily understands. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
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HOLXGet RatingGet RatingGet Rating
AGCOGet RatingGet RatingGet Rating
ARCBGet RatingGet RatingGet Rating

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