Since the beginning of this year, the market has been highly volatile. The volatility has been fostered primarily by investors’ concerns over record-high inflation and the Fed’s decision to raise interest rates several times this year. Furthermore, the United Nations has warned that the global economic recovery is losing steam and facing consequential headwinds amid the COVID-19 pandemic. In addition, supply-chain issues and poor labor market data are also fostering stock market volatility. The International Monetary Fund (IMF) has downgraded its 2022 global growth forecast to 4.4%.
However, we believe beaten-down growth stocks are ideal bets now for investors seeking to maximize their returns over the long term. Investors’ interest in growth stocks is evidenced by the SPDR Portfolio S&P 500 Growth ETF’s (SPYG) 17.5% gains over the past year.
Bio-Techne Corporation (TECH), Informatica Inc. (INFA), and Lattice Semiconductor Corporation (LSCC) have declined more than 25% in price year-to-date. However, based on their solid fundamentals and impressive growth attributes, they could gain considerably in the long run. Also, these stocks are rated “Buy” in our POWR Ratings system.
Bio-Techne Corporation (TECH)
TECH is a supplier of high-quality and innovative tools for life science research, therapeutic manufacturing, and clinical diagnostics. The Minneapolis, Minn.-based company provides reagents, instruments, custom manufacturing, and testing services. It operates through two segments, Protein Sciences, and Diagnostics and Genomics. TECH offers its products under the R&D Systems, Novus Biologicals, Tocris Biosciences, ProteinSimple, Advanced Cell Diagnostics, and ExosomeDx brands.
This month, TECH announced that one of its brands, ProteinSimple, had released its Stellar NIR/IR™ Detection Modules for Jess, a protein analysis solution. The Stellar fluorescence module should enable detecting low abundance proteins and multiplexing multiple analytes within the same detection lane, also setting a new industry standard for western blotting fluorescence detection sensitivity.
During its fiscal first quarter, ended Sept. 30, 2021, TECH’s net sales increased 26.2% year-over-year to $257.72 million. The company’s gross margin grew 24.2% from its year-ago value to $171 million. Its operating income rose 28.8% from the prior-year quarter to $63.22 million. Also, the company’s net earnings increased 108.5% year-over-year to $69.62 million.
Analysts expect TECH’s revenue to increase 17.2% year-over-year to $1.09 billion for its fiscal 2022. The company has an impressive earnings surprise history; it beat the consensus EPS estimates in each of the trailing four quarters. Also, its EPS is expected to increase 13.6% in fiscal 2021. TECH’s Revenue and EBITDA have increased at CAGRs of 14.2% and 16.5%, respectively, over the past three years. The stock has declined 29% year-to-date. However, TECH has gained 13.8% in price over the past year.
TECH’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
Also, the stock has a B grade for Growth and Quality. We have also graded TECH for Stability, Sentiment, Momentum, and Value. Click here to access all of TECH’s ratings. TECH is ranked #23 of 450 stocks in the Biotech industry.
Informatica Inc. (INFA)
INFA builds and delivers solutions to accelerate data innovations. The Redwood City, Calif.-based company provides artificial intelligence (AI), an Intelligent Data Management Cloud (IDMC) platform that manages and unifies data across any multi-cloud, hybrid system and empowers enterprises to advance their data strategies. INFA’s platform also includes customer and business 360 products to create, visualize, and browse comprehensive 360-degree views of business-critical data.
Last month, INFA expanded its partnership with Databricks to empower organizations to accelerate the democratization of their data with Informatica and Databricks’ Lakehouse Platform. This introduction of new features should deliver a streamlined experience to their customers and make it easier to leverage INFA’s IDMC pipeline capabilities.
During the third quarter, ended Sept. 30, 2021, INFA’s total revenues increased 10.6% year-over-year to $361.81 million. The company’s gross profit grew 12.7% from its year-ago value to $281.23 million. Its interest income came in at $311,000. Also, the company’s net income amounted to $2.73 million, compared to a $32.31 million net loss in the second quarter of 2020.
INFA’s revenue is expected to increase 10.2% year-over-year to $1.58 billion in its fiscal 2022. Also, its EPS is expected to increase 12.7% in fiscal 2022. INFA’s revenue and EBITDA have increased 1.27% and 53.5%, respectively, year-over-year. INFA’s shares have declined 29.7% in price year-to-date, but the stock has surged 1.2% over the past five trading days.
It is no surprise that INFA has an overall B rating, equating to a Buy in our POWR Rating system. Also, the stock has an A grade for Sentiment and a B grade for Growth.
Lattice Semiconductor Corporation (LSCC)
Incorporated in 1983, LSCC in Hillsboro, Ore., is a low-power programmable company that develops technologies and monetizes through differentiated programmable logic semiconductor products, system solutions, design services, and licenses. The company provides video connectivity application-specific standard products. LSCC develops and sells semiconductor products in Asia, Europe, and the Americas.
Last month, LSCC launched its latest Lattice Automate solution stack for industrial automation systems that features new real-time networking capabilities. The company believes that this latest version should accelerate customers’ development processes without sacrificing performance and power.
LSCC’s revenue for the third quarter, ended Sept. 30, 2021, increased 28% year-over-year to $131.91 million. The company’s gross margin grew 32.9% from its year-ago value to $82.83 million. Its income from operations rose 110.8% from the prior-year quarter to $27.02 million. Also, the company’s net income increased 112.1% year-over-year to $26.74 million.
LSCC’s revenue is expected to be $570.63 million for its fiscal year 2022, representing a 12.4% increase year-over-year. It has surpassed the consensus EPS estimates in each of the trailing four quarters. The company’s EPS is expected to increase 18.6% in fiscal 2022. In addition, its EBIT and EBITDA grown at CAGRs of 52.5% and 18.2%, respectively, over the past three years. LSCC has declined 34.6% year-to-date. However, it has gained 25% in price over the past year.
LSCC’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. Also, the stock has a B grade for Growth and Quality.
In addition to the POWR Rating grades I have just highlighted, one can see LSCC’s ratings for Sentiment, Value, Stability, and Momentum here. The stock is ranked #39 of 100 stocks in the A-rated Semiconductor & Wireless Chip industry.
What To Do Next?
If you would like to see more top growth stocks, then you should check out our free special report:
What makes them “MUST OWN”?
All 9 picks have strong fundamentals and are experiencing tremendous momentum. They also contain a winning blend of growth and value attributes that generates a catalyst for serious outperformance.
Even more important, each recently earned a Buy rating from our coveted POWR Ratings system where the A rated stocks have gained +31.10% a year.
Click below now to see these top performing stocks with exciting growth prospects:
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TECH shares were trading at $370.92 per share on Monday morning, up $3.83 (+1.04%). Year-to-date, TECH has declined -28.30%, versus a -6.41% rise in the benchmark S&P 500 index during the same period.
About the Author: Priyanka Mandal
Priyanka is a passionate investment analyst and financial journalist. After earning a master's degree in economics, her interest in financial markets motivated her to begin her career in investment research. More...
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