5 IBD 50 Stocks With Expected Accelerating EPS Growth

 

With Europe falling into recession and in danger of a euro collapse, major emerging markets slowing and job growth stalling at home, many firms are struggling to string together quarterly growth. Even highly rated companies are finding it difficult to deliver faster growth.

So investors should take note of those firms that are accelerating in the current climate. Here are five IBD 50 stocks that are expected to report faster earnings growth in their current quarters vs. the prior period:

Mellanox Technologies (MLNX), No 5. on the IBD 50 list, grew EPS by 113% in its first quarter to 51 cents. Analysts think the Israeli maker of products that speed up data transmission will post earnings of 73 cents, which would be a 170% boost in its current quarter. Those accelerating growth rates come on top of Q4's 48% advance.

Mellanox said June 12 that Intel (INTC) will use its gear for its high-end server platforms.

Shares surged 8.3% for the week to 66.73, a new record close.

Align Technology (ALGN), No. 8 on the IBD 50, grew EPS by 29% in its last quarter, to 27 cents. That's a slower pace than the doubling EPS it showed in Q4. But analysts forecast the maker of clear plastic teeth aligners will grow earnings by 40% when it reports Q2 results next month.

Shares climbed 2.9% through the week to 31.74. The stock has been moving sideways since gapping up to a new high on April 24 — after its latest earnings report.

Stratasys (SSYS), which makes 3D printers used in various industries for prototyping, grew earnings by 33% to 28 cents in its fiscal first quarter. That was a slower pace than the 48% growth it put in the quarter before that. But looking ahead, analysts see 39% growth to 32 cents, when the No. 41 stock on the IBD 50 reports Q2 EPS.

Shares edged slightly lower for the week to 46.49, just below their 50-day line.

Spirit Airlines (SAVE), No. 32 on the IBD 50, is growing sales with a host of fees for everything from a window seat to a carry-on bag. The discounter said passenger-miles traveled climbed 16% so far this year through May. Its earnings growth slowed in the first quarter to 22%, from 57% growth in Q4. But analysts see that growth accelerating again in Q2, with forecasts for EPS of 48 cents, a 30% hike from the year before.

Shares slipped 1.7% for the week to 19.03. The stock has been in a downtrend since early May.

Analysts also see burrito joint Chipotle Mexican Grill (CMG) accelerating growth. The No. 29 on the IBD 50 list grew EPS by 35% in Q1 to $1.97, on top of 23% growth in Q4. Analysts see that continuing with a 40% bump in Q2 EPS to $2.30.

Shares slid 1.2% for the week to 402.45. The 50-day moving average has been acting as a ceiling for the past several weeks.

Others on the IBD 50 are still gro

wing, though perhaps not as fast as in their latest period.

Analysts expect modest acceleration from all-terrain vehicle maker Polaris Industries (PII), No. 44 on the IBD 50 list. Discounter Dollar Tree (DLTR), No. 11, is benefiting from an increase in cash-strapped customers. But analysts see Q2 EPS growth at 22%, level with Q1's gain.

Another IBD 50 regular, Apple's (AAPL) EPS surged 92% in its most recent quarter, down from 116% in the prior period. And with no new blockbuster tech product out, analysts forecast fiscal Q3 EPS coming in at $10.37 per share, a mere 33% bump from a year ago.

By KEVIN HARLIN, INVESTOR'S BUSINESS DAILY
Posted 06/16/2012 08:02 AM ET