Investors looking for potentially explosive sales growth should consider stocks poised to release products or services with "blockbuster potential," per Bloomberg Intelligence. From about 2,000 companies in a variety of sectors, including energy, technology, retail and finance, Bloomberg's analysts chose 50 that also offer attractive profit margins, market share, and debt levels.
Among those stocks are these 10, with their 52-week gains through Nov. 8, 2019: Roku Inc. (ROKU), 167%, Cellnex Telecom SA (0R9C-GB: London), 96%, Motorola Solutions Inc. (MSI), 27%, Gobal Payments Payments Inc. (GPN), 50%, CD Projekt SA (7CD-FF: Frankfurt), 75%, Lululemmon Athletica Inc. (LULU), 43%, Anta Sports Products Ltd. (2020-HK: Hong Kong), 123%, AT&T Inc. (T), 27%, AstraZeneca PLC (AZN), 16%, and Ping An Insurance Group Co. of China Ltd. (2318-HK: Hong Kong), 20%. The S&P 500 Index was up by 10% during the same period.
- Bloomberg has identified stocks with high sales growth potential.
- Several are rolling out products or services that may be blockbusters.
- Bloomberg also evaluated market share, profit margins, and debt.
Significance for Investors
These stocks also trade in the U.S. in the so-called U.S. OTC grey market, or gray market: Cellnex Telecom, CD Projekt, Anta Sports Products, and Ping An Insurance. Thin trading, limited disclosures, and lack of regulatory compliance often characterize this market. Bloomberg's analyses are summarized below.
Anta Sport Products is the largest Chinese sportswear company, projected to match the market shares of Nike and Adidas in that country within three years. The 2022 Winter Olympics in Beijing and a $100 million investment from Lululemon founder Chip Wilson should boost worldwide growth.
AstraZeneca is developing several new medications for various diseases, including heart failure and lung cancer, that can be blockbusters. Sales grew in 2018 for the first time since 2014, with especially strong demand for two new cancer treatments, Barron's reports. The company also enjoys accelerating sales in China.
AT&T acquired valuable content by purchasing Time Warner. It has growth opportunities in over the top (OTT) streaming and online ad revenue.
CD Projekt, the largest video game maker in Poland, plans to release the highly anticipated role playing game Cyberpunk 2077 in April 2020. First year sales may be as high as 20 million units.
Cellnex is the only independent communications tower company in Europe. With recent acquisitions, it may more than double revenue by 2023.
Global Payments acquired Total System Services at a reasonable price, and profits may exceed goals. Its customized payment processing solutions are preferred by many clients in the restaurant, hotel, and health care industries.
Lululemon, a trendy "athleisure" apparel maker, projects double-digit profit growth through 2023, driven by aggressive expansion into new markets, such as young teens, men, footwear, and personal care. Digital and international expansion are other key initiatives.
“The stock is not cheap,” warns Paul Lejuez, an analyst with Citi Research. However, “Lululemon stands above the rest in retail during a period of uncertainty," he added, per another Barron's article. In Q2 2019, total revenue grew by 22% year-over-year and same-store sales by 15%.
Motorola has evolved into a software and managed services provider. Designing advanced networks for public safety departments and taking advantage of the U.S. ban on Chinese video gear offer major avenues for growth.
Ping An Insurance is the fourth-largest Chinese company by market value. Its heavy investment in advanced technologies, and tech companies, is enhancing its competitive position. It also is becoming a player in global online banking.
Roku is a leading video streaming content aggregator, managing multiple subscriptions through a single platform. “Roku TV is a runaway train, with many retailers we talk to suggesting that it consistently outsells [Amazon] Fire TVs,” as Rosenblatt Securities analyst Mark Zgutowicz wrote in report quoted in a third Barron's article.
Hosting over 5,000 streaming apps, Roku offers low-cost hardware and ease of use. Roku's share of the U.S. market for internet TV devices is 44%, ahead of 33% for Amazon Fire TV, 16% for Google Chromecast, and 13% for Apple TV. Also, about 33% of all smart TVs sold in the U.S. now have Roku’s software platform built in, appealing to potential customers who do not want multiple devices.
With all these companies, there are contrasting views. Lululemon, for example, risks losing focus as it expands its product lines. For another example, Roku has less name recognition in the streaming market, and arguably a less compelling value proposition, than other players that offer proprietary content, according to other analysts. New competition and macro forces such as changing customer preferences also can effect the outlook for these stocks.