3 Highly-Ranked Growth Stocks on the Move

The market can move pretty fast… especially when it getting over an unprecedented shut down. Stocks are hitting new highs with regularity again and look to make even more history moving forward as the vaccines continue to do their job and this pesky delta variant fades.

So you need a portfolio that can move just as fast! Our Top Ranked Growth Stocks on the Move screen can be a big help.

The three big components for this list are Zacks Ranks of #1 or #2 (Strong Buys and Buys only), a Zacks Industry Rank in the top 50% and Growth Style Scores of “A” or “B”. And the list is even further narrowed with things like average broker ratings, winning surprises, attractive valuations and positive price momentum.

What you’re left with is a list of high profitability stocks. Below are three names that recently made the list:

Microchip Technology (MCHP)

Take a wild guess at what Microchip Technology (MCHP) does. If you said that they make hamburgers or sell clothes, then you should probably get your head checked. MCHP develops and manufactures microcontrollers, memory and analog and interface products for embedded control systems.

In short, it’s a chipmaker with products that are used in small, low-power computers designed to perform specifics tasks. It has three major product lines: microcontrollers (54.4% of fiscal 2021 revenues); analog (28%) and other (17.6%). As part of the semiconductor – analog & mixed space, MCHP is in the top 11% of the Zacks Industry Rank. Shares are up more than 51% in the past 12 months, including 10% this year alone.

Strong and ongoing strength in its analog and microcontroller businesses led to a strong fiscal first quarter report, which included its seventh straight positive earnings surprise. Earnings per share of $1.98 topped the Zacks Consensus Estimate by 4.2%, while net sales of $1.57 billion rose nearly 20% year over year and beat our expectation by more than 1%. MCHP reported record microcontroller and analyst revenue of $902.5 million and $432.1 million, respectively.

Of course, being a semiconductor company, MCHP is being pinched by increasing lead times during this chip shortage. However, the situation is temporary, and the company is seeing increased demand for its industrial, automotive and consumer end-markets as the economy begins opening up.

In fact, business conditions remains strong throughout the quarter with record bookings and backlog for products to be shipped over several quarters. Due in part to its strong backlog for the September quarter, analysts have been boosting their earnings estimates.  

The Zacks Consensus Estimate for this fiscal year (ending March 2022) is up 7.5% in the past 60 days to $8.46. Expectations for next fiscal year (ending March 2023) increased 8% in that time to $9.13, which also suggests year-over-year improvement of nearly 8%.  

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Capri Holdings Ltd. (CPRI)

So here’s the thing: you don’t wear something from Versace if you’re staying home and passing out on the couch in a big bowl of popcorn. Versace is for ‘going out’. So Capri Holdings Ltd. (CPRI) is pretty excited that things are getting back to normal because luxury brands are not meant to be loungewear.

CPRI provides women’s and men’s accessories, footwear and ready-to-wear, as well as wearable technology, watches, jewelry, eyewear and a full line of fragrance products. Its three luxury brands are Michael Kors (72% of total revenues in fiscal 2021); Versace (18%); and Jimmy Choo (10%).

Shares are up more than 240% over the past 12 months, including over 40% this year alone. As with any retailer these days, the company has made several moves to remain competitive in a more difficult environment. Those moves include expanding its product offerings, upgrading its distribution processes and creating more efficient omni-channel capabilities.

Despite all the challenges for the luxury space in this pandemic, CPRI has managed to put together five straight quarters of positive earnings surprises. Its fiscal first quarter was the most recent, as earnings per share of $1.42 topped the Zacks Consensus Estimate by nearly 80%.

Better-than-expected results across those three brands led to revenue of $1.25 billion in the quarter, which surged 178% from last year while eclipsing our expectation by more than 11%. Revenues for each of the brands surged by triple-digit percentages as plenty of people treated themselves and their significant others after emerging from the shutdown.

Most impressively for investors, though, is that CPRI now expects fiscal 2022 earnings at $4.50, instead of the previous expectation at $3.80 to $3.90. Revenues are now expected at $5.3 billion instead of $5.15 billion.

The strong quarter and encouraging outlook convinced analysts to raise their expectations. The Zacks Consensus Estimate for this fiscal year (ending March 2022) is now $4.53, which is 17.7% better than 60 days ago. Expectations for next fiscal year (ending March 2023) is $5.34, up 11.3% in that time and already suggesting year-over-year improvement of nearly 18%.

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ManpowerGroup (MAN)

Not to be too obvious, but focusing on a company like ManpowerGroup (MAN) during an epic economic recovery is kind of a no-brainer. There’s been a great disturbance in this country’s employment… and its time to make up lost ground, as was evidenced by the 943K jobs that were added in July. The staffing firms space is in the Top 12% of the Zacks Industry Rank right now.

And we’re not even close being fully employed… or the Fed would have started tapering weeks ago. That’s where MAN can help. The company is one of the leading providers of innovative workforce solutions and services across the globe. It’s major brands include Manpower (contingent staffing and permanent recruitment); ManpowerGroup Solutions (outsourcing services for large-scale recruiting); and Experis (professional resourcing and project based workforce solutions).

Shares are up 62% over 12 months, including approximately 37% this year alone.

MAN is a big beneficiary of the improving global economic environment, as millions of people look for new or better jobs in their quest to get back to normal. It is seeing increased demand for its services across key markets and brands… which was on full display in its second-quarter report from last month.

Earnings per share of $2.02 beat the Zacks Consensus Estimate by more than 42%. That makes seven straight positive surprises and an average beat of nearly 58% over the past four.

Revenues of $5.28 billion jumped 41% year over year and eclipsed our expectation by 2%. The company is being helped by acquisitions, strong pricing discipline and cost control.

The past 60 days have seen a nice bump in earnings estimates for MAN. The Zacks Consensus Estimate for this year is up 11.2% in that time to $6.96, while next year has advanced 4.7% to $8.48. That suggests year-over-year growth of 21.8%.

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Microchip Technology Incorporated (MCHP): Free Stock Analysis Report
 
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