The stock market has been extremely volatile over the past months, owing to concerns about the Federal Reserve's interest rate hikes, lingering supply chain disruptions, and a potential economic recession.
However, resilient consumer spending and better than expected earnings season restored investor confidence in the market, allowing benchmark indexes to rebound occasionally.
Despite the uncertainty, substantial investments and a greater emphasis on encouraging domestic production should benefit growth-focused companies significantly. Investors’ interest in the growth stocks is evident from the iShares Russell 1000 Growth ETF (IWF) 11.1% gains over the past month.
Therefore, we think it could be wise to add fundamentally sound quality growth stocks Hugo Boss AG (BOSSY), CTS Corporation (CTS), J.Jill Inc. (JILL), and Mannatech Incorporated (MTEX) to your portfolio now.
Hugo Boss AG (BOSSY)
BOSSY and its subsidiaries design, market, and distribute clothing, shoes, and accessories for men and women worldwide. Under the BOSS and HUGO brand names, the company markets and sells its products through online stores, freestanding stores, shop-in-shops, and factory outlets. It had 1,228 retail points of sale as of December 31, 2021.
During the second quarter ended June 30, 2021, BOSSY’s revenue increased 40% year-over-year to €878 million ($893.69 million). The company’s operating income increased significantly year-over-year to €100 million ($101.79 million) over this period. Its net income increased 152.2% year-over-year to €58 million ($59.03 million).
Its revenue and EBITDA grew at CAGRs of 5.3% and 6%, respectively, over the past three years.
BOSSY's POWR Ratings reflect this promising outlook. The company has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
BOSSY has also rated an A grade for Growth and Quality and a B for Value. Within the Fashion – Luxury industry, it is ranked #2 of 67 stocks. Click here to see additional POWR Ratings for Momentum, Stability, and Sentiment for BOSSY.
CTS Corporation (CTS)
CTS is a leading designer and manufacturer of products that Sense, Connect, and Move. The company manufactures sensors, actuators, and electronic components and sells engineered products to customers in North America, Europe, and Asia in the aerospace/defense, industrial, medical, and transportation markets.
In June, CTS completed the previously announced cash acquisition of Ferroperm Piezoceramics from Meggitt PLC for 525 million Danish Krone, subject to customary net debt, working capital adjustments, and other terms and conditions of the Definitive Share Purchase Agreement.
CTS’ net sales increased 11.9% year-over-year to $144.98 million in the second quarter ended June 30, 2021. Its operating income grew 10.2% year-over-year to $22.86 million. The company reported a net income of $12.59 million, representing a significant increase from the year-ago value. Its EPS amounted to $0.39.
Its revenue increased at a CAGR of 6.1% over the past five years, and its levered free cash flow increased at an annualized rate of 40.2% over the past three years.
The stock has gained 16.8% over the past year and 20.6% over the past month.
Analysts expect CTS' revenue to increase 15.6% year-over-year to $593.18 million in fiscal 2022. Its EPS is expected to increase 30.6% from the prior-year quarter to $2.52. Over the past year, the stock has gained 155.8%. In addition, the stock has returned 124.5% so far this year.
CTS’ strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. CTS also has an A grade for Growth and Quality and a B for Sentiment. The stock is ranked #3 of 47 stocks in the Technology – Electronics industry.
Beyond the POWR Ratings grades I have just highlighted, you can see the CTS ratings for Stability, Momentum, and Value.
J.Jill Inc. (JILL)
JILL operates as an omnichannel retailer of women's apparel under the J.Jill brand in the United States. The company sells knit and woven tops, bottoms, dresses, sweaters, and outerwear; footwear; and accessories such as scarves, jewelry, and hosiery. The company sells its products through retail stores, a website, and catalogs. It operated 253 stores as of March 22, 2022.
JILL is reimagining how it serves women in the retail industry with the launch of Welcome Everybody, a new online and in-store shopping experience this month that celebrates the totality of all women and marks a watershed moment in the brand's evolution.
For the first quarter ended April 30, 2022, JILL’s net sales increased 21.7% year-over-year to $157.07 million. Its operating income grew 174.9% from the year-ago value to $23.89 million. The company’s net income came in at $14.42 million, compared to a net loss of $1831 million in the prior-year quarter. Its EPS amounted to $1.02.
JILL’s EPS is expected to increase 25.4% year-over-year to 2.67 in fiscal 2023. In addition, analysts expect its revenue to grow 5.4% to $616.8 million in the current year. The stock has returned 4.1% over the past six months.
Its levered FCF and EBITDA increased at CAGRs of 28.2% and 5.4%, respectively, over the past three years.
JILL's POWR Ratings reflect this promising outlook. The company has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. JILL also rated an A grade for Growth, Sentiment, and Quality.
Within the Fashion & Luxury industry, it is ranked #1. Click here to see additional POWR Ratings for Momentum, Value, and Stability for JILL.
Mannatech Incorporated (MTEX)
MTEX is a global health and wellness company. It creates, markets, and sells nutritional supplements, topical, skincare, anti-aging, and weight-management products. The majority of the company's products are sold directly, as well as through e-commerce and network marketing channels.
MTEX’s revenue came in at $32.38 million in the first quarter ended March 31, 2022. Its gross profit came in at $25.29 million. The company reported a net income of $134 million, while its EPS amounted to $0.06.
Its EBIT increased at a CAGR of 46.6% over the past three years. MTEX’s shares have gained 12.9% over the past month.
It is no surprise that MTEX has an overall A rating, which equates to Strong Buy in our POWR Ratings system. The stock also has an A grade for Growth, Value, and Quality. In the Consumer Goods industry, it is ranked #1 of 70 stocks.
In addition to the POWR Ratings grades I have just highlighted, you can see the MTEX ratings for Momentum, Stability, and Sentiment.
BOSSY shares were trading at $11.68 per share on Monday afternoon, down $0.10 (-0.85%). Year-to-date, BOSSY has declined -1.47%, versus a -12.45% rise in the benchmark S&P 500 index during the same period.
About the Author: Pragya Pandey
Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate.
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