Recently, the stock market has been experiencing increased volatility, due to the expectation of the Federal Reserve raising interest rates multiple times this year and the rising geopolitical tensions between Ukraine and Russia. Growth stocks, especially those trading at high valuations, have been the most affected.
However, experts believe the economy will continue witnessing a steady recovery this year. And the expected improvement in corporate earnings should support the performance of growth stocks. According to a FactSet report, the S&P 500 is expected to report an earnings growth of 9% year-over-year in 2022.
That’s why today we're highlighting 4 stocks from our Top 10 Growth screen, which is just 1 of the 10 outperforming screens in our POWR Screens 10 service (more on that below). A.P. Møller - Mærsk A/S (AMKBY), Heidrick & Struggles International, Inc. (HSII), The Hackett Group, Inc. (HCKT), and DLH Holdings Corp. (DLHC) could be great additions to your growth portfolio.
A.P. Møller - Mærsk A/S (AMKBY)
Famous integrated transport and logistics company AMKBY is based in Copenhagen, Denmark. The company is active in container logistics and upstream oil value chains, and its operational structure includes the Maersk Line, APM Terminals, and Damco, Svitzer. Also, AMKBY handles one in every five containers shipped worldwide.
On December 22, 2021, AMKBY announced that it had agreed to acquire Hong Kong-based LF Logistics for $3.60 billion. The acquisition will add hundreds of warehouses in Asia and help it expand beyond its core ocean freight business. AMKBY's Chief Executive Soren Skou said, "Today we mainly help our customers import from Asia, but with this acquisition, we make a big bet on long-term growth in Asia and on offering our customers better access to the Asian consumer."
AMKBY's revenue for the fiscal third quarter ended September 30, 2021, increased 67.5% year-over-year to $16.61 billion. The company's net income increased 422.3% year-over-year to $5.44 billion. In addition, its cash flow from operating activities increased 58.8% sequentially to $6.57 billion.
Analysts expect AMKBY's revenue for the fiscal ending December 31, 2021, to increase 57.7% year-over-year to $62.68 billion. Over the past year, the stock has gained 61.2% to close the last trading session at $17.06.
AMKBY’s revenue has grown at a CAGR of 13.3% over the past three years. The company’s net income grew at a CAGR of 55.7% over the past three years. Also, the company’s levered free cash flow grew at a CAGR of 24.8% over the past three years.
AMKBY's POWR Ratings reflect solid prospects. 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.
It has an A grade for Growth and Momentum and a B grade for Value, Stability, and Quality. It is ranked #1 of 45-stocks in the Shipping industry. Click here to see AMKBY's rating for Sentiment.
Heidrick & Struggles International, Inc. (HSII)
HSII is an advisory firm providing executive search and consulting services to businesses and business leaders worldwide. The company enables its clients to build leadership teams by facilitating senior executives' recruitment, management, and development. It also offers consulting services, leadership, succession planning, talent strategy, people performance, inter-team collaboration, culture shaping, and organizational transformation.
On December 21, 2021, HSII announced that it had agreed to acquire RosExpert in Russia and WE Partners in Ukraine and Kazakhstan. The acquisitions will enable HSII to expand its global footprint and grow its local presence in key strategic markets worldwide.
HSII's net revenue increased 83.8% year-over-year to $263.82 million for the third quarter ended September 30, 2021. The company's operating income came in at $33.34 million, compared to an operating loss of $38.23 million in the year-ago period. Also, its net income came in at $24.49 million, compared to a net loss of $26.17 million in the year-ago period.
For fiscal 2021, HSII's EPS is expected to increase 112.4% year-over-year to $3.76. Its revenue for the quarter ending December 31, 2021, is expected to increase 62.4% year-over-year to $261.40 million. It surpassed Street EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 41% to close the last trading session at $43.30.
HSII’s revenue has grown at a CAGR of 7.8% over the past three years. Its EBITDA has grown at a CAGR of 14.4% over the past three years. Also, the 3-year CAGR of the company’s levered free cash flow was 33.1%.
HSII's strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
It has an A grade for Growth and Value and a B grade for Sentiment and Quality. Within the A-rated Outsourcing – Staffing Services industry, it is ranked first out of 20 stocks. To see the other ratings of HSII for Momentum and Stability, click here.
The Hackett Group, Inc. (HCKT)
HCKT is an intellectual property-based strategic consultancy company. The company's services include benchmarking, executive advisory, business transformation, and cloud enterprise application implementation. It also provides dedicated business strategy, operations, finance, human capital management, strategic sourcing, procurement, and information technology, including Oracle and SAP practices.
On December 14, 2021, HCKT announced its strategic alliance with Anaplan, Inc. (PLAN) that will allow HCKT to deliver finance and supply chain solutions that empower organizations to deliver real-time intelligence to executives, add strategic value to the enterprise, and accelerate best practices implementation utilizing PLAN's leading business performance orchestration platform.
HCKT's net revenue increased 23.5% year-over-year to $71.40 million for the third quarter ended October 1, 2021. The company's net income increased 172.3% year-over-year to $8.13 million. Also, its EPS increased 177.7% year-over-year to $0.25.
Analysts expect HCKT's EPS and revenue for fiscal 2021 to increase 84.1% and 14.6% year-over-year to $1.27 and $274.48 million, respectively. It surpassed consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 31.8% to close the last trading session at $19.11.
HCKT’s EBITDA growth was 80.5% year-over-year. Its levered free cash flow has grown at a CAGR of 21.1% over the past three years. Also, its EBITDA has grown at a CAGR of 4.7% over the past three years.
It's no surprise that HCKT has an overall A rating, which equates to a Strong Buy in our proprietary POWR Rating system. It has an A grade for Growth and Quality and a B grade for Stability and Sentiment. HCKT is ranked first out of 11 stocks in the A-rated Outsourcing – Tech Services industry. Click here to see the other ratings of HCKT for Value and Momentum.
DLH Holdings Corp. (DLHC)
DLHC is a full-service provider of technology-enabled health and human services. The company is focused on three market areas: Defense and Veterans Health Solutions, Human Solutions and Services, and Public Health and Life Sciences. The company provides domain-specific expertise, industry best practices, and innovations such as secure data analytics, case management, performance evaluation, and others.
On October 14, 2021, DLHC announced that it was awarded the contract to provide experienced medical personnel to support COVID-19 community testing and collection, vaccination, and monoclonal antibody therapy throughout Alaska. CEO of DLHC Zach Parker said, "Our company continues to utilize its healthcare delivery expertise in support of the national response to COVID-19."
For the fiscal first quarter ended December 31, 2021, DLHC's revenue increased 163.9% year-over-year to $152.80 million. The company's income from operations increased 211.1% year-over-year to $11.21 million. Also, its adjusted EBITDA increased 131.7% year-over-year to $13.20 million. In addition, its EPS came in at $0.55, representing an increase of 323% year-over-year.
For fiscal 2022, analysts expect DLHC's EPS and revenue to increase 78.7% and 53.6% year-over-year to $1.34 and $378 million, respectively. It surpassed Street EPS estimates in three of the trailing four quarters. Over the past nine months, the stock has gained 56% to close the last trading session at $16.08.
DLHC’s revenue and net income have grown at CAGRs of 35.6% and 36.2%, respectively, over the past three years. Also, its EBITDA has grown at a CAGR of 39.5% over the past three years.
DLHC's strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
It has an A grade for Growth, Value, and Sentiment and a B grade for Quality. Within the B-rated Industrial – Services industry, it is ranked #4 of 93 stocks. To see the other ratings of DLHC for Momentum and Stability, click here.
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AMKBY shares were trading at $17.08 per share on Monday afternoon, up $0.02 (+0.12%). Year-to-date, AMKBY has declined -4.70%, versus a -5.12% rise in the benchmark S&P 500 index during the same period.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.
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