The Fed announced another 75 bps rate hike on Wednesday to tame the multi-decade high inflation. Moreover, U.S. GDP declined by 0.9% in the second quarter, marking the second straight quarter slump.
Mark Zandi, the chief economist at Moody’s Analytics, said, “We’re not in recession, but it’s clear the economy’s growth is slowing.” However, it seems that investors are looking past the recession worries. Stocks rallied in the last trading session despite the latest GDP contraction, as investors bet the economic downturn would soon cause the Fed to deter from its aggressive stance.
Despite the volatile circumstances, fundamentally strong growth stocks are gaining significant investor attention and outperforming the broader market, as is evident from the SPDR Portfolio S&P 500 Growth ETF’s (SPYG) 9.4% gains over the past month versus SPDR S&P 500 Trust ETF’s (SPY) 6.7% gains.
Given this backdrop, investors could consider buying these monster growth stocks, Core Molding Technologies, Inc. (CMT), Civeo Corporation (CVEO), and Genuine Parts Company (GPC), before it gets too late.
Core Molding Technologies, Inc. (CMT)
CMT and its subsidiaries operate as a molder of thermoplastic and thermoset structural products. It serves various markets, including medium and heavy-duty trucks, automobiles, power sports, construction, agriculture, building products, and other commercial markets in the United States, Mexico, Canada, and internationally.
On May 10, 2022, John Zimmer, Chief Financial Officer, said, “We have made significant progress with raw material cost recoveries and covered the majority of the inflation but expect further improvements.”
He added, “Looking forward, customer demand continues to be strong, and the Company is on track to launch several new programs during the remainder of 2022.”
CMT’s total net sales increased 24.4% year-over-year to $90.59 million for the first quarter ended March 31, 2022. Its net income came in at $3.86 million, up 11.8% year-over-year, while its EPS came in at $0.46, up 12.2% year-over-year. Moreover, its adjusted EBITDA came in at $9.52 million, up 10.7% year-over-year.
CMT’s revenue has increased at a CAGR of 5.3% over the past three years, while its EBITDA has increased at an 80% CAGR over the past three years.
For 2023, analysts expect CMT’s revenue to increase 4.9% year-over-year to $352.30 million. The stock has gained 20.6% year-to-date to close the last trading session at $10.26.
CMT’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which indicates a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
CMT has an A grade for Growth and Value and a B for Sentiment and Quality. Within the A-rated Industrial - Manufacturing industry, it is ranked first among 42 stocks. Click here to see the additional POWR Ratings for Momentum and Stability for CMT.
Civeo Corporation (CVEO)
CVEO provides hospitality services to the natural resource industry in Canada, Australia, and the United States. It owns and operates 27 lodges and villages with around 28,000 rooms; and a fleet of mobile accommodation assets. CVEO serves the oil, mining, engineering, and oilfield and mining service companies.
On July 29, 2022, Bradley J. Dodson, CVEO’s President and CEO, said, “We are excited about our recent integrated services contract award from a copper mining company in South Australia. This contract award is a testament to our integrated services growth and diversification potential as it encompasses a new customer, a new state in Australia and a new commodity.”
CVEO’s revenues increased 20% year-over-year to $184.95 million for the second quarter ended June 30, 2022. Its net income came in at $9.08 million, compared to a loss of $467,000 in the year-ago period. Also, its EPS came in at $0.54, compared to a loss per share of $0.03 in the prior-year period.
CVEO’s revenue has increased at a CAGR of 10.2% over the past three years. Its EBITDA grew at a CAGR of 11.4% for the same period.
Analysts expect CVEO’s revenue to increase 12.1% year-over-year to $666.45 million in 2022. Its EPS is estimated to grow 1,450% year-over-year to $0.54 in 2022. The stock has gained 48.8% year-to-date to close the last trading session at $28.53.
CVEO's overall A rating equates to a Strong Buy in our POWR Ratings system. It has an A grade for Growth and Sentiment and a B for Value and Quality. It is ranked first among 43 stocks in the B-rated Outsourcing - Business Services industry. Click here for additional ratings for CVEO (Momentum and Stability).
Genuine Parts Company (GPC)
GPC distributes automotive replacement parts and industrial parts and materials. It operates through the Automotive Parts Group and Industrial Parts Group segments. GPC serves global customers from a network of more than 10,000 locations in 17 countries.
On April 13, 2022, GPC announced Alliance Automotive Group, GPC’s wholly-owned automotive distribution company based in London, U.K., acquired Lausan Group. With this acquisition, GPC aims to expand its business in the European markets.
For the second quarter ended June 30, 2022, GPC’s net sales came in at $5.60 billion, up 17.1% year-over-year. Its adjusted net income came in at $313.09 million, up 23.9% year-over-year, while its EPS came in at $2.62, up 92.6% year-over-year.
GPC’s revenue has increased at a CAGR of 2.3% over the past three years. Its EPS has increased at a CAGR of 14.2% over the past three years.
GPC’s revenue is expected to come in at $21.50 billion in 2022, representing a 13.9% year-over-year rise. The company’s EPS is expected to increase 14.8% year-over-year to $7.93 in 2022. It surpassed EPS estimates in each of the four trailing quarters. Over the past year, the stock has gained 18.7% to close the last trading session at $149.61.
It’s no surprise that GPC has an overall A rating, equating to a Strong Buy in our proprietary POWR Ratings system. In addition, it has a B grade for Growth, Stability, Sentiment, and Quality.
GPC is ranked #2 out of 68 stocks in the B-rated Auto Parts industry. Click here to see the additional POWR Ratings for GPC (Value and Momentum).
CMT shares were unchanged in premarket trading Friday. Year-to-date, CMT has gained 20.56%, versus a -13.87% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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