Growth stocks are known for their outperformance when compared with benchmark indexes like the S&P 500. The IBD 50 growth stock list has a few surprising outperformers.
Discount retailer Miniso is building support at the 50-day moving average as the stock forms a base with a buy point of 29.92, according to IBD MarketSmith. Miniso is today's selection for IBD 50 Stocks To Watch.
The company went public in October 2020 and quickly scaled up to an all-time high 35.21. The growth stock has gained a staggering 166% so far this year, trouncing the S&P 500's gain of 17%.
Sales have accelerated over the past two quarters. Sales grew 30% to $448.4 million in the fiscal fourth quarter ended June 30, while earnings per share of 25 cents showed an impressive 131% increase.
China-based Miniso runs directly operated as well as third-party stores under the brand names Miniso and Top Toy. Gross margins expanded to 39.8% from 33.3% in the prior-year period. The increase was due to cost saving measures, new product launches in its Miniso brand and a higher-margin product mix in Top Toy.
For the full fiscal year, sales grew 13.8% to $1.6 billion.
During the quarter, the company opened 277 new stores, taking total new stores for the year to 592.
Shares gapped up amid a rebound from the 10-week moving average on Aug. 22 after the September-ended quarter results came out.
Growth Stock Reports Tuesday
Fiscal first-quarter results are due Tuesday. Analysts polled by FactSet expect sales of $522 million for an increase of 34%, and earnings per share of 25 cents, which would be a 32% increase from the year-ago period.
Minoso ranks first in the discount and variety retail industry group. Strong IBD ratings also support the stock's price action. MNSO has a Composite Rating of 98 and an EPS Rating of 99. The Relative Strength Rating is also a sign of strength at 98.
The growth stock boasts an Accumulation/Distribution Rating of A-.
Mutual funds have been net buyers of the stock in the past four quarters.
Funds hold 42% of shares outstanding of Miniso. Exchange traded funds holding MNSO stock include Invesco Golden Dragon China ETF and the First Trust International Equity Opportunities ETF.
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