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Should You Bet on These High
Don't Miss:Spurs Nation32nd annual Tejano ConjuntoPub Crawl: Little Red BarnmySpy: Twisted Taco Truck ThrowdownElection resultsComics GamesOpinion HomeColumnistsCommentaryEditorialsLetters to the EditorAutomotiveEagle FordColumnistsNational/InternationalReal EstateSalary WizardPress releasesTop Work PlacesSponsored ContentRecent StoriesRestaurant SearchRestaurant News and ReviewsRecipesProponents of income investing may not like it,[url=http://www.floware.fr]michael kors paris[/url], but there is nothing like a growth portfolio, portions of which can be sold at higher pricesto rival the benefits of a dividend portfolio. Buying at lower prices is also an effective strategy for stocks such asGilead Sciences (NASDAQ: GILD), Oasis Petroleum (NYSE: OAS), andInteractive Brokers which offer excellent earnings potential. Here is a closer look at these companies.
Gilead Sciences still going strong
Gilead Sciencesis a biopharmaceutical company that develops medicines for human immunodeficiency virus (HIV), liver diseases, such as hepatitis B and hepatitis C and cardiovascular and respiratory conditions. With a market capitalization of $37 billion, the stock is among the most heavilytraded securities, and thus it comes as something of a surprise that its price has doubled over the last 12 months.
This surge has been aided by strong earnings results and encouraging updates of its drugdevelopment program. In its latest update, the company reported results from four phase III studies named Neutrino, Fission, Positron and Fusion. The studies used the drugs on patients suffering from various genotypes of the chronic hepatitis C virus.
In the quarter ended Dec. 31, the company reported a 17.7% jump in revenue but it was the surge in net profit from $665 million to $762.5 million which made the market players buy this stock aggressively.
It has advanced 37% so far in 2013 and still trades at a forward pricetoearnings ratio of 17.6. Strong earnings visibility and a simplified capital structure are some of the factors that make analysts rate the stock as 'Buy' or 'Outperform.'
Another attractive area to look for bargains is oil and gas exploration and production where stocks have lately taken a beating following the drop in crudeoil prices. TexasbasedOasis Petroleumis an exploration and production company focused on shale resources in the Montana and North Dakota regions of the Williston Basin.
The stock has dropped 11% over the month and now trades at attractive earnings multiples of 21 and 10.6 on a trailing 12months and forward basis, respectively.
The forwardearnings multiple of 10.6 may not be foolproof, as this is evidently based on high oilprice expectations, but a low debttoequity ratio of 1.5 (going by the standards in the sector) offers some cushion to future earnings. This capital structure appears simple considering the fact that the company has grown its top line from $37 million in 2009 to $686.7 million in 2012. Profits have also grown in a linear fashion, and so far its trajectory looks uninterrupted.
Interactive Brokers brings you across the globe
Finally,Interactive Brokersis a global electronic broker that offers its services on more than 100 electronic exchanges including in Canada, England, Switzerland, Hong Kong, India, Australia and Japan. Trading at a pricetoearnings multiple of 19.6, the stock is placed at the upper range of its 52week trading range of $12.74 to $15.24.
However, future earnings visibility makes the earnings multiple drop considerably to 12.9. PE growth of approximately 1.8 and a nodebt balance sheet are other positives with the stock. At the same time, its price is only a 19% premium on the book value, while pricebysales ratio indicates a discount of 35%. The company also has a decent dividend yield of 2.7%, which is expected to at least continue in the future, if not grow.
Overall, these high growth stocks are good fit for a growthoriented portfolio, but may be selling at slightly high prices, as is the case with Interactive Brokers.