Investors in the S&P 500 have no idea what the Fed will do this week. But they think one thing’s for sure: Some companies’ business is in full swing right now.
Nine companies in the S&P 500 – including Norwegian Cruise Line (NCLH), Cotra Energy (CTRA) and In-phase energy (ENPH) – In the coming third quarter, they are expected to double their revenue from a year earlier, according to an Investor’s Business Daily analysis of S&P Global Market Intelligence and MarketSmith data. It’s not just impressive revenue growth. In addition, the bottom line of all companies should also show growth.
“While we wouldn’t rule out testing the June S&P 500 low, we would view it as a potential buying opportunity and focus on areas that reflect a potential downside in economic growth and earnings,” Chief Investment Officer Megan Homan Represented at Verdence Capital Advisors.
Find S&P 500 companies with explosive growth
Identifying fast-growing companies in the S&P 500 has become increasingly difficult. But it’s still possible.
There are only two weeks left in the crucial third quarter. Analysts already think S&P 500 companies will see revenue rise just 8.7% over the period, said John Butters, earnings strategist at FactSet. That would be a big disappointment. If the company’s revenue only grew that much, “it would mark the first time the index has reported revenue growth below 10% since 2020 (Q4) (up 3.2%),” Butters said.
The company’s revenue forecast is falling in the face of major headwinds such as inflation and rising interest rates. “Estimated (year-on-year
2022 third quarter revenue growth rate is now lower than at the beginning of the third quarter,” Butters said.
But you can still find some S&P 500 companies that provide a lot of data.
Big growth on the high seas
If you’re looking for companies to enable jets in the third quarter, keep an eye out for cruise operators.
All three of the cruise lines in the S&P 500, especially Norwegian Cruise Line, are expected to see big revenue growth in the third quarter. None of them had a growth rate below 550%. That’s impressive considering the S&P 500’s revenue growth probably won’t hit double-digit percentages.
Just look at Norwegian. Analysts believe the company, which has nearly 30 ships, will see revenue rise 938% in the quarter. If they’re right, that means the company’s revenue will hit $1.6 billion, up from $153 million in the coronavirus-ravaged third quarter last year.
Notably, shares in Norway are still down more than 26% this year. Shares of all other cruise ship operators have also fallen this year. Why? Nervous investors also want to see continued profitability that has been lost at sea for years.
While Norwegian’s bottom line will be more than 200% higher than in the third quarter of last year, analysts say the company still expects a loss of 65 cents per share. Meanwhile, Carnival is forecasting a loss of 15 cents a share for the quarter, and its shares are down 46% this year. However, Royal Caribbean earned 19 cents a share in the quarter, thanks to a 554% increase in revenue. But shares are still down 34% this year.
Energy stocks are hot
In the S&P 500, power is also shining. What type is almost irrelevant.
Coterra Energy, an oil and gas exploration company, is profiting from rising energy costs. Analysts believe the S&P 500 company’s third-quarter revenue will rise nearly 400%. Coterra also posted profit growth. Analysts believe the company’s profit will soar 158% in the current quarter. Strong revenue coupled with profit growth? Check. That helps explain why shares are up 52% this year.
But it’s not just fossil fuels. Enphase Energy, a high-tech solar equipment company, expects revenue to rise 75% in the third quarter. Profits are expected to grow by 82% during the period. Given how scarce it is, investors are willing to pay for that growth. Shares of the company are up nearly 73% this year.
So yes, many S&P 500 companies are slowing down. But that didn’t stop some people from turning on the jet.
S&P 500 companies are growing like crazy
All of these companies posted more than 75% revenue growth in the third quarter
|company||stock code||Revenue Growth (Estimated Q3 2022)||EPS growth (expected Q3 2022)||department|
|Norwegian Cruise Line||(NCLH)||937.8%||207.6%||consumer discretionary|
|carnival||(Copper Clad Laminate)||799.2||163.4||consumer discretionary|
|Royal Caribbean Cruises||(RCL)||554.4||335.3||consumer discretionary|
|VICI properties||(VICI)||94.4||72.2||real estate|
|Live National Entertainment||(LYV)||86.2||450.9||communication service|
|In-phase energy||(ENPH)||75.0||81.7||information Technology|