3 Oversold Growth Stocks That are Screaming Buys: ICU Medical, KBR, and AMN Healthcare Services
Rising concerns over mounting inflationary pressure and the Fed’s signal that it will raise interest rates several times this year are expected to fuel market turbulence in the near term....
Rising concerns over mounting inflationary pressure and the Fed's signal that it will raise interest rates several times this year are expected to fuel market turbulence in the near term. So, we think it could be wise to bet on quality growth stocks KBR (KBR), AMN Healthcare (AMN), and ICU Medical (ICUI), which have been oversold of late. Read on.
The stock market continues to be volatile, primarily on investors' concerns over record-high inflation, the Fed's indication of multiple interest-rate hikes this year, and supply chain bottlenecks. Furthermore, the United Nations has warned that the global economic recovery is losing steam and is facing significant headwinds amid the COVID-19 pandemic. In addition, the decline in private payrolls in January and poor labor market data are further fueling stock market volatility. The International Monetary Fund (IMF) downgraded its 2022 global growth forecast to 4.4%.
However, we believe growth stocks could be ideal bets now for investors looking to maximize their returns over the long run. Investors' interest in growth stocks is evident in the SPDR Portfolio S&P 500 Growth ETF's (SPYG) 14.4% gains over the past year.
Quality growth stocks KBR, Inc. (KBR), AMN Healthcare Services, Inc. (AMN), and ICU Medical, Inc. (ICUI) have witnessed significant price declines recently because investors oversold these stocks on short-term concerns. However, given their upside potential, we think it could be wise to bet on these stocks now.
KBR, Inc. (KBR)
KBR in Houston, Tex., is a global provider of scientific, technical, and engineering solutions to governments and companies. Government Solutions; Technology Solutions; and Energy Solutions are the segments under which the company operates. KBR also provides commercial security, defense systems, program management, cybersecurity, and other solutions.
Last month, KBR was selected as the primary provider of space medicine services for the European Space Agency's (ESA's) European Astronaut Centre (EAC) Space Medicine Office in Cologne, Germany. KBR will provide astronauts' medical care, engineering support, rehabilitation, fitness, project management, healthcare administration, psychology and behavioral health, nutrition, radiation, education coordination, and operational research.
KBR's revenues increased 33.6% year-over-year to $1.84 billion for the third quarter, ended Sept. 30, 2021. The company's gross profit grew 12.2% from its year-ago value to $193 million. KBRs operating income rose 8.6% from the prior-year quarter to $101 million. Also, the company's adjusted EBITDA increased 29.6% year-over-year to $162 million.
KBR's consensus revenue is expected to increase 28.47% year-over-year to $1.88 billion in its fiscal period ending March 31, 2022. The company has an impressive earnings surprise history; it beat the consensus EPS estimates in three of the trailing four quarters. In addition, its EPS is expected to increase 36.4% in the current year. The stock has gained 47.8% in price over the past year. However, the stock has declined 6.7% over the past month.
KBR's strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
Also, the stock has an A grade for Growth. We've also graded KBR for Stability, Sentiment, Quality, Value, and Momentum. Click here to access all of KBR's ratings. KBR is ranked #29 of 93 stocks in the B-rated Industrial – Services industry.
AMN Healthcare Services, Inc. (AMN)
AMN in San Diego, Calif., provides healthcare workforce solutions and staffing services in hospitals and other healthcare facilities throughout the United States. The company operates through three segments: Nurse and Allied Solutions; Physician and Leadership Solutions; and Technology and Workforce Solutions. Also, AMN offers managed services programs, language interpretation services, vendor management systems, workforce optimization, and other digital services.
During the third quarter, ended September 30, 2021, AMN's revenue increased 59.1% year-over-year to $877.8 million. The company's gross profit grew 65.7% from the year-ago value to $305.87 million. Its income from operations rose 127.8% from the prior-year quarter to $105.83 million. Also, the company's net income increased 184% year-over-year to $74.02 million.
AMN's consensus revenue is expected to increase 29.1% year-over-year to $1.14 billion for its fiscal period ending March 31, 2022. In addition, AMN has an impressive earnings surprise history; it beat the consensus EPS estimates in each of the trailing four quarters. Moreover, its EPS is expected to grow 116% in the current year. The stock has declined 13.3% in price year-to-date. However, it has increased by 30.4% over the past nine months.
AMN's POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. Also, the stock has an A grade for Growth and a B grade for Sentiment and Value.
ICU Medical, Inc. (ICUI)
ICUI provides medical devices used in infusion therapy and critical care applications worldwide. The San Clemente, Calif.-based company's product portfolio includes IV solutions, IV smart pumps with pain management and safety software technology, dedicated and non-dedicated IV sets, and needle-free connectors designed to help meet clinical safety and workflow goals. ICUI sells its products to acute care hospitals, wholesalers, ambulatory clinics, and alternate site facilities.
Last month, ICUI acquired Smiths Medical from Smiths Group plc. With this acquisition, both companies should represent an infusion therapy company with estimated pro forma combined revenues of approximately $2.5 billion. The addition of Smiths Medical could also create a scaled U.S.-based global competitor that increases the stability of the medical supply chain and can grow as clinical care models evolve.
ICUI's total revenues increased 5.5% year-over-year to $336.06 million for the third quarter, ended Sept. 30, 2021. The company's gross profit grew 12.2% from its year-ago value to $127.79 million. Its income from operations rose 50.3% from the prior-year quarter to $38.38 million. Also, the company's net income increased 24.4% year-over-year to $31.08 million.
For its fiscal year 2022, analysts expect ICUI's revenue to increase 4% year-over-year to $1.31 billion. It has surpassed the consensus EPS estimates in each of the trailing four quarters. In addition, the company's EPS is estimated to increase 1.1% in the current year. The stock has declined 12.3% in price over the past three months. However, it has gained 10.4% over the past six months.
It's no surprise that ICUI has an overall A rating, which equates to a Strong Buy in our POWR Rating system. Also, the stock has an A grade for Growth and a B grade for Sentiment and Quality.
What To Do Next?
If you'd like to see more top growth stocks, then you should check out our free special report:
What makes them "MUST OWN"?
All 9 picks have strong fundamentals and are experiencing tremendous momentum. They also contain a winning blend of growth and value attributes that generates a catalyst for serious outperformance.
Even more important, each recently earned a Buy rating from our coveted POWR Ratings system where the A rated stocks have gained +31.10% a year.
Click below now to see these top performing stocks with exciting growth prospects:
KBR shares were trading at $44.33 per share on Friday morning, down $0.59 (-1.31%). Year-to-date, KBR has declined -6.91%, versus a -5.54% rise in the benchmark S&P 500 index during the same period.
About the Author: Priyanka Mandal
Priyanka is a passionate investment analyst and financial journalist. After earning a master's degree in economics, her interest in financial markets motivated her to begin her career in investment research.
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