(This is the first of a three-part series listing the small-cap, mid-cap and large-cap companies included in the S&P 1500 Composite Index that are expected to show the highest increases in sales in 2018.)
Third-quarter earnings season begins next week, and U.S. companies are expected by analysts to report another impressive set of numbers.
Wall Street has had plenty of time to digest the effect of the big cuts in federal income taxes that President Trump signed into law late last year, as well as accelerating economic growth numbers. Here’s a summary of sales and earnings-per-share (EPS) expectations for the three indexes that make up the S&P 1500 Composite Index, based on consensus estimates among analysts:
| Index | Ticker | Estimated increase in sales – third quarter | Estimated increase in sales – 2018 | Estimated increase in EPS – third quarter | Estimated increase in EPS – 2018 | Total return – 2018 through Oct. 1 |
| S&P Small-Cap 600 Index |
SML, -1.07% |
8.6% | 8.8% | 23.0% | 28.0% | 12.9% |
| S&P Mid-Cap 400 Index |
MID, -0.38% |
11.5% | 11.5% | 25.4% | 23.8% | 6.7% |
| S&P 500 Index |
SPX, -0.04% |
9.1% | 8.8% | 24.1% | 23.4% | 11.0% |
| Source: FactSet | ||||||
The S&P Mid-Cap 400 Index
MID, -0.38%
is expected to show the largest increase in sales for 2018. However, companies in the S&P Small-Cap 600 Index
SML, -1.07%
are expected to report the biggest jump in earnings. Smaller U.S. companies tend to have their sales concentrated domestically and have simpler corporate structures — two reasons why they may enjoy greater benefits from the tax cuts.
Expected small-cap sales winners
We ranked companies according to sales, rather than EPS, because any company’s earnings can be distorted by extraordinary expenses or accounting adjustments.
Here are the 20 S&P 600 Small-Cap Index companies expected to achieve the highest increases in sales for 2018:
| Estimated sales | ||||||||
| Company | Ticker | Industry | 2017 | 2018 | 2019 | Sales increase – 2017 | Expected sales increase – 2018 | Expected sales increase – 2019 |
| Regenxbio Inc. |
RGNX, -7.65% |
Biotechnology | $10 | $203 | $13 | 126% | 1857% | -93% |
| Granite Point Mortgage Trust Inc. |
GPMT, -0.16% |
Real Estate Investment Trusts | $39 | $122 | $149 | 93% | 211% | 22% |
| Penn Virginia Corp. |
PVAC, +1.07% |
Oil and Gas Production | $160 | $446 | $624 | 24% | 179% | 40% |
| Rayonier Advanced Materials Inc. |
RYAM, +1.33% |
Chemicals: Specialty | $961 | $2,172 | $2,206 | 11% | 126% | 2% |
| Enanta Pharmaceuticals Inc. |
ENTA, -6.98% |
Biotechnology | $103 | $207 | $209 | 16% | 102% | 1% |
| Progenics Pharmaceuticals Inc. |
PGNX, +0.16% |
Biotechnology | $12 | $23 | $81 | -83% | 94% | 258% |
| Ring Energy Inc. |
REI, -18.12% |
Oil and Gas Production | $67 | $129 | $207 | 116% | 93% | 61% |
| HighPoint Resources Corp. |
HPR, -5.12% |
Oil and Gas Production | $253 | $456 | $811 | 41% | 80% | 78% |
| SRC Energy Inc |
SRCI, -1.24% |
Oil and Gas Production | $363 | $649 | $869 | 238% | 79% | 34% |
| Circor International Inc. |
CIR, -0.55% |
Industrial Machinery | $662 | $1,180 | $1,243 | 12% | 78% | 5% |
| ProPetro Holding Corp. |
PUMP, +1.36% |
Oilfield Services/Equipment | $982 | $1,726 | $1,782 | 124% | 76% | 3% |
| Shutterfly Inc. |
SFLY, -2.65% |
Internet Software/Services | $1,190 | $2,056 | $2,270 | 5% | 73% | 10% |
| LHC Group Inc. |
LHCG, -5.72% |
Medical/Nursing Services | $1,072 | $1,835 | $2,182 | 17% | 71% | 19% |
| Oil States International Inc. |
OIS, +0.63% |
Oilfield Services/Equipment | $671 | $1,119 | $1,264 | -3% | 67% | 13% |
| Ligand Pharmaceuticals Inc. |
LGND, -1.48% |
Biotechnology | $141 | $235 | $210 | 29% | 66% | -11% |
| Extreme Networks Inc. |
EXTR, +0.18% |
Computer Communications | $598 | $983 | $1,004 | 15% | 64% | 2% |
| Corcept Therapeutics Inc.. |
CORT, +1.82% |
Pharmaceuticals: Other | $159 | $261 | $333 | 96% | 64% | 28% |
| Strategic Education Inc. |
STRA, -2.91% |
Other Consumer Services | $455 | $722 | $966 | 3% | 59% | 34% |
| Medifast Inc. |
MED, -1.78% |
Specialty Stores | $302 | $472 | $627 | 10% | 56% | 33% |
| First Financial Bancorp. |
FFBC, -0.41% |
Regional Banks | $360 | $551 | $620 | 8% | 53% | 12% |
| Note: Some 2017 sales figures have been adjusted by analysts for comparison purposes. Source:FactSet | ||||||||
You can click on the tickers for more information about each company, including news, price ratios, financials and charts.
The price of West Texas crude oil
CL1, -0.57%
has risen by about 49% over the past year, so it’s no surprise to see energy companies and related suppliers (such as Circor International
CIR, -0.55%
) well represented in any list of publicly traded companies by sales or earnings growth.
Regenxbio
RGNX, -7.65%
provides an excellent example of why you need to dig deeply to understand large swings in numbers. The company is running several clinical trials, and its revenue for the first quarter increased to $132.4 million from only $455,000 a year earlier because of an amendment to its license agreement with AveXis, which the company described in its May 8 filing. So analysts expect the company’s sales in 2019 to fall much closer to the 2017 level.
Enanta Pharmaceuticals
ENTA, -6.98%
is expected to double its sales this year because of its successful collaboration with AbbVie
ABBV, -0.81%
on HCV regimens. Analysts expect a modest increase in sales during 2019.
If you are interested in any of the companies listed here, it’s important to understand how they are achieving their rapid sales growth and decide for yourself whether the company’s strategy is likely to work over the next five to 10 years.
Analysts’ opinions
Here are total returns for the group, along with summaries of analysts’ ratings and price targets:
| Company | Ticker | Total return – 2018 through Oct. 1 | Share ‘buy’ ratings | Share neutral ratings | Share ‘sell’ ratings | Closing price – Oct. 1 | Consensus price target | Implied 12-month upside |
| Regenxbio Inc. |
RGNX, -7.65% |
126% | 67% | 33% | 0% | $75.15 | $87.58 | 17% |
| Granite Point Mortgage Trust Inc. |
GPMT, -0.16% |
12% | 57% | 43% | 0% | $18.66 | $19.50 | 5% |
| Penn Virginia Corp. |
PVAC, +1.07% |
106% | 100% | 0% | 0% | $80.60 | $101.60 | 26% |
| Rayonier Advanced Materials Inc. |
RYAM, +1.33% |
-11% | 100% | 0% | 0% | $18.02 | $26.33 | 46% |
| Enanta Pharmaceuticals Inc. |
ENTA, -6.98% |
43% | 33% | 67% | 0% | $84.11 | $100.67 | 20% |
| Progenics Pharmaceuticals Inc. |
PGNX, +0.16% |
3% | 100% | 0% | 0% | $6.15 | $12.20 | 98% |
| Ring Energy Inc. |
REI, -18.12% |
-23% | 100% | 0% | 0% | $10.65 | $18.70 | 76% |
| HighPoint Resources Corp. |
HPR, -5.12% |
-5% | 80% | 20% | 0% | $4.88 | $9.15 | 88% |
| SRC Energy Inc. |
SRCI, -1.24% |
4% | 60% | 40% | 0% | $8.87 | $14.48 | 63% |
| Circor International Inc. |
CIR, -0.55% |
-3% | 80% | 20% | 0% | $47.31 | $53.60 | 13% |
| ProPetro Holding Corp. |
PUMP, +1.36% |
-16% | 76% | 24% | 0% | $16.91 | $20.88 | 23% |
| Shutterfly Inc. |
SFLY, -2.65% |
32% | 40% | 60% | 0% | $65.65 | $99.00 | 51% |
| LHC Group Inc. |
LHCG, -5.72% |
66% | 91% | 9% | 0% | $101.60 | $109.20 | 7% |
| Oil States International Inc. |
OIS, +0.63% |
18% | 22% | 72% | 6% | $33.30 | $34.67 | 4% |
| Ligand Pharmaceuticals Inc. |
LGND, -1.48% |
99% | 71% | 29% | 0% | $272.13 | $255.67 | -6% |
| Extreme Networks Inc. |
EXTR, +0.18% |
-56% | 60% | 40% | 0% | $5.53 | $9.38 | 70% |
| Corcept Therapeutics Inc.. |
CORT, +1.82% |
-24% | 40% | 40% | 20% | $13.75 | $16.70 | 21% |
| Strategic Education Inc. |
STRA, -2.91% |
53% | 100% | 0% | 0% | $136.17 | $160.50 | 18% |
| Medifast Inc. |
MED, -1.78% |
218% | 67% | 33% | 0% | $219.67 | $229.00 | 4% |
| First Financial Bancorp. |
FFBC, -0.41% |
13% | 33% | 56% | 11% | $29.09 | $33.63 | 16% |
| Source: FactSet | ||||||||
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Source : MTV
