Argus Recommends Four 'Growth Stocks'

With appreciation of growth stocks outstripping value investments on average so far this year, Argus Research rolled out a list of companies that it says might fill the bill. Citing data from Morningstar, The Wall Street Journal reported recently that the average U.S. large-cap growth fund has risen 18.2 percent in the year to date, while the average U.S. large-cap value fund is up just 10.4 percent. http://www.wsj.com/articles/growth-beats-value-but-investors-dont-seem-to-care-1430709423 Argus published reports on four companies it labeled as "growth stocks," although several on the list recently posted flat or declining revenue. AmerisourceBergen Corp. ABC recently posted 36 percent earnings growth for its fiscal second quarter, and raised its outlook for full-year profits and revenue. Argus' David Toung maintained a Buy rating on AmerisourceBergen and raised his target to $135, saying the company can sustain its recent margin expansion. Information technology management software provider CA Inc. CA got upgraded to Buy from Hold recently by Argus's Jim Kelleher, who said CA can maintain solid results despite a weak environment for mainframe computing revenue. CA posted a 6 percent decline in fiscal fourth-quarter revenue, and earnings fell 10 percent. The company is "working to redesign itself," Kelleher said. The gas and fluid-handling technology concern Colfax Corp. CFX has seen its shares drop more than 6 percent in the past month but Argus' John Eade maintained a Buy rating recently and called the sell-off an opportunity. Recent first-quarter earnings for Colfax fell 16 percent but Eade expects profit growth will run about about 15 percent over the coming several years. TV and Internet content developer Scripps Networks Interactive Inc. SNI has prospects for long-term earnings growth of 12 percent, according to Argus's Joseph Bonner, who maintained a Buy rating on the shares. Scripps Networks recently posted flat quarterly revenue and dwindling ratings for its Food Network. But the company recently acquired a majority stake in the Polish TV company TVN which will boost the contribution of international revenue to 17 percent, from 3 percent.