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Number Cruncher

Wanted: Giants with room to grow Add to ...

What are we looking for?

Growth among large capitalization stocks in the United States.

Analysts are calling for S&P 500 companies to boost share profit by 8 per cent in 2012 from last year, and sales per share are expected to rise on average by 5 per cent. We want to see which of the largest companies on the index are most likely to be the engines of that expansion.

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More about today's screen



This screen lists the 25 stocks among members of the S&P 500 that are forecasted to post the biggest revenue in the year ahead. We use Bloomberg estimates for net revenues, or sales from continuing operations, for the next 12 months. We then compare that number to actual sales reported for the trailing 12-month period, giving a third figure, the percentage growth expected.



The list doesn't give an exact calendar year comparison, because companies still have to report results for the completed fourth quarter. That means part of the estimates link back to performance in the last three months of 2011. But the screen still gives a good sense of which are expected to be the fastest expanding companies this year among the biggest of the U.S. large caps.



The price-to-earnings ratios are calculated using current stock prices divided by trailing 12-month earnings per share.



What we found



The stocks are ranked by estimated growth. Apple Inc. tops the bunch with an expected growth rate of 31 per cent. That rate looks particularly appealing when measured next to a PE multiple of just 15.



Apple and Texas-based Valero Energy Corp. are the only two stocks on the list whose PE ratios are less than their expected annual revenue growth rate. Valero, one of the biggest refiners of petroleum products in the U.S., has a PE of just 5 and is forecasted to expand sales by 8 per cent.



Pharmacy giant CVS Caremark Corp., of Woonsocket, R.I., holds second place and also boasts a reasonable PE ratio of 16 per cent, when compared to expected growth of more than 14 per cent.



On Friday, we will look at a similarly constructed screen for Canadian large cap stocks.

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