Each month, we highlight two stocks selected as good bets by a premier analyst. The selections are based on several factors including growth potential, valuation, sector trends, competition, and dividends.
This month's guest analyst is Louis Navellier, editor of Louis Navellier's Emerging Growth, an investment newsletter that was rated No. 1 for total return performance for 20 years by The Hulbert Financial Digest through February 2006.
Hansen is no overnight success story. The company was incorporated in 1990 and as recently as August 2003, the stock sold for less than $5 a share. Now it's $195 a share. During the past four quarters, its sales rose nearly 95 percent, and the company reported that fourth-quarter net income more than doubled from the prior year. This hot little equity was even honored with the top slot on Forbes' list of the 200 Best Small Companies in 2005, a huge step up from 56th place in 2004.
"By packing certain products outside the West Coast region and closer to where they're sold," says Navellier, "the California-based company is able to streamline freight costs." Hansen's enormous recent success is also due in part to a 55 percent increase in marketing expenditures for 2005. "The sales programs are expected to continue this year," enthuses Navellier. Hansen renewed its agreement for 2006 to be a sponsor for the Las Vegas Monorail, which includes the right to sell its Monster Energy drinks and sodas at all stations.
Navellier suspects an acquisition is likely. Red Bull and Anheuser-Busch are reported to be potential suitors.
JLG manufactures and sells access equipment for both nonresidential and residential construction. Its primary products are aerial work platforms-which lift both people and material-and telescopic handlers, or telehandlers, which are essentially forklifts that can lift as much as six tons. Customers include rental companies and others in the industrial, commercial, institutional, and construction markets.
"JLG is essentially a monopoly," notes Navellier, who feels the company is an outstanding buy. "I know of no other company that's effectively competing with them in the vertical lift business. With their well-engineered specialty lifts and extensive marketing and support, JLG is essentially a niche company that dominates the field." And, he adds, it recently beat Wall Street's estimates for earnings per share and sales.