HomeNews & updatesShutterstock Among This Week’s Small And Mid-Cap Securities - Forbes

Shutterstock Among This Week’s Small And Mid-Cap Securities – Forbes

stock market data graph
Every week, Q.ai brings you a sneak peek at various thematic screens, courtesy of Forbes AI Investor. From large-caps to small-caps to industrials, we bundle up the best and brightest stocks to give you a glimpse of the various buckets that may be your next big diversification move.
This week, we’re focusing on “SMID” stocks, or small-to-mid-cap securities. These companies have market capitalizations between $300 million and $10 billion and provide fewer macroeconomic risks to investors than their large-cap international counterparts.
That said, despite their cruciality to the economy (and many a portfolio’s short-term growth performance), they’re also less liquid, more volatility, and more inherently risky than many other stocks on the market. For that reason, some investors limit their exposure – or bypass SMID caps almost entirely – and instead focus on the biggest names in the game, while others focus exclusively on risky growth opportunities to enhance their gains.
While either method can have its merits for the right investor, we’re not advocating either play as a blanket approach. Instead, we believe that with the right allocation, you can meet your investment needs while catering to your risk tolerance. And a smattering (or a pouring) of SMID cap stocks may be just what you want to reach your goals.
Forbes AI Investor
Q.ai runs daily factor models to get the most up-to-date reading on stocks and ETFs. Our deep-learning algorithms use Artificial Intelligence (AI) technology to provide an in-depth, intelligence-based look at a company – so you don’t have to do the digging yourself.
Sign up for the free Forbes AI Investor newsletter here to join an exclusive AI investing community and get premium investing ideas before markets open.
Shutterstock, Inc surged 2.7% Friday to $106.11 per share, ending the day with 155k trades on the docket. The stock is trading around $2 over its 22-day average and up 48% for the year at 37.6x forward earnings.
Shutterstock is a global provider of stock images, music, and editing tools for artists, businesses, and entrepreneurs alike. Their enormous library of royalty-free content became especially popular during the pandemic as the world moved online, and their share prices have continued to benefit on the back of their popularity.
The company recently made headlines when it announced an API integration with OpenText, which will provide Shutterstock Enterprise and OpenText customers with direct access to over 380 million high-quality images. The integration is just one of a handful of strategic partnerships and business arrangements the company has made in the last 12 months to capitalize on its newfound popularity.
Shutterstock 5-year performance
Over the last few years, Shutterstock’s revenue has grown 15.4% to $666.7 million in the most recent fiscal year compared to $623.3 million three years ago. In the same period, operating income shot up 268%, growing from $35.6 million to $90.7 million, while per-share earnings saw an 87.8% change from $1.54 to $1.97.
Currently, Shutterstock is expected to notch around 3.8% revenue growth in the next 12 months. Our AI rates the media company as a positive investment overall, with As in Technicals, Growth, and Low Volatility Momentum – though it earned an F in Quality Value.
Tegna, Inc slipped 1.1% to $17.34 per share on Friday, closing at the bell with 661k trades to its name. The stock is trading 20 cents below its 22-day price average, though it remains up 24.3% for the year. Currently, Tegna trades at 7.7x forward earnings.
Tegna is a broadcast, digital media, and marketing services company headquartered in Virginia. This SMID-cap stock is the product of a company split in 2015 when the Gannett Company GCI.I separated into two publicly traded entities.
Currently, Tegna operates 64 television stations and two radio stations in 51 geographic markets across the United States, boasting 75 million adult viewers across its digital platforms every month. Tegna also owns both the True Crime Network and Quest, featuring ad-supported programming such as true-crime, investigation, science, and adventure-reality programming.
Tegna recently released its Q2 2021 earnings, marking 27% YOY revenue growth to $733 million. The company pulled a net income of $107 million and ended with $3.5 billion in debt.
Tegna 5-year performance
In the last three fiscal years, Tegna’s revenue has grown 42% from $2.2 billion to $2.94 billion. In the same three-year period, operating income expanded 48.3% to $895 million compared to $691 million. Moreover, per-share earnings surged 44% to $2.19 compared to $1.87, though return on equity fell substantially from 34.4% to 23.4%.
At this time, Tegna is expected to see around 4.6% revenue growth in the next year. Our AI rates Tegna as a mixed bag: A in Technicals and Growth and F in Low Volatility Momentum and Quality Value.
Hawaiian Electric Industries, Inc nudged up 0.5% on Friday, closing out the week at $44.72 per share with 691k trades on the docket. The stock is up 26.4% for the year and currently trades at 23.4x forward earnings.
Hawaiian Electric Industries, or HEI, is the largest supplier of electricity in the state of Hawaii (though, unusually, it also owns a financial institution – American Savings Bank). The company powers 95% of Hawaii’s population through its subsidiaries, employing around 2,000 people. Currently, the only Hawaiian island not powered by HEI is Kauai.
HEI made headlines last week when the company announced that it would pay customers to add battery storage to new or existing rooftop solar systems. This one-time cash incentive is part of the company’s plan to promote its clean energy goals of 100% renewable and clean electricity by the year 2045. The program also encourages individuals to take charge of their own electric needs and storage to prevent the occurrence and prevalence of system-wide blackouts.
Hawaiian Electric Industries 5-year performance
Over the course of the last three years, Hawaiian Electric’s revenue has shrunk slightly from $2.86 billion to $2.58 billion, while operating income has fallen to $308 million compared to $327.4 million. In the same period, EPS slipped four cents to $1.81, while return on equity nudged down from 9.3% to 8.4%.
All told, this electric company is expected to experience around 3.2% revenue growth in the next year. Our AI rates Hawaiian Electric as a worthwhile investment overall, with As in Technicals, Growth, and Quality Value – though it did earn an F in Low Volatility Momentum.
Gates Industrial Corporation plc nicked up 0.6% to $16.70 on Friday, trading 5 million shares to a final price that rests up 30.9% for the year. Gates Industrial trades at 11.6x forward earnings.
Gates is a global manufacturer of power transmission and fluid power products. The company produces a diverse range of original and specified components for end markets such as agriculture, construction, energy, and manufacturing. Gates also produces power fluids for a number of commercial and consumer applications like printers, vacuum cleaners, power washers, and of course, transportation. This SMID-cap stock boasts an enormous international reach of 128 markets in four commercial regions.
On 9 August, Gates reported its Q2 2021 earnings results, noting net sales of $915 million and an adjusted net of $125.6 million. The company also reported $0.42 per diluted share and an adjusted EBITDA of $216 million. Gates noted that the quarter was “quite challenging” for the company, with issues such as raw material, labor, and freight availability shortages cropping up.
Gates Industrial performance since 2019 IPO
But in the last three fiscal years, Gates’ revenue has actually shrunk from $3.35 billion to $2.79 billion, while operating income was cut nearly in half from $516 million to $271.6 million. In the same period, per-share earnings plunged to 27 cents compared to 84 cents. Return on equity also decreased in the last three years from 14.4% to 2.9%.
All told, Gates Industrial Corporation is expected to see around 3.2% revenue growth in the next year. Our AI rates this SMID-cap stock as a positive investment at this time, with As in Technicals, Growth, and Quality Value, and an F in Low Volatility Momentum.
TrueBlue, Inc slipped 0.5% to $26.22 on Friday, ending the trading session with 77.3k shares changing hands. The stock is up 40.3% for the year and currently trades at 14x forward earnings.
TrueBlue is in the industry of helping other industries staff their workforces. The company’s staffing, recruiting, and management enterprises service niches such as financial services, pharmaceuticals, the transportation sector, and construction and energy companies. TrueBlue offers companies access to “general and skilled tradespeople” in 300 markets around the world via three companies: PeopleReady, PeopleManagement, and PeopleScout. In 2020, the company claims to have placed 490,000 people and served a total of 99,000 clients.
TrueBlue hit the news in late July when it announced its Q2 2021 earnings results. The company reported a total revenue of $516 million, or 44% change YOY, with a net income of $16 million or 45 cents per diluted share. The company’s PeopleReady pulled in the greatest revenue of $299 million for the quarter, with PeopleManagement netting $152 million and PeopleScout bringing in $64 million.
TrueBlue 5-year performance
Over the last three fiscal years, TrueBlue’s revenue shrank from $2.5 billion to $1.85 billion, while operating income fell from $76.6 million to an abysmal $0.61 million. However, thanks to a share repurchase program in Q1 2021, the company’s per-share earnings actually rose from $1.63 three years ago to $4.01 in the most recent fiscal year, while return on equity more than doubled from 11.5% to 26.7%.
At this time, TrueBlue is expected to see around 4.1% revenue growth in the next year. Our AI rates this company as a mixed bag of an investment with As in Technicals and Quality Value and Fs in Growth and Low Volatility Momentum.
Liked what you read? Sign up for our free Forbes AI Investor Newsletter here to get AI driven investing ideas weekly. For a limited time, subscribers can join an exclusive slack group to get these ideas before markets open.
Source: S&P Global Market Intelligence


- Advertisment -

Most Popular

- Advertisment -