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Stock Focus
Growth On The Cheap
Fei Mei Chan, 08.11.03, 8:30 AM ET
NEW YORK - Given the state of the economy over the past three years, consistent growth isn't the easiest thing to achieve. But some companies have weathered the storm, and are expected to continue delivering strong earnings growth in the future.
 Universal Health Services
(nyse:
UHS -
news
-
people
), for example, has a five-year annualized earnings-per-share growth of 19%. The King of Prussia, Pa.-based company operates acute care and behavioral health hospitals as well as ambulatory surgery and radiation centers in the U.S., Puerto Rico and France. The firm also acts as the advisor to Universal Health Realty Income Trust
(nyse:
UHT -
news
-
people
), a real estate investment trust.
Universal recently announced that it intends to acquire three acute-care hospitals in California. Near completion are a new 176-bed hospital in Las Vegas and a 90-bed addition to its Northwest Texas Hospital in Amarillo, Tex.
John Ransom, analyst at Raymond James Financial, notes that Universal's bad debt expense and malpractice costs as a percentage of revenue are relatively stable compared with its peers. Universal is expected to see percentage profit gains in the high teens both this year and next. The stock trades at 13 times estimated 2004 profits.
We screened for other companies with at least 15% annualized earnings growth over the past five years and expected earnings growth of at least 15% (annualized) over the next three to five years. The stocks listed below trade for no more than 13 times estimated 2004 profits versus an expected multiple of 16 for the S&P 500.
| Growth At A Value |
| Company | Price | Change From 52-Week High | 2004 Estimated P/E | Long-Term Growth* | Market Value ($mil) |
| Commerce Bancorp
(nyse:
CBH -
news
-
people
) | $ 37.97 | -21% | 13 | 16% | $2,644 |
| FTI Consulting
(nyse:
FCN -
news
-
people
) | 23.00 | -29 | 12 | 20 | 947 |
| McKesson
(nyse:
MCK -
news
-
people
) | 32.98 | -11 | 12 | 18 | 9,579 |
| Multimedia Games
(nasdaq:
MGAM -
news
-
people
) | 23.36 | -21 | 9 | 19 | 302 |
| Universal Health Services
(nyse:
UHS -
news
-
people
) | 49.83 | -13 | 13 | 18 | 2,914 |
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