13 Growth Stocks Trading for a Bargain

If you look out into the middle of the decade, then you can make the case for increasingly robust economic growth that could fuel heady top- and bottom-line gains in a number of sectors.
But we're not there yet.

Recent economic signs point to an eventual economic brightening, though there are enough boulders in the U.S. economy's path that could derail an economic expansion.

So perhaps it's wiser to focus on companies that are poised for solid growth in 2013. Out of all the of the companies in the S&P 500, 91 (or 18%) are expected to boost sales by at least 10% this year. And of those firms, 72 are expected to boost per-share profits by at least 15% in the coming year.
A cluster of them reside in sectors that have already received a great deal of investor attention recently, so they can't be seen as solid values in the context of projected 2013 results any more. Housing stocks, for example, fit into this category.

Instead, value investors may prefer to focus on stocks that have solid growth prospects, but sport forward price-to-earnings (P/E) multiples below the S&P 500 average of 15. Fewer than 20 companies in the S&P 500 sport these above-cited growth prospects, while trading for less than 15 times projected profits. Notably, roughly half of these stocks operate in the energy sector.

The drilling boom

We've spent a lot of time at StreetAuthority looking at the revolutionary developments in the U.S. shale regions. The nation's new-found troves of natural gas are completely changing the nation's energy picture. But investors should understand that an energy boom is underway worldwide, from the coasts of South America and Africa to the Arctic Circle and the steppes of Kazakhstan. The spread of oil exploration beyond the traditional hubs of the Middle East explains why energy producers and service-equipment providers that have a global footprint are sporting solid growth metrics in 2013.

Global growth is in place for many energy stocks

Companies that toil in the energy sector have never garnered a high P/E ratio. That's because growth has tended to be erratic, with robust growth phases followed by industry downturns. Yet those downturns have proven to be short-lived, so the argument for a low multiple now seems less warranted. Take a look at the annual sales growth rate for energy-service provider Schlumberger (NYSE: SLB). Though the company has made some acquisitions that have boosted sales, organic growth has been quite solid as well. (more)

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