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FORTUNE Names America's Fastest-Growing Companies; Oil Services Giant Global Marine Tops List With Annual Rate of 327%
PR Newswire - September 09, 1997 13:45
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NEW YORK, Sept. 9 /PRNewswire/ -- Oil services giant Global Marine, whose
earnings per share are gushing at an annual growth rate of 327%, heads
FORTUNE's list of America's 100 fastest-growing companies. The list, which
appears in the September 29 issue of FORTUNE, contains a group of mostly
smaller companies with average shareholder return over the past year of 75%,
almost double that of the S&P 500. Go back a little further and some of the
performance stats are downright dazzling: Shares of McAfee Associates
(No. 15), which makes antivirus software for computer networks, are up 1,967%
and Dell Computer (No. 47) rose 1,912%.
As investors shy away from overpriced blue chip stocks, the companies on
FORTUNE's fastest-growing list might offer the kind of growth they seek. But
high growth can also mean high risk. For example, while outsourcing giant
Employee Solutions is No. 7 on the list, with an earnings per share annual
growth rate of 232%, its stock is down 69% from the year before.
To help FORTUNE determine the top 100, Zacks Investment Research screened
9,500 companies, ranking them by three years' earnings-per-share growth.
Companies on the list were also required to have sales growth of at least 30%.
According to FORTUNE, now is a very good time for investors to be focusing
on the fast-growth sector. While the market is paying more for emerging
growth stocks than five years ago, it is paying less than last year, or even
this past January. Last spring the sector bottomed out and started to
rebound. Analysts believe there is plenty of room for more growth, thanks to
positive earnings surprises outnumbering negative surprises by two to one --
among small-cap stocks during the second quarter. And, emerging growth stocks
historically have performed twice as well as the rest of the market in the two
years following tax cuts like the recent capital-gains cut.
Among a package of stories on the fastest-growing companies, FORTUNE takes
a look at how these growth superstars handle one of management's most critical
jobs: allocating capital. The challenge for such high fliers is particularly
daunting for several reasons. First, next year's opportunities far outstrip
the resources available this year, so the rush is on for capital. Second,
many of the companies on the list are free of having well-established
budgeting processes. And third, many young high-growth companies do not have
much access to debt capital. So, based on their success, the companies on
FORTUNE's list are doing a thing or two that might serve as a lesson for some
older, more established companies.
Following Global Marine among the top 100 is Harnischfeger Industries,
(No. 2), which makes machinery for mining and paper industries and has turned
poor earnings into an annual earnings per share growth rate of 315%.
The fastest-growing technology company, among the 35 making the list, was
PC retailer CompUSA (No. 3), which emerged from near bankruptcy three years
ago by cutting costs and delving into profitable businesses like software
training. Its earnings per share have been growing at a rate of 296%. Other
promising technology companies on the list are Maxim Integrated Products
(No. 48), an innovative semiconductor maker, and networking powerhouse
3Com (No. 95).
Buoyed by higher demand for hydrocarbons, 18 energy companies made the
list. In addition to Global Marine, two standouts in the energy sector are
EVI (No. 4), whose barges drill for oil in the swamps around New Orleans, and
Cliffs Drilling (No. 18), an oil services and engineering company that has
zeroed-in on crude-rich Venezuela for most of its foreign sales. Following
energy, 16 industrial companies, including U.S. Filter (No. 44) made the list.
Additionally, eight health care companies are on the list, benefiting from
industry consolidation, as well as seven retailers.
FORTUNE's Erick Schonfeld looks at the ins and outs of investing in
high-growth stocks and says that in order to do well, investors must throw out
some familiar notions about investing and begin to think like a venture
capitalist. "It works against the basic mindset most people have," says Smith
Barney growth guru Keith Mullins. And, Doug MacKay, co-manager of Pin Oak
Aggressive stock fund, says, "Volatility is the name of the game, so you want
to be careful about when you buy the stocks."
Following Global Marine, Harnischfeger Industries, CompUSA, and EVI, among
the Top 10 on the fastest-growing list are:
-- Rent Way, No. 5, a "rent-to-own" furniture seller, with an earnings per
share annual growth rate of 262%;
-- Just For Feet, No. 6, whose shoe stores sport basketball courts, walls
of video monitors, loud music, and tons of sneakers. Growth rate: 232%;
-- Employee Solutions, No. 7, a staff-leasing company seeking legal
solutions because of a class-action suit alleging it under-reserved for its
workers' comp business. Its growth rate is 232%;
-- LCI International, No. 8, a telecommunications company with a growth
rate of 231% that keeps marketing costs low by peddling phone service through
independent agents, who get a tiny percentage of each phone bill;
-- York Research, No. 9, a power producer whose sales were boosted by the
buyout of an electric utility brokerage business. Growth rate: 230%;
-- United States Cellular, No. 10, a cellular-service provider, which is a
major player in rural areas, a big growth market. Its earnings per share
annual growth rate is 209%.
The September 29 issue of FORTUNE is on newsstands September 15.
Fortune Ranks America's 100 Fastest-Growing Companies
Earnings Per Share
Annual Growth
Rank Company Rate % Headquarters
1 Global Marine 327 Houston, Tex.
2 Harnischfeger Industries 315 St. Francis, Wis.
3 CompUSA 296 Dallas, Tex.
4 EVI 263 Houston, Tex.
5 Rent Way 262 Erie, Pa.
6 Just For Feet 232 Birmingham, Ala.
7 Employee Solutions 232 Phoenix, Ariz.
8 LCI International 231 McLean, Va.
9 York Research 230 New York, N.Y.
10 United States Cellular 209 Chicago, Ill.
11 Semtech 207 New Park, Calif.
12 Plains Resources 204 Houston, Tex.
13 Wind River Systems 202 Alameda, Calif.
14 Thermotrex 182 San Diego, Calif.
15 McAfee Associates 182 Santa Clara, Calif.
16 Pairgain Technologies 161 Tustin, Calif.
17 Trident Microsystems 161 Mountain View, Calif.
18 Cliffs Drilling 148 Houston, Tex.
19 BJ Services 146 Houston, Tex.
20 Hologic 144 Waltham, Mass.
21 Copart 144 Benicia, Calif.
22 Whitehall 142 Dallas, Tex.
23 Jabil Circuit 140 St. Petersburg, Fla.
24 Mastec 138 Miami, Fla.
25 Modtech 138 Perris, Calif.
26 Presstek 135 Hudson, N.H.
27 Benton Oil & Gas 131 Carpinteria, Calif.
28 Chips & Technologies 122 San Jose, Calif.
29 Prepaid Legal Services 118 Ada, Okla.
30 Lear 114 Southfield, Mich.
31 Coherent Communications
Systems 113 Leesburg, Va.
32 Zoltek 107 St. Louis, Mo.
33 Swift Energy 104 Houston, Tex.
34 Smith International 103 Houston, Tex.
35 Americredit 101 Fort Worth, Tex.
36 DVI 101 Doylestown, Pa.
37 Noble Affiliates 100 Ardmore, Okla.
38 JLG Industries 99 McConnellsburg, Pa.
39 Ha-Lo Industries 96 Niles, Ill.
40 Sanmina 95 San Jose, Calif.
41 Gleason 95 Rochester, N.Y.
42 Innovex 95 Hopkins, Minn.
43 Pride International 94 Houston, Tex.
44 United States Filter 94 Palm Desert, Calif.
45 HealthSouth 93 Birmingham, Ala.
46 Action Performance 93 Tempe, Ariz.
47 Dell Computer 90 Round Rock, Tex.
48 Maxim Integrated Products 88 Sunnyvale, Calif.
49 Tom Brown 85 Midland, Tex.
50 Semiconductor Packaging
Materials 85 Armonk, N.Y.
Fortune Ranks America's 100 Fastest-Growing Companies (continued)
Earnings Per Share
Annual Growth
Rank Company Rate % Headquarters
51 Altera 83 San Jose, Calif.
52 Tetra Technologies 81 The Woodlands, Texas
53 Quantum 80 Milpitas, Calif.
54 TransOcean Offshore 80 Houston, Texas
55 Medical Resources 79 Hackensack, N.J.
56 S3 79 Santa Clara, Calif.
57 II-VI 78 Saxonburg, Pa.
58 Checkpoint Systems 78 Thorofare, N.J.
59 Steris 77 Mentor, Ohio
60 Oxford Health Plans 76 Norwalk, Conn.
61 Ultrak 76 Carrollton, Texas
62 Fore Systems 76 Warrendale, Pa.
63 SCI Systems 75 Huntsville, Ala.
64 ATC Communications Group 74 Dallas, Texas
65 Boston Chicken 73 Golden, Colo.
66 Regal Cinemas 70 Knoxville, Tenn.
67 Corrections Corp. of America 69 Nashville, Tenn.
68 Sylvan Learning Systems 69 Baltimore, Md.
69 Richton International 68 Madison, N.J.
70 High Plains 67 Wichita, Kan.
71 Electronics For Imaging 66 San Mateo, Calif.
72 Petroleum Development 65 Bridgeport, W.Va.
73 Atmel 64 San Jose, Calif.
74 Peoplesoft 63 Pleasanton, Calif.
75 Nuevo Energy 63 Houston, Texas
76 Technitrol 62 Trevose, Pa.
77 Starbucks 61 Seattle, Wash.
78 Atchison Casting 60 Atchison, Kan.
79 Lomak Petroleum 60 Fort Worth, Texas
80 Robbins & Myers 60 Dayton, Ohio
81 Zygo 59 Middlefield, Conn.
82 Staples 58 Westborough, Mass.
83 Warrantech 58 Stamford, Conn.
84 Cambridge Technology Partners 57 Cambridge, Mass.
85 Zytec 56 Eden Prairie, Minn.
86 Thermedics 56 Woburn, Mass.
87 Todd AO 56 Hollywood, Calif.
88 Blyth Industries 55 Greenwich, Conn.
89 Ducommun 55 Carson, Calif.
90 Seacor Smit 54 Houston, Texas
91 Richey Electronics 54 Garden Grove, Calif.
92 CDW Computer Centers 54 Vernon Hills, Ill.
93 Robert Half International 53 Menlo Park, Calif.
94 Gibraltar Steel 52 Buffalo, N.Y.
95 3Com 51 Santa Clara, Calif.
96 California State Bank 51 West Covina, Calif.
97 Ultratech Stepper 51 San Jose, Calif.
98 Chronimed 51 Minnetonka, Minn.
99 Kla-Tencor 50 San Jose, Calif.
100 URS 50 San Francisco, Calif.
SOURCE FORTUNE
CONTACT: Terry McDevitt, Director of Communications of FORTUNE,
212-522-7149
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