3 Reasons Why Growth Investors Shouldn't Overlook Universal Health Services (UHS)

Core Viewpoint - Growth investors are focused on stocks with above-average financial growth, but identifying such stocks can be challenging due to inherent risks and volatility [1] Group 1: Growth Stock Identification - The Zacks Growth Style Score system aids in identifying promising growth stocks by analyzing real growth prospects beyond traditional metrics [2] - Universal Health Services (UHS) is currently recommended due to its favorable Growth Score and top Zacks Rank [2] Group 2: Earnings Growth - Earnings growth is a critical factor for growth investors, with double-digit growth being highly desirable [3] - Universal Health Services has a historical EPS growth rate of 5.7%, but projected EPS growth for this year is 14%, surpassing the industry average of 13.8% [4] Group 3: Asset Utilization - The asset utilization ratio, or sales-to-total-assets (S/TA) ratio, is an important metric for assessing a growth stock's efficiency [5] - Universal Health Services has an S/TA ratio of 1.11, indicating it generates $1.11 in sales for every dollar in assets, compared to the industry average of 0.89 [6] Group 4: Sales Growth - Sales growth is another key indicator, with Universal Health Services expected to achieve a 7.7% sales growth this year, significantly higher than the industry average of 1.1% [7] Group 5: Earnings Estimate Revisions - Trends in earnings estimate revisions correlate strongly with near-term stock price movements [8] - The current-year earnings estimates for Universal Health Services have increased by 3.2% over the past month [9] Group 6: Overall Positioning - Universal Health Services has achieved a Zacks Rank 1 and a Growth Score of A, positioning it well for potential outperformance in the market [11]