Every week, Q.ai puts together a thematic screen for our investors, courtesy of Forbes AI Investor. These are securities that, for one reason or another, fit into the same basket (a theme, if you will). And this week, we’re screening some of the top stocks in U.S. Small to Midcap theme. While you may not have heard of some – or even all – of these securities, many of them are worth a look, and maybe even an investment.
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.
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Shutterstock, Inc (SSTK)
Shutterstock, Inc closed up 2.3% on Friday to $100.66 per share, closing out the final day of the week at nearly 308.5k trades. The stock is trending between its 10- and 22-day price averages of $100.84 and $99.22, respectively, and remains up around 40.4% for the year. Currently, Shutterstock is trading around 37x forward earnings.
Shutterstock is a multimedia digital content provider that allows creative individuals to realize their artistic prowess with full-service subscriptions, media content, and a variety of platform tools. While the company isn’t exactly a small fish in the creative space, it boosted its name last week when it announced a partnership with the nonprofit It Gets Better Project, which “aims to challenge LGBTQ+ visual stereotypes” in modern media.
The midcap stock is likely hoping that this outreach toward inclusiveness will boost its numbers, both long-term and ahead of its Q2 2021 earnings report slated to drop before market open on Tuesday, 27 July. That said, the company has also outperformed Wall Street expectations in all four of the last four quarters.
Over the last three fiscal years, this has led to some impressive numbers for the midcap multimedia provider. For instance, revenue jumped 10.5% in the period from $623 million to $666.7 million, with operating income up an astonishing 229% to $86.5 million compared to just $35.6 million. Per-share earnings have benefited from this growth, climbing to $1.97 in the last fiscal year against $1.54 three years prior.
Currently, Shutterstock’s revenue is expected to grow by 0.5% in the next 12 months. Our AI rates this midcap stock A in Low Volatility Momentum and F in Technicals, Growth, and Quality Value.
ABM Industries, Inc (ABM)
ABM Industries, Inc closed down 0.3% to $46.42 on Friday on volume around 971k trades. The stock is up almost 22.7% for the year and trades at 14.5x forward earnings.
ABM Industries is a U.S.-based facility management provider founded in 1909. The company provides services such as landscaping and grounds maintenance, parking and transportation, as well as mechanical, janitorial, and electrical work.
While the facility management firm hasn’t made a big splash this year, it did recently announce that it has amended its secured credit agreement to $1.3 billion in revolving credit and a $650 million term loan, providing the mid-cap stock with the flexibility to fund growth, remove limitations on dividends and share repurchases, and increase overall liquidity. Likely, the business’ new extended credit line will help as it settles an overtime dispute in the Superior Court of California, County of San Francisco, to the tune of $140 million.
But this one-time settlement is unlikely to hurt the company’s bottom line. While ABM Industries’ revenue has bled out around $450 million in the last three years to $5.99 billion in the most recent fiscal year, its operating income has jumped 88% in that time to $276 million. Unfortunately, the pandemic hit facilities management hard, with per-share earnings plunging to $0 and return on equity squeaking by at a mere 0.01%.
Currently, ABM Industries is expected to see forward 12-month revenue growth around 0.9%. Our AI rates the firm A in Technicals and Growth and F in Low Volatility Momentum and Quality Value.
Portland General Electric Company (POR)
Portland General Electric Company gained 0.8% Friday, closing out 537.7k trades on the day to a final price of $47.86. The stock is up 11.9% YTD and trading at 18.3x forward earnings.
Portland General Electric Company, commonly known as PGE, is a Fortune 1000 public utility that serves around 44% of Oregon’s inhabitants in six counties. The company is currently listed as having the number one voluntary renewable energy program in the United States, though its primary energy still comes from coal and natural gas sources.
PGE made headlines recently when it announced that Oregon blackouts may be possible throughout the current fire season, as the company’s primary focus will be balancing the grid needs of citizens against wildfire risks in a historically dry fire season.
Over the last three fiscal years, Portland General Electric’s revenue gained 9.5%, climbing to $2.15 billion compared to $1.99 billion three years prior. Operating income fell from $335 million to $264 million in that time frame, while per-share earnings dropped from $2.37 to $1.72. Meanwhile, return on equity was slashed from 8.6% to just 6%.
Currently, Portland General Electric is expected to see revenue growth around 2.7% in the next 12 months. Our AI rates this electric company A in Growth and Quality Value and F in Technicals and Low Volatility Momentum.
Horace Mann Educators Corporation (HMN)
Horace Mann Educators Corporation ended Friday flat at $38.70, trading 146.6k shares to remain down 7.9% for the year. The stock is trading at 11x forward earnings.
Horace Mann Educators is an insurance provider that operates through five segments: property and casualty, supplemental, retirement, life, and corporate and other. It underwrites a variety of products through its segments, including auto, property, supplemental, and life insurance.
While Horace Mann isn’t yet an enormous name in the space, it is growing, as its recent acquisition of Madison National Life Insurance Company, Inc. shows. The company paid an aggregate purchase price of $172.5 million in cash for its stock purchase, with an additional $12.5 million due the seller (Independence Holding Company) should Madison National reach specified financial targets in 2023.
And over the last three fiscal years, Horace Mann’s revenue jumped 11.2% to $1.3 billion, while operating income skyrocketed an astronomical 557% to $184.8 million compared to $32.5 million. Meanwhile, per-share earnings soared 732% to reach $3.17 in the most recent fiscal year as return on equity jumped from 1.3% to nearly 8%.
Currently, Horace Mann Educators is expected to grow around 1.2% in the next 12 months. Our AI rates this insurance company positively overall, with As in Technicals, Growth, and Quality Value, and an F in Low Volatility Momentum.
Power Integrations, Inc (POWI)
Power Integrations, Inc plunged 2.1% Friday to $78.27 per share with 268.8k trades in the bank. The stock is down 4.4% for the year and currently trades at 31.9x forward earnings.
Power Integrations is a power conversion and semiconductor designer, developer, and manufacturer with a particular focus on high-voltage power conversion technologies for LED, gate, and motor drivers, as well as various automobile solutions. The company aims to create products that further a clean energy ecosystem by designing semiconductors that efficiently transmit and consume electricity.
Power Integrations is one of dozens of companies slated to release its Q2 2021 financial results in the coming week, with analyst sales estimates sitting around $174 million for the quarter.
Over the last three fiscal years, Power Integrations saw revenue growth of 32.8%, coming in at $488.3 million compared to $416 million. Operating income ballooned around 72% in the same period to $70.5 million compared to $55.7 million, while per-share earnings gained a penny to $1.17 in the most recent fiscal year.
Currently, our AI rates this semiconductor innovator A in Technicals, Growth, and Quality Value – though it’s earned a big, fat F in Low Volatility Momentum.
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