3 Reasons Why Growth Investors Shouldn't Overlook Ahold (ADRNY)

Investors seek growth stocks to capitalize on above-average growth in financials that help these securities grab the market's attention and produce exceptional returns. But finding a great growth stock is not easy at all.That's because, these stocks usually carry above-average risk and volatility. In fact, betting on a stock for which the growth story is actually over or nearing its end could lead to significant loss.However, the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects, makes it pretty easy to find cutting-edge growth stocks.Our proprietary system currently recommends Ahold NV (ADRNY) as one such stock. This company not only has a favorable Growth Score, but also carries a top Zacks Rank.Studies have shown that stocks with the best growth features consistently outperform the market. And returns are even better for stocks that possess the combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy).While there are numerous reasons why the stock of this company is a great growth pick right now, we have highlighted three of the most important factors below:Earnings GrowthEarnings growth is arguably the most important factor, as stocks exhibiting exceptionally surging profit levels tend to attract the attention of most investors. And for growth investors, double-digit earnings growth is definitely preferable, and often an indication of strong prospects (and stock price gains) for the company under consideration.While the historical EPS growth rate for Ahold is 3.7%, investors should actually focus on the projected growth. The company's EPS is expected to grow 5.3% this year, crushing the industry average, which calls for EPS growth of 4.7%.Impressive Asset Utilization RatioGrowth investors often overlook asset utilization ratio, also known as sales-to-total-assets (S/TA) ratio, but it is an important feature of a real growth stock. This metric shows how efficiently a firm is utilizing its assets to generate sales.Right now, Ahold has an S/TA ratio of 1.77, which means that the company gets $1.77 in sales for each dollar in assets. Comparing this to the industry average of 1.19, it can be said that the company is more efficient.In addition to efficiency in generating sales, sales growth plays an important role. And Ahold is well positioned from a sales growth perspective too. The company's sales are expected to grow 3.5% this year versus the industry average of 0%.Promising Earnings Estimate RevisionsBeyond the metrics outlined above, investors should consider the trend in earnings estimate revisions. A positive trend is a plus here. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near-term stock price movements.The current-year earnings estimates for Ahold have been revising upward. The Zacks Consensus Estimate for the current year has surged 1.9% over the past month.Bottom LineWhile the overall earnings estimate revisions have made Ahold a Zacks Rank #2 stock, it has earned itself a Growth Score of B based on a number of factors, including the ones discussed above.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.This combination indicates that Ahold is a potential outperformer and a solid choice for growth investors.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ahold NV (ADRNY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks