3 Reasons Why Growth Investors Shouldn't Overlook Construction Partners (ROAD)

Growth stocks are attractive to many investors, as above-average financial growth helps these stocks easily 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, it's pretty easy to find cutting-edge growth stocks with the help of 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.Our proprietary system currently recommends Construction Partners (ROAD) as one such stock. This company not only has a favorable Growth Score, but also carries a top Zacks Rank.Research shows that stocks carrying the best growth features consistently beat the market. And for stocks that have a combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy), returns are even better.Here are three of the most important factors that make the stock of this road and highway construction company a great growth pick right now.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 Construction Partners is 21%, investors should actually focus on the projected growth. The company's EPS is expected to grow 61.2% this year, crushing the industry average, which calls for EPS growth of 6.6%.Cash Flow GrowthCash is the lifeblood of any business, but higher-than-average cash flow growth is more beneficial and important for growth-oriented companies than for mature companies. That's because, high cash accumulation enables these companies to undertake new projects without raising expensive outside funds.Right now, year-over-year cash flow growth for Construction Partners is 27.2%, which is higher than many of its peers. In fact, the rate compares to the industry average of 2.7%.While investors should actually consider the current cash flow growth, it's worth taking a look at the historical rate too for putting the current reading into proper perspective. The company's annualized cash flow growth rate has been 17% over the past 3-5 years versus the industry average of 10.1%.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.There have been upward revisions in current-year earnings estimates for Construction Partners. The Zacks Consensus Estimate for the current year has surged 10.3% over the past month.Bottom LineWhile the overall earnings estimate revisions have made Construction Partners 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 Construction Partners is a potential outperformer and a solid choice for growth investors.Don’t Miss Out on These Stocks Before you make your next investing move, we have a free report that highlights the %%CTA_TEXT%% to buy.Our experts at Zacks Investment Research hand-selected these stocks for their eye-opening growth projections.Since 1988, our stock picks have more than doubled the S&P 500 with an average gain of +23.89% per year using the Zacks Rank stock-rating system.Register now to see the %%CTA_TEXT%%.7 best stocksWant 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 Construction Partners, Inc. (ROAD): 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