A robust construction market convinces me that Halma (LSE: HLMA) should continue delivering chunky earnings growth for some time yet.
The company's tentacles spread far and wide, giving the bottom line an extra layer of security and also providing Halma with significant sterling benefits. And with construction indicators improving across Europe, North America and Asia, the stage appears set for organic sales to keep accelerating.
Indeed Halma -- which provides technology for health, safety and environmental applications -- advised recently that organic constant currency revenue and profit growth has continued in the second half with revenue increases in all major geographic regions.
The Amersham company said that "Asia Pacific has maintained a strong performance," while it noted "good progress in the USA and Mainland Europe." Revenues in the UK have also "remained steady," while sales growth has picked up in its other regions.
Its aggressive approach to acquisitions bolsters the company's earnings outlook for the near term and beyond too. The company bought New York-based FluxData (a specialist in multi-spectral imaging) for $12m in February, and its healthy balance sheet and excellent cash generation should keep the purchases coming.
Halma has seen its share price detonate since the start of the year, the stock rising from early January's troughs of 894p per share to £11 today, a stunning 23% rise.
It is easy to see why investors are piling back into the stock. It has a robust record of delivering chunky earnings growth, helped by its exposure to markets with low sales cyclicality. And signs of improvement in its end markets lends further strength to the belief that the bottom line should keep on swelling.
The City expects Halma's excellent earnings track record to keep on rolling (a 15% rise is anticipated for the year to March 2017).
And analysts are predicting additional earnings growth of 10% and 6% in fiscal 2018 and 2019 respectively. So while Halma consequently deals on a lofty forward P/E ratio of 25.3 times, I reckon the firm's excellent earnings visibility demands such a valuation.
Media giant Future (LSE: FUTR) grabbed the headlines in Friday business, its share value shooting 14% higher and hitting record highs above 200p following excellent half-year results.
The publisher said that total revenues exploded 35% in the six months to March, to £40.9m, a result that saw it flip to pre-tax profits of £0.9m from a £0.3m loss in the corresponding period last year.
Future saw revenues from its core global brands continue shooting skywards, with organic sales of PCGamer.com for example rising 81%, and T3.com advancing 72%. And a growing online audience (53m internet readers was up 18% year-on-year) helped push e-commerce revenues 72% higher to £4.3m.
The number crunchers certainly believe Future can look forward to explosive earnings growth, and have chalked in advances of 74% and 78% in the years to September 2017 and 2018 respectively.
While a forward P/E ratio of 19.5 times may fly above the widely-accepted value watermark of 15 times, a sub-1 PEG readout of 0.3 actually suggests Future is a bargain given its predicted growth trajectory.
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Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Halma. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.