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3 Stocks With Fast Sales Growth

In my working-class neighborhood in New York City, most restaurants have empty tables this year at peak hours and are deserted anytime else. But one old diner that was remodeled recently into a chic bistro has a line at the door most for dinner most days, for brunch on the weekends, and for the bar starting at 3:00 a.m., when nearby bars close. Whether by skill, location or sheer luck, the place is cashing in 24/7, proving that even 2009 – with its cautious consumer spending – is a boom year for a few businesses.

The companies below are among the prosperous few. They managed to increase their sales by more than 15% last quarter versus a year earlier, not including sales that were added through takeovers of other companies. If that doesn’t sound like blazing growth, consider the climate. Last quarter, the median S&P 500 company saw its sales shrink 11%, even after acquisitions. Sure, managers largely beat Wall Street’s earnings forecasts last quarter, but only through aggressive cost-cutting. Ultimately, those managers will run out of ways to reduce spending, making genuine growers all the more prized among investors.

DeVry

Projected Fiscal 2010 Sales Growth: 23%

A scarcity of good jobs has sent students flocking to schools with a history of job-specific training and flexible, online options. DeVry (DV) reorganized its namesake school into a proper university in 2002, and today it enrolls more than 65,000 students in undergraduate and graduate programs. Demand is especially strong for spots in the company’s health-care schools, like Ross University for veterinarians and Chamberlain College for nurses. DeVry’s sales growth rate roughly doubled to 34% in its fiscal year ended June. This year, analysts foresee a 23% increase. Management has plans to diversify into new programs and expand into K-12 education. It should have plenty of money to do so. The company has no net debt and generates yearly free cash equal to almost 5% of its stock ticker market value.

Mindray Medical International

Projected 2009 Sales Growth: 14%

If not for pesky democracy, America’s health-care reform might be easier. China earlier this year announced a $123 billion plan to extend coverage, build hospitals and buy new equipment. Local equipment manufacturers have all the business they can handle. Mindray Medical International (MR) makes machines that monitor patients’ blood pressure and breathing; diagnostic products for blood and urine; and basic imaging equipment, like portable ultrasound machines. All segments are growing. The company is still relatively small, with $608 million in trailing 12-month sales, but should benefit from rising Chinese affluence today and a shift to more sophisticated exports like medical equipment in the future. That projection is perhaps not lost on investors, with shares at 29 times earnings.

Cal Dive International

Projected 2009 Sales Growth: 13%

Cal Dive (DVR) provides manned diving, pipe laying, platform installation and salvage services for offshore drillers. Around a quarter of the Houston company’s sales come from foreign customers; the firm is getting plenty of work from Mexico and China lately. During Cal Dive’s most recent quarter, its gross margins jumped to 27.2%, up from 18.7%, suggesting its ships are seeing little rest. At 10 times forecast 2009 earnings, Cal Dive is easily the cheapest stock ticker on this list. Its largest shareholder, Helix Energy (HLX), had a 51% stake before selling roughly half of it in June and putting the other half up for sale Friday. Meanwhile, Cal Dive has been repurchasing (and thus retiring) shares. The net result probably has been a slight drag on the stock ticker price, even though investors should be better off in the end, with slightly fewer shares and less concentrated ownership.

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