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10 Stocks With Explosive Earnings Growth: No. 7 99 Cents Only Stores (NDN)

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July 2, 2009 5:33 PM EDT

In the current difficult macroeconomic environment it is hard to find companies that are earning a meaningful profit, let alone growing earnings. But these 10 stocks have been rewarding investors with explosive earnings growth and stock performance to boot. You can track the entire series here.

Number 7: 99 Cents Only Stores (NYSE: NDN)

99¢ Only Stores is an extreme value retailer of primarily consumable general merchandise with an emphasis on name-brand products selling primarily at 99.99¢ or less.

As of March 28, 2009, the Company operated 279 retail stores with 199 in California, 43 in Texas, 25 in Arizona, and 12 in Nevada.

The extreme value retail industry, or deep discount industry, is one of the fastest growing retail sectors in the U.S. due to the state of the economy.

Earnings Growth:

99 Cents Only Stores' net income for fiscal 2009 was $8.5 million, or $0.12 per diluted share, compared to net income of $2.9 million, or $0.04 per diluted share, in fiscal 2008. That's a 300% year-over-year rise!

2009 was the first year in some time that 99 Cents Only Stores reported earnings growth, but now that earnings growth is expected to continue for years to come.

Earnings Prospects:

For the fiscal year 2010, analysts on average see 99 Cents Only Stores earning $0.49 per share. This would represent growth of over 300%!

For the fiscal year 2011, analysts on average see 99 Cents Only Stores earning $0.63 per share. This would represent growth of 29%.

99 Cents Only Stores is well positioned to benefit from the current weak consumer spending environment. Strong revenue growth and margin expansion will continue to drive explosive earnings growth for the company.

Stock Performance:

Shares of NDN are up nearly 19% YTD, versus the 1% slide in the S&P 500. Over the last year, NDN is up 99% versus 29% slide in the S&P 500. Over the past 5-years, NDN is down 15% versus the 20% slide in the S&P 500.