Big Things from “Small” Companies

I can’t tell you how great it is to follow successful companies that report solid financial growth. For the CEO or business owner, an enterprise is his or her art form. The investors are the financiers, and in return for their money, they get a share of the business. One of my favorite companies that I’ve written about extensively in this column is Huron Consulting Group Inc. (NASDAQ/HURN). Who would ever have thought that a consulting firm would be a growth stock? The numbers provide all the answers.

In the first quarter this year, Huron Consulting generated record revenues of $116 million, up 87% from revenues of $62.2 million generated in the first quarter of 2006. Naturally, not all of that growth was organic. There were some acquisitions, and the good news is that the bottom line wasn’t adversely affected. Net income for the quarter was $9.8 million, or $0.55 per diluted share, up from net income of $5.6 million, or $0.33 per diluted share, generated in the comparable quarter last year.

The company just raised its earning expectations for all of 2007 and the stock just hit $70 per share, for a 100% gain in just nine months. All this from an enterprise that bills by the hour! Another great company that just reported excellent financial growth is American Oriental Bioengineering Inc. (NYSE/AOB). I’ve written about this company in this column for quite some time.

In its first quarter, AOB’s revenues grew 35% to $25.7 million, up from total revenues of $19.1 million generated in the first quarter of 2006.

Net income for the first quarter was an impressive $6.4 million, growing 31% from net income of $4.9 million generated in the comparable quarter. Growth of $6.4 million in profits on $25.7 million in sales is truly impressive!

Finding successful companies and watching them grow is rewarding. The good news from my perspective is that great companies tend to remain that way. Both Huron Consulting and AOB are likely to keep growing over the next several years.