Zacks.com featured highlights include: Sanderson Farms, Oxford Industries and Hilton Grand Vacations
For Immediate Release
3 Must-Buy Efficient Stocks to Enrich Your Portfolio
At times, it becomes difficult to measure the efficiency level of a company. This is why one must consider popular efficiency ratios while selecting stocks. Efficiency level measures a company’s capability to transform available input into output and is often considered an important parameter for gauging a company’s potential to make profits. The following are the efficiency ratios:
Receivables Turnover: This is the ratio of 12-month sales to four-quarter average receivables. It shows a company’s potential to extend its credit and collect debt in terms of that credit. A high receivables turnover ratio or the “accounts receivable turnover ratio” or “debtor’s turnover ratio” is desirable as it shows that the company is capable of collecting its accounts receivables or that it has quality customers.
Inventory Turnover: The ratio of 12-month cost of goods sold (COGS) to a four-quarter average inventory is considered one of the most popular efficiency ratios. It indicates a company’s ability to maintain a suitable inventory position. While a high value indicates that the company has a relatively low level of inventory compared to COGS, a low value indicates that the company is facing declining sales, which resulted in excess inventory.
Asset Utilization: This ratio indicates a company’s capability to convert assets into output and is thus a widely known measure of efficiency level. It is calculated by dividing total sales over the past 12 months by the last four-quarter average of total assets. Like the above ratios, high asset utilization may indicate that a company is efficient.
Operating Margin: This efficiency measure is the ratio of operating income over the past 12 months to sales over the same period. It measures a company’s ability to control operating expenses. Hence, a high value of the ratio may indicate that the company manages its operating expenses more efficiently than its peers.
Here are the top three stocks that made it through the screen:
Sanderson Farms is a poultry processing company. The company operates 11 hatcheries, nine feed mills and 12 processing plants, and one prepared chicken plant. It has an average four-quarter earnings surprise of 496.3%.
Oxford Industries is an apparel company that designs, sources, markets and distributes products bearing the trademarks of its owned and licensed brands. It has an average four-quarter earnings surprise of 96.7%.
Hilton Grand Vacations is engaged in the hospitality business. It markets and operates vacation ownership resorts. It has an average four-quarter earnings surprise of 411.1%.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1852031/3-must-buy-efficient-stocks-to-enrich-your-portfolio
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
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Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They’re virtually unknown to the general public. Yet today’s 220 Zacks Rank #1 “Strong Buys” were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
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