Do you consider a stock's sales trends when choosing among names? We ran a screen with this idea in mind.
We screened the Internet sphere for stocks with weak sales trends, comparing growth in revenue to growth in accounts receivable. Since accounts receivable is the portion of revenue not yet received, and there is no guarantee the money will ever be received, the smaller the portion of revenue made up of receivables, the healthier the company's revenue.
We screened for stocks seeing slower growth in revenue than accounts receivable year-over-year, as well as accounts receivable comprising a larger portion of current assets over the same time period.
For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.
Do you think these stocks are in hot water? Use this list as a starting point for your own analysis.
List sorted by change in revenue over the last year.
1. Sina Corp. (SINA): Provides online media and mobile value-added services (MVAS) in the People's Republic of China. Market cap at $3.23B, most recent closing price at $48.59. Revenue grew by 16.95% during the most recent quarter ($152.38M vs. $130.29M y/y). Accounts receivable grew by 30.88% during the same time period ($144.96M vs. $110.76M y/y). Receivables, as a percentage of current assets, increased from 12.44% to 16.27% during the most recent quarter (comparing 3 months ending 2012-09-30 to 3 months ending 2011-09-30).
2. Akamai Technologies, Inc. (AKAM): Provides services for accelerating and improving the delivery of content and applications over the Internet in the United States and internationally. Market cap at $6.37B, most recent closing price at $35.87. Revenue grew by 22.51% during the most recent quarter ($345.32M vs. $281.86M y/y). Accounts receivable grew by 29.33% during the same time period ($236.23M vs. $182.66M y/y). Receivables, as a percentage of current assets, increased from 19.76% to 31.34% during the most recent quarter (comparing 3 months ending 2012-09-30 to 3 months ending 2011-09-30).
Accounting data sourced from Google Finance, all other data sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.