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Summary

  • Despite forward-and-back movements, the S&P 500 continues to hit new highs.
  • The most recent employment report suggests the economy is recovering.
  • But investors should be careful to avoid getting burned by a correction in stocks or premature hope for robust economic growth.

The S&P 500 notched above its all-time high last week. It's the sixth consecutive quarterly gain for the index, extending the bull market into the summer.

Many analysts are attributing the growth to an unexpected rise in Chinese manufacturing that's affecting US markets. The Market Vectors Steel ETF (NYSEARCA:SLX), for instance, is up more than 1.1% as of this morning.

Though the latest employment report was an upside surprise, and much of the economic news this spring has been good, investors are still wary about high valuations and the worrisome GDP report.

With that in mind, we decided to run a screen focused on the S&P 500. To start, we focused our screen by looking for a high return on equity of at least 15%. We then narrowed the screen for companies rallying above their 20-day, 50-day, and 200-day simple moving averages ((NYSE:SMA)).

We then completed the screen by looking for companies with encouraging accounts receivable trends. This means that the company is doing a good job turning its accounts receivable-money it's owed-into revenue, which is money in the bank.

Click here for the full, interactive chart.

1. Becton, Dickinson and Company (NYSE:BDX): Develops, manufactures, and sells medical devices, instrument systems, and reagents worldwide. Market cap at $23.11B, most recent closing price at $119.60.

SMA 20: .72%

SMA 50: 2.77%

SMA 200: 8.54%

ROE: 18.9%

Revenue grew by 3.6% during the most recent quarter ($2,072M vs. $2,000M y/y).

Accounts receivable grew by -7.38% during the same time period ($1,130M vs. $1,220.01M y/y).

Receivables, as a percentage of current assets, decreased from 22.18% to 19% during the most recent quarter (comparing 3 months ending 2014-03-31 to 3 months ending 2013-03-31).

2. Cognizant Technology Solutions Corporation (NASDAQ:CTSH): Provides information technology consulting and technology services in North America, Europe, and Asia. Market cap at $30B, most recent closing price at $49.30.

SMA 20: 2.38%

SMA 50: 2.79%

SMA 200: 4.69%

ROE: 21.8%

Revenue grew by 19.87% during the most recent quarter ($2,422.35M vs. $2,020.74M y/y).

Accounts receivable grew by 15.78% during the same time period ($1,970.95M vs. $1,702.33M y/y).

Receivables, as a percentage of current assets, decreased from 35.2% to 31.33% during the most recent quarter (comparing 3 months ending 2014-03-31 to 3 months ending 2013-03-31).

Click here for the full, interactive chart.

3. EOG Resources, Inc. (NYSE:EOG): Engages in the exploration, development, production, and marketing of natural gas and crude oil primarily in the United States, Canada, the Republic of Trinidad, Tobago, the United Kingdom, and the People's Republic of China. Market cap at $63.31B, most recent closing price at $115.84.

SMA 20: 3.58%

SMA 50: 9.47%

SMA 200: 25.94%

ROE: 15.6%

Revenue grew by 21.66% during the most recent quarter ($4,083.67M vs. $3,356.51M y/y).

Accounts receivable grew by -5.94% during the same time period ($1,801.86M vs. $1,915.64M y/y).

Receivables, as a percentage of current assets, decreased from 46.94% to 37.36% during the most recent quarter (comparing 3 months ending 2014-03-31 to 3 months ending 2013-03-31).

Click here for the full, interactive chart.

4. Murphy Oil Corporation (NYSE:MUR): Engages in the exploration and production of oil and gas properties worldwide. Market cap at $11.97B, most recent closing price at $66.68.

SMA 20: 2.72%

SMA 50: 5.71%

SMA 200: 8.34%

ROE: 23.4%

Revenue grew by 1.07% during the most recent quarter ($1,304.81M vs. $1,290.94M y/y).

Accounts receivable grew by -40.12% during the same time period ($1,003.71M vs. $1,676.17M y/y).

Receivables, as a percentage of current assets, decreased from 40.89% to 29.75% during the most recent quarter (comparing 3 months ending 2014-03-31 to 3 months ending 2013-03-31).

5. Scripps Networks Interactive, Inc. (NYSE:SNI): Operates as a lifestyle content and Internet search company in the United States and internationally. Market cap at $11.49B, most recent closing price at $80.37.

SMA 20: 2.71%

SMA 50: 5.99%

SMA 200: 5.3%

ROE: 26.7%

Revenue grew by 8.31% during the most recent quarter ($643.75M vs. $594.38M y/y).

Accounts receivable grew by 3.91% during the same time period ($592.21M vs. $569.95M y/y).

Receivables, as a percentage of current assets, decreased from 38.34% to 36% during the most recent quarter (comparing 3 months ending 2014-03-31 to 3 months ending 2013-03-31).

Source: 5 Rallying S&P 500 Stocks With Encouraging Accounts Receivable