Seeking Alpha
Value, growth, long-term horizon, medium-term horizon
Profile| Send Message|
( followers)  

The following is a list of companies approaching 52-week highs during recent sessions. All of these companies have seen accounts receivable grow faster than revenues during the most recent quarter--an accounting trend that deserves closer attention.

To create this list, we started with a universe of about 120 stocks hitting new highs. We crunched the numbers on the most recent quarter's financials, and narrowed down the list to only focus on those companies that have seen accounts receivable grow faster than revenue during the most recent quarter.

Sometimes, problems with accounts receivable simply indicate a change in the business (like an acquisition), or a lazy collections department. However, extreme differences between accounts receivable and revenue can also suggest a desperate company that's trying to boost sales by giving its customers overly generous payment terms.

Of course, there may be less sensational explanations for these trends. Please use this list as a starting point for your own analysis - check out the 10-Q and related management discussions to find out more.

Financial data sourced from Google Finance. Short float and performance data sourced from Finviz.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research. Note: The numbers on top of items represent the forward P/E ratio, if available.

The list has been sorted by the difference between accounts receivable and revenue growth rates.

1. Ferrellgas Partners LP (NYSE:FGP): Oil & Gas Refining & Marketing Industry. Market cap of $1.96B. MRQ revenue grew by 13.67% on a y/y basis, while accounts receivable grew by 42.46%. Accounts receivable, as a percentage of current assets, increased from 37.21% to 44.44% (comparing 3 months ending 2009-10-31 vs. 3 months ending 2010-10-31). Short float at 0.51%, which implies a short ratio of 1.63 days. The stock has gained 36.08% over the last year.

2. Maxim Integrated Products Inc. (NASDAQ:MXIM): Semiconductor Industry. Market cap of $7.74B. MRQ revenue grew by 39.37% on a y/y basis, while accounts receivable grew by 61.64%. Accounts receivable, as a percentage of current assets, increased from 14.58% to 25.45% (comparing 13 weeks ending 2009-09-26 vs. 13 weeks ending 2010-09-25). Short float at 3.9%, which implies a short ratio of 3.56 days. The stock has gained 39.43% over the last year.

3. Gen-Probe Inc. (NASDAQ:GPRO): Research Services Industry. Market cap of $2.96B. MRQ revenue grew by 8.04% on a y/y basis, while accounts receivable grew by 29.53%. Accounts receivable, as a percentage of current assets, increased from 7.20% to 10.74% (comparing 3 months ending 2009-09-30 vs. 3 months ending 2010-09-30). Short float at 6.55%, which implies a short ratio of 8.33 days. The stock has gained 34.72% over the last year.

4. The Knot, Inc. (KNOT): Internet Information Providers Industry. Market cap of $378.07M. MRQ revenue fell by -3.16% on a y/y basis, while accounts receivable grew by 12.66%. Accounts receivable, as a percentage of current assets, increased from 6.76% to 7.07% (comparing 3 months ending 2009-09-30 vs. 3 months ending 2010-09-30). Short float at 3.62%, which implies a short ratio of 8.04 days. The stock has gained 13.64% over the last year.

5. TELUS Corporation (NYSE:TU): Wireless Communications Industry. Market cap of $14.68B. MRQ revenue grew by 1.82% on a y/y basis, while accounts receivable grew by 14.89%. Accounts receivable, as a percentage of current assets, increased from 67.70% to 69.99% (comparing 3 months ending 2009-09-30 vs. 3 months ending 2010-09-30). Short float at 0.01%, which implies a short ratio of 0.29 days. The stock has gained 59.01% over the last year.

6. CBS Corporation (NYSE:CBS): TV Industry. Market cap of $14.09B. MRQ revenue fell by -1.57% on a y/y basis, while accounts receivable grew by 11.32%. Accounts receivable, as a percentage of current assets, changed from 53.46% to 53.45% (comparing 3 months ending 2009-09-30 vs. 3 months ending 2010-09-30). Short float at 2.67%, which implies a short ratio of 1.87 days. The stock has gained 58.38% over the last year.

7. Pampa Energia SA (NYSE:PAM): Electric Utilities Industry. Market cap of $992.52M. MRQ revenue grew by 12.82% on a y/y basis, while accounts receivable grew by 24.97%. Accounts receivable, as a percentage of current assets, increased from 56.90% to 58.58% (comparing 3 months ending 2009-09-30 vs. 3 months ending 2010-09-30). Short float at 0.19%, which implies a short ratio of 0.4 days. The stock has gained 67.82% over the last year.

8. AutoNation Inc. (NYSE:AN): Auto Dealerships Industry. Market cap of $4.26B. MRQ revenue grew by 13.24% on a y/y basis, while accounts receivable grew by 25.19%. Accounts receivable, as a percentage of current assets, changed from 16.30% to 16.01% (comparing 3 months ending 2009-09-30 vs. 3 months ending 2010-09-30). Short float at 8.72%, which implies a short ratio of 10.39 days. The stock has gained 56.64% over the last year.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Short Ideas: 8 Companies Near Highs Raising Accounts Receivable Flags