7 Highly Efficient Companies Boosting Earnings Guidance

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Includes: EMN, GDI, NAV, PH, PRGO, ROK, TPX
by: Kapitall

The following list might offer an interesting starting point to momentum investors. All of these stocks have recently raised guidance above analyst estimates, suggesting that the analyst community is underestimating these names.

In addition, all of these stocks are more efficient than their competitors, when comparing ratios like Revenue per Employee, Asset Turnover and Inventory Turnover.

Judging by recent performance, it seems likely that there's more good news to be priced into these names. Do you agree? Full details below.

Efficiency data sourced from Fidelity, 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.

1. Parker Hannifin Corporation (NYSE:PH): Industrial Equipment & Components Industry. Market cap of $15.15B. Recently guided FY11 at $5.80-6.20 vs. estimate of $5.82.

TTM Revenue per Employee at $202,530 vs. industry average at $384,840. TTM Asset Turnover at 1.08 vs. industry average at 0.88. TTM Inventory Turnover at 6.49 vs. industry average at 4.78. TTM Receivables Turnover at 6.84 vs. industry average at 4.85.

Short float at 1.74%, which implies a short ratio of 2.35 days. The stock has gained 70.14% over the last year.

Other Highlights:

The company outperformed analyst earnings estimates during the most recent quarter, suggesting that the analyst community is underestimating the stock. The company reported earnings per share of $1.39 per share, and exceeded the First Call Consensus of $1.30 (Q2 Earnings on 01/20/11). The company also outperformed analyst estimates over the last year, reporting earnings per share at $3.40, beating the consensus view at $3.11 (based on the estimates of 18 analysts).

2. Rockwell Automation Inc. (NYSE:ROK): Industrial Electrical Equipment Industry. Market cap of $12.51B. Recently guided FY11 at $4.30-4.60 vs. estimate of $4.08.

TTM Revenue per Employee at $271,330 vs. industry average at $227,820. TTM Asset Turnover at 1.1 vs. industry average at 0.9. TTM Inventory Turnover at 5.14 vs. industry average at 5.49. TTM Receivables Turnover at 6.02 vs. industry average at 5.21.

Short float at 2.53%, which implies a short ratio of 2.98 days. The stock has gained 74.53% over the last year.

Other Highlights:

- When compared to industry competitors, the company reported better than average profit margins during the most recent quarter. Gross margins came in at 42.16%, higher than the industry average at 36.1% (most recent quarter, annualized). Operating margin came in at 14.14%, higher than the industry average at 10.21%, while net profit margin came in at 14.14% vs. the industry average at 10.21%.

3. Perrigo Co. (NASDAQ:PRGO): Drug Related Products Industry. Market cap of $6.78B. Recently guided FY11 at $3.75-3.90 vs. estimate of $3.69.

TTM Revenue per Employee at $326,820 vs. industry average at $517,190. TTM Asset Turnover at 0.89 vs. industry average at 0.57. TTM Inventory Turnover at 3.46 vs. industry average at 2.34. TTM Receivables Turnover at 6.37 vs. industry average at 5.41.

Short float at 3%, which implies a short ratio of 3.32 days. The stock has gained 52% over the last year.

Other Highlights:

- The company's capital spending accelerated by 15.82% over the last five years, much faster than the industry average of 1.39%. At least theoretically, this makes them more competitive over the coming years, since their operational assets are more up-to-date.

4. Eastman Chemical Co. (NYSE:EMN):
Chemicals Industry. Market cap of $6.73B. Recently guided Q1 at $1.75-1.85 vs. estimate of $1.67.

TTM Revenue per Employee at $648,000 vs. industry average at $769,050. TTM Asset Turnover at 1.1 vs. industry average at 0.8. TTM Inventory Turnover at 7.49 vs. industry average at 6.13. TTM Receivables Turnover at 8.27 vs. industry average at 6.64.

Short float at 8.96%, which implies a short ratio of 6.49 days. The stock has gained 65.37% over the last year.

5. Navistar International Corp. (NYSE:NAV): Trucks & Other Vehicles Industry. Market cap of $4.7B. Recently guided FY11 at $5.00-6.00 vs. estimate of $4.67.

TTM Revenue per Employee at $768,670 vs. industry average at $235,185,870. TTM Asset Turnover at 1.31 vs. industry average at 0.88. TTM Inventory Turnover at 5.66 vs. industry average at 4.78. TTM Receivables Turnover at 4.97 vs. industry average at 4.85.

Short float at 7.81%, which implies a short ratio of 3.87 days. The stock has gained 66.79% over the last year.

Other Highlights:

- Judging by the company's cash holdings, shares look to offer good value at current levels. Price / Cashflow per Share, based on the most recent quarter's cash flow numbers, came in at 9.84, lower than the industry average of 11.78. It's also worth pointing out that the company's trailing twelve month Price / Cashflow per Share came in at 8.52, lower than the industry average of 14.48.

6. Gardner Denver Inc. (NYSE:GDI): Diversified Machinery Industry. Market cap of $4.02B. Recently guided Q1 at $0.90-0.95 vs. estimate of $0.87.

TTM Revenue per Employee at $291,550 vs. industry average at $385,580. TTM Asset Turnover at 0.97 vs. industry average at 0.88. TTM Inventory Turnover at 5.32 vs. industry average at 4.78. TTM Receivables Turnover at 5.37 vs. industry average at 4.85.

Short float at 0.82%, which implies a short ratio of 1.31 days. The stock has gained 91.83% over the last year.

Other Highlights:

- The company has demonstrated rapid cash flow growth over the last five years, which may lower their risk going forward. Five year average cash flow growth at 10.32%, much higher than the industry average at 2.95%.

7. Tempur Pedic International Inc. (NYSE:TPX): Home Furnishings & Fixtures Industry. Market cap of $3.34B. Recently guided FY11 at $2.60-2.75 vs. estimate of $2.49.

TTM Revenue per Employee at $736,950 vs. industry average at $492,410. TTM Asset Turnover at 1.58 vs. industry average at 0.87. TTM Inventory Turnover at 7.63 vs. industry average at 4.9. TTM Receivables Turnover at 9.32 vs. industry average at 15.24.

Short float at 9.96%, which implies a short ratio of 7.34 days. The stock has gained 79.08% over the last year.

Other Highlights:

- The company has a track record of outperforming its competitors. Over the last five years, EPS grew by 17.36%, higher than the industry average at -8.14%, while revenues grew by 5.73%, outperforming the industry average at 2.47%.

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