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If you are looking to decrease your portfolio’s systemic risk, then this may be an interesting starting point for your own analysis.

To construct this list be looked for stocks with these characteristics:

  • 5-year EPS growth rate above 20%
  • Beta below 1
  • Rising return on equity for the recent quarter, on a year-over-year basis

We then focused on those candidates that experienced favorable DuPont trends:

  • Improving profit margin, i.e. higher Net Income/ Revenues
  • Improving asset turnover, i.e. higher Sales/Assets
  • And decreasing leverage ratio, i.e. lower Assets/Equity

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.



We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.


Considering this information, which of these stocks are you most bullish about? All accounting values refer to the most recent quarter, compared to last year's comparable quarter.

1. CEVA Inc. (NASDAQ:CEVA): Semiconductor Industry. Market cap of $734.98M. Five-year EPS growth rate at 30.57%. Beta at 0.93. Return on equity increased from 1.51% to 2.72%. When analyzing the sources of return, net profit margin increased from 19.43% to 30.9%. Sales/assets increased from 0.07 to 0.08, while assets/equity decreased from 1.11 to 1.1. The stock has gained 182.8% over the last year.

2. Coinstar Inc. (CSTR): Business Equipment Industry. Market cap of $1.58B. Five-year EPS growth rate at 22.28%. Beta at 0.75. Return on equity increased from 1.53% to 2.02%. When analyzing the sources of return, net profit margin increased from 1.99% to 2.0%. Sales/assets increased from 0.26 to 0.36, while assets/equity decreased from 2.96 to 2.8. The stock is a short squeeze candidate, with a short float at 41.02% (equivalent to 11.04 days of average volume). It has been a rough couple of days for the stock, losing 5.43% over the last week.

3. Franklin Electric Co. Inc. (NASDAQ:FELE):
Industrial Electrical Equipment Industry. Market cap of $1.0B. Five-year EPS growth rate at 40.0%. Beta at 0.87. Return on equity increased from 1.87% to 2.4%. When analyzing the sources of return, net profit margin increased from 4.58% to 5.76%. Sales/assets increased from 0.22 to 0.23, while assets/equity decreased from 1.86 to 1.81. The stock has gained 56.93% over the last year.

4. Old Dominion Freight Line Inc. (NASDAQ:ODFL):
Trucking Industry. Market cap of $1.98B. Five-year EPS growth rate at 22.44%. Beta at 0.62. Return on equity increased from 1.3% to 2.96%. When analyzing the sources of return, net profit margin increased from 2.42% to 5.1%. Sales/assets increased from 0.27 to 0.31, while assets/equity decreased from 1.99 to 1.87. The stock has gained 49.87% over the last year.

5. OSI Systems, Inc. (NASDAQ:OSIS):
Semiconductor Equipment and Materials Industry. Market cap of $754.0M. Five-year EPS growth rate at 20.7%. Beta at 0.78. Return on equity increased from 1.97% to 2.47%. When analyzing the sources of return, net profit margin increased from 4.2% to 5.01%. Sales/assets increased from 0.29 to 0.32, while assets/equity decreased from 1.62 to 1.54. The stock has gained 53.53% over the last year.

6. Open Text Corp. (NASDAQ:OTEX):
Application Software Industry. Market cap of $3.65B. Five-year EPS growth rate at 22.1%. Beta at 0.7. Return on equity increased from 1.48% to 3.64%. When analyzing the sources of return, net profit margin increased from 6.16% to 13.63%. Sales/assets increased from 0.12 to 0.14, while assets/equity decreased from 2 to 1.91. The stock is a short squeeze candidate, with a short float at 9.52% (equivalent to 16.11 days of average volume). The stock has gained 58.53% over the last year.

7. Tredegar Corp. (NYSE:TG): Rubber and Plastics Industry. Market cap of $579.20M. Five-year EPS growth rate at 21.9%. Beta at 0.62. Return on equity increased from 1.38% to 1.54%. When analyzing the sources of return, net profit margin increased from 3.3% to 3.48%. Sales/assets increased from 0.3 to 0.32, while assets/equity decreased from 1.39 to 1.38. The stock has performed poorly over the last month, losing 13.06%.

8. TIM Participacoes S.A. (NYSE:TSU):
Wireless Communications Industry. Market cap of $12.43B. Five-year EPS growth rate at 30.37%. Beta at 0.95. Return on equity increased from 0.62% to 2.04%. When analyzing the sources of return, net profit margin increased from 1.66% to 5.69%. Sales/assets increased from 0.19 to 0.2, while assets/equity decreased from 1.97 to 1.79. The stock has had a good month, gaining 13.8%.

*Data sourced from Google Finance and Finviz.

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

Source: Growth Ideas: 8 High Growth, Low Beta Stocks With Encouraging DuPont Breakdowns