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One way to gauge profitability is by comparing EBITDA (earnings before interest, taxes, depreciation, and amortization) to common equity. This standardizes the number for firms of different sizes.

We wanted to use this metric to find companies that have seen significant growth in their profitability over the last 5 years, with trailing-twelve-month EBITDA/common equity at least 20% higher than their 5-year average. To control for big interest payments that can eat into shareholder value (and are not reflected in EBITDA), we also screened for companies that have seen significant increases in the interest coverage ratio (EBIT/Interest expense) year-over-year.

On top of that universe, we searched for stocks with bullish changes in the put/call ratio over the last two weeks.

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.


(Click to enlarge)

Do you think options traders are predicting it right on these names? Use this list as a starting-off point for your own analysis.

List sorted by decrease in put/call ratio.

1. Duke Realty Corp. (NYSE:DRE): REIT. Market cap of $3.53B. TTM EBITDA/common equity at 0.36 vs. 5-year average at 0.27. TTM interest coverage ratio at 1.36 vs. prior-year TTM ratio at -0.53. Put/call ratio decreased 77.27% over the last ten trading days (from 0.66 to 0.15). The stock has gained 29.93% over the last year.

2. Nordson Corporation (NASDAQ:NDSN): Diversified Machinery Industry. Market cap of $3.69B. TTM EBITDA/common equity at 0.63 vs. 5-year average at 0.32. TTM interest coverage ratio at 79.56 vs. prior-year TTM ratio at -10.96. Put/call ratio decreased 76.92% over the last ten trading days (from 2.6 to 0.6). The stock has gained 94.49% over the last year.

3. NCR Corp. (NYSE:NCR): Information Technology Services Industry. Market cap of $2.97B. TTM EBITDA/common equity at 0.35 vs. 5-year average at 0.24. TTM interest coverage ratio at 123.0 vs. prior-year TTM ratio at 14.83. Put/call ratio decreased 68.57% over the last ten trading days (from 0.35 to 0.11). The stock has gained 54.62% over the last year.

4. Virgin Media, Inc. (NASDAQ:VMED): CATV Systems Industry. Market cap of $9.90B. TTM EBITDA/common equity at 1.15 vs. 5-year average at 0.52. TTM interest coverage ratio at 0.75 vs. prior-year TTM ratio at 0.22. Put/call ratio decreased 66.41% over the last ten trading days (from 1.28 to 0.43). The stock is a short squeeze candidate, with a short float at 7.95% (equivalent to 7.33 days of average volume). The stock has gained 88% over the last year.

5. Brinks Co. (NYSE:BCO): Security & Protection Services Industry. Market cap of $1.35B. TTM EBITDA/common equity at 0.58 vs. 5-year average at 0.45. TTM interest coverage ratio at 13.02 vs. prior-year TTM ratio at 5.87. Put/call ratio decreased 65.24% over the last ten trading days (from 2.33 to 0.81).

6. GT Solar International, Inc. (SOLR): Semiconductor Industry. Market cap of $1.98B. TTM EBITDA/common equity at 1.49 vs. 5-year average at 1.19. TTM interest coverage ratio at 113.64 vs. prior-year TTM ratio at 42.67. Put/call ratio decreased 62.41% over the last ten trading days (from 1.33 to 0.5). The stock might be undervalued at current levels, with a PEG ratio at 0.88, and P/FCF ratio at 8.99.

7. CMS Energy Corp. (NYSE:CMS): Diversified Utilities Industry. Market cap of $4.98B. TTM EBITDA/common equity at 0.58 vs. 5-year average at 0.44. TTM interest coverage ratio at 2.59 vs. prior-year TTM ratio at 1.71. Put/call ratio decreased 60.81% over the last ten trading days (from 1.48 to 0.58). The stock has gained 40.43% over the last year.

8. Eastman Chemical Co. (NYSE:EMN): Chemicals Industry. Market cap of $7.19B. TTM EBITDA/common equity at 0.66 vs. 5-year average at 0.48. TTM interest coverage ratio at 9.79 vs. prior-year TTM ratio at 5.99. Put/call ratio decreased 58.33% over the last ten trading days (from 0.96 to 0.4). The stock has gained 93.73% over the last year.

9. Brookdale Senior Living Inc. (NYSE:BKD): Long-Term Care Facilities Industry. Market cap of $2.95B. TTM EBITDA/common equity at 0.33 vs. 5-year average at 0.17. TTM interest coverage ratio at 0.41 vs. prior-year TTM ratio at 0.26. Put/call ratio decreased 55.56% over the last ten trading days (from 0.09 to 0.04). This is a risky stock that is significantly more volatile than the overall market (beta = 2.95). The stock has gained 61.% over the last year.

10. Alliance Holdings GP, L.P. (NASDAQ:AHGP): Nonmetallic Mineral Mining Industry. Market cap of $2.99B. TTM EBITDA/common equity at 1.67 vs. 5-year average at 1.27. TTM interest coverage ratio at 11.69 vs. prior-year TTM ratio at 7.40. Put/call ratio decreased 52.38% over the last ten trading days (from 0.42 to 0.2). The stock has had a couple of great days, gaining 6.14% over the last week.

11. KLA-Tencor Corporation (NASDAQ:KLAC): Semiconductor Equipment & Materials Industry. Market cap of $6.67B. TTM EBITDA/common equity at 0.43 vs. 5-year average at 0.11. TTM interest coverage ratio at 19.17 vs. prior-year TTM ratio at 5.0. Put/call ratio decreased 50.67% over the last ten trading days (from 0.75 to 0.37). The stock has gained 45.04% over the last year.

12. Illumina Inc. (NASDAQ:ILMN): Biotechnology Industry. Market cap of $9.27B. TTM EBITDA/common equity at 0.29 vs. 5-year average at 0.09. TTM interest coverage ratio at 13.25 vs. prior-year TTM ratio at 9.43. Put/call ratio decreased 50.0% over the last ten trading days (from 0.84 to 0.42). The stock is a short squeeze candidate, with a short float at 16.98% (equivalent to 13.07 days of average volume). The stock has gained 72.98% over the last year.

*EBITDA and interest coverage data sourced from Screener.co, options data sourced from Schaeffer’s, all other data sourced from Finviz.

Source: 12 Highly Profitable Stocks With Bullish Options Sentiment