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The Net Profit Margin is a great profitability Ratio to review right off the bat when looking at a company. While it won’t give investors a definitive answer on a company’s future potential it will give investors a good idea on how profitable its operations are. This profitability Ratio specifically illustrates how much of each dollar earned is translated into profits. A company that can expand its net margin should be rewarded with a higher stock price because this leads to higher profitability.

We ran a screen for companies that outperformed the market last week and hold a sound Net Margin TTM (X>5%). From this narrowed pool we then screened for firm’s with a book value of less than 1.


The list is ranked from highest to lowest by 1-Week Performance.

1. NewStar Financial, Inc. (NASDAQ:NEWS)

Sector

Financial Services

Industry

Credit Services

Market Cap

$422M

Beta

2.76

Analyst Sentiment

1/1-List Hold/Neutral (Neutral)

The company offers customized debt financing solutions in the US. The company's 1-week performance is 1.82%. NEWS’s P/BV Ratio is .75. The Net Margin (TTM) is 22.95%. The short interest is 4% as of 8/15/2011.

2. Cathay General Bancorp (NASDAQ:CATY)

Sector

Financial Services

Industry

Banks - Regional - US

Market Cap

$907M

Beta

0.98

Analyst Sentiment

11/14-List Hold/Neutral (Neutral)


The company operates Cathay Bank, which offers commercial banking products and services. The 1-Week performance is 1.05%. CATY’s P/BV Ratio is .74. The Net Margin (TTM) is 18.82%. The short interest is 7% as of 8/15/2011.

3. DryShips, Inc. (NASDAQ:DRYS)

Sector

Industrials

Industry

Shipping & Ports

Market Cap

$1066M

Beta

3.38

Analyst Sentiment

8/15-List Buy/Outperform (Bullish)


The company owns and operates drybulk carriers and drilling rigs worldwide. The 1-Week performance is 0.74%. DRY’s P/BV Ratio is .31. The Net Margin (TTM) is 21.31%. The short interest is 5% as of 8/15/2011.

4. Shinhan Financial Group Co. (NYSE:SHG)

Sector

Financial Services

Industry

Banks - Regional - Asia

Market Cap

$19319M

Beta

1.97

Analyst Sentiment

22/28-List Buy/Outperform (Bullish)


The company offers financial products and services to a variety of customers in Korea and beyond. The 1-Week performance is .72%. SHG’s P/BV Ratio is 0.84. The Net Margin (TTM) is 23.76%. The short interest is N/A as of 8/15/2011.

5. Tessera Technologies, Inc. (NASDAQ:TSRA)

Sector

Technology

Industry

Semiconductor Equipment & Materials

Market Cap

$667M

Beta

1.32

Analyst Sentiment

2/3-List Buy/Outperform (Bullish)


The company develops and sells miniaturization products and technologies for electronic devices worldwide. The 1-Week performance is 0%. TSRA’s P/BV Ratio is .94. The Net Margin (TTM) is 18.38%. The short interest is 4% as of 8/15/2011.

6. Diana Shipping, Inc. (NYSE:DSX)

Sector

Industrials

Industry

Shipping & Ports

Market Cap

$659M

Beta

1.56

Analyst Sentiment

10/19-List Buy/Outperform (Bullish)


The company operates dry bulk carriers around the world. The 1-Week performance is -.25%. DSX’s P/BV Ratio is .57. The Net Margin (TTM) is 45.49%. The short interest is 3% as of 8/15/2011.


7. Basic Sanitation Company of the State of Sao Paulo (NYSE:SBS)

Sector

Utilities

Industry

Utilities - Regulated Water

Market Cap

$5847M

Beta

1.35

Analyst Sentiment

4/9-List Hold/Neutral (Neutral)

The company provides water and sewage to a variety of customers in the State of Sao Paulo, Brazil. The 1-Week performance is -.33%. SBS’s P/BV Ratio is .95. The Net Margin (TTM) is 16.17%. The short interest is N/A as of 8/15/2011.

8. Molson Coors Brewing Company (NYSE:TAP)

Sector

Consumer Defensive

Industry

Beverages – Brewers

Market Cap

$8029M

Beta

0.72

Analyst Sentiment

8/12-List Hold/Neutral (Neutral)


The company brews and distributes beer brands. The 1-Week performance is -.88%. TAP’s P/BV Ratio is .99. The Net Margin (TTM) is 20.14%. The short interest is 2% as of 8/15/2011.

9. Banco Santander Brasil SA/Braz (NYSE:BSBR)

Sector

Financial Services

Industry

Banks - Regional - Latin America

Market Cap

$33330M

Beta

1.1

Analyst Sentiment

8/12-List Buy/Outperform (Bullish)


The company operates as a full-service bank in Brazil. The 1-Week performance is -1.02%. BSBR’s P/BV Ratio is .82. The Net Margin (TTM) is 27.86%. The short interest is N/A as of 8/15/2011.

10. United Microelectronics Corp. (NYSE:UMC)

Sector

Technology

Industry

Semiconductors

Market Cap

$4711M

Beta

1.06

Analyst Sentiment

16/25-List Hold/Neutral (Neutral)

The company operates as a semiconductor wafer foundry. The 1-Week performance is -1.05%. UMC’s is P/BV Ratio is .62. The Net Margin (TTM) is 19.11%. The short interest is N/A as of 8/15/2011.



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

Source: 10 Heavily Undervalued Stocks Rallying Despite Market Uncertainty