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With so much going on in the market it has become seemingly more difficult to keep up and or understand what the "official" story is relative to economic expectations. Analysts are now changing their forecasts so often relative to expected global and domestic growth that it could make an investor's head go around like a screw top. In order to cut through the clutter, achieve objective clarity, and most importantly to indentify potential opportunities, we decided to search for companies that have illustrated strong top line growth along with profitability over multiple consecutive quarters.

The 1-year fiscal revenue growth rate is a performance metric used to identify companies that have performed well over multiple quarters. While sometimes a company may become “hot” due to one amazing quarter, taking a longer time horizon often helps investors potentially indentify what companies are actually performing well on an extended basis. In addition, the 1-year fiscal revenue growth rate illustrates how well a company was able to grow the top line over multiple quarters as the economic landscape has changed.

Return on Assets (TTM) is a profitability metric that illustrates the efficiency of management relative to generating earnings with a company’s assets. This ratio is calculated by dividing a companies trailing twelve-month earnings over total assets. This is perhaps one of the easiest ways to quantify management skills because it illustrates how effective they are at using a company's assets in order to generate earnings for shareholders.

We first ran a screen for companies that had posted strong top line growth over the last fiscal year (1-year fiscal revenue growth rate>30%). From this narrowed pool we then screened for those that had illustrated strong profitability relative to their twelve month trailing ROA (X>15%). We did not screen out any sectors but we did exclusively focus on mid cap stocks for this article.

We have listed the companies from highest to lowest by the 1-year fiscal revenue growth rate:

1. InterMune, Inc. (ITMN)

Sector

Healthcare

Industry

Biotechnology

Market Cap

$1,359M

Beta

2.52

The company develops and sells pulmonology and hepatology therapies. The company’s 1-year fiscal revenue growth rate is 432.43%. ITMN has a ROA (TTM) of 40.10%. The short interest was N/A as of 09/30/2011.

2. Veeco Instruments Inc. (VECO)

Sector

Technology

Industry

Semiconductor Equipment & Materials

Market Cap

$1,010M

Beta

2.94

Designs, sells, and services a line of equipment for manufacturers in the data storage, scientific and industrial research, and other industries. The company’s 1-year fiscal revenue growth rate is 230.45%. VECO has a ROA TTM of 31.51%. The short interest was 30.90% as of 09/30/2011.

3. Impax Laboratories, Inc. (IPXL)

Sector

Healthcare

Industry

Drug Manufacturers - Specialty & Generic

Market Cap

$1,252M

Beta

0.58

The company’s 1-year fiscal revenue growth rate is 145.39 %. IPXL has a ROA TTM of 36.12 %. The short interest was 9.10% as of 09/30/2011.

4. Varian Semiconductor Equipment. (VSEA)

Sector

Technology

Industry

Semiconductor Equipment & Materials

Market Cap

$4,815M

Beta

1.20

Offers after-market products, trainings, and other services to help increase utilization and productivity for its clients. The company’s 1-year fiscal revenue growth rate is 129.72%. VSEA has a ROA TTM of 16.94%. The short interest was N/A as of 09/30/2011.

5. Leucadia National Corporation. (LUK)

Sector

Industrials

Industry

Conglomerates

Market Cap

$5,916M

Beta

1.93

A diversified holding company with exposure ranging from manufacturing to winery operations and more. The company’s 1-year fiscal revenue growth rate is 129.48%. LUK has a ROA TTM of 21.10%. The short interest was 2.30% as of 09/30/2011.

6. Teradyne Inc. (TER)

Sector

Technology

Industry

Semiconductor Equipment & Materials

Market Cap

$2,335M

Beta

1.95

Supplies automatic test equipment products to a variety of different markets. The company’s 1-year fiscal revenue growth rate is 96.32%. TER has a ROA TTM of 20.98%. The short interest was N/A as of 09/30/2011.

7. Oshkosh Corporation. (OSK)

Sector

Industrials

Industry

Truck Manufacturing

Market Cap

$1,669M

Beta

2.63

Designs, builds, and sells specialty vehicles along with vehicle bodies around the world. The company’s 1-year fiscal revenue growth rate is 87.36%. OSK has a ROA TTM of 16.78%. The short interest was 6.20% as of 09/30/2011.

8. KLA-Tencor Corporation. (KLAC)

Sector

Technology

Industry

Semiconductor Equipment & Materials

Market Cap

$7,219M

Beta

1.79

The company offers supply control and yield management for multiple industries. The company’s 1-year fiscal revenue growth rate is 74.39%. KLAC has a ROA TTM of 16.99%. The short interest was 6.50% as of 09/30/2011.

9. Walter Energy Inc. (WLT)

Sector

Basic Materials

Industry

Coal

Market Cap

$4,493M

Beta

2.05

Offers a diversified line of products and services ranging from coal to home construction. The company’s 1-year fiscal revenue growth rate is 64.22%. WLT has a ROA TTM of 23.27%. The short interest was 3.40% as of 09/30/2011.

10. Lululemon Athletica, Inc. (LULU)

Sector

Consumer Cyclical

Industry

Apparel Stores

Market Cap

$5,715M

Beta

Retails popular athletic apparel in North America. The company’s 1-year fiscal revenue growth rate is 57.14%. LULU has a ROA TTM of 24.40%. The short interest was 16.90% as of 09/30/2011.

We hope this list helps as investors do their own due diligence on companies that illustrate top line growth through their 1-year fiscal revenue growth rate and profitability relative to their ROA TTM. Last, these were the top ten companies listed at the time this article was written.


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

Source: 10 Stocks With Blockbuster Revenue Growth And Profitability Despite Economic Turmoil