8 Stocks With Momentum That Keep It Simple By Maximizing Profitability With Firm Assets

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 |  Includes: BVN, CBOE, CEL, ENL, MSFT, PT, RELX, TSM
by: Follow My Alpha

While some investors are ready to pull out there hair due to the antics of the market, others are leaning back in their seats with a big smile. Why, you ask? They're smiling because these investors have put their capital in firms that not only pay them dividends to take market risk but also performed very well in a choppy economy by maximizing company assets. This may sound too simple for some, but there is a reason the old adage “keep it simple” is still being used in today’s complex world and the proof is in the pudding.

Return on Assets (ROA) is a profitability ratio that lets investors know exactly how much earnings are being generated solely off a firm’s assets. This helps investors judge management’s effectiveness relative to maximizing a firm’s current asset base. Remember, any management team can make some level of return by throwing money at a situation, but only a few can make large returns on small investments.

The first thing we did was look at dividend stocks with a strong twelve-month trailing ROA (X>20%). From this narrowed list of candidates, we screened for firms that are currently trading at no less than 20% from their 52-week highs. Why you wonder? The number shows these firms are doing something right consistently. The real question is "as an investor do you think the firms listed here have room to go even higher?"

The list is ranked from highest to lowest by the Return on Assets (TTM):

1. Portugal Telecom SA. (NYSE:PT)

Sector

Commun Services

Industry

Telecom Services

Market Cap

$6,218M

Beta

0.83

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The Company provides telecom and multimedia services within Brazil & Portgul. The dividend yield is 13.03 %. The company has an ROA (TTM) of 37.3%. PT is trading 6.95% below its 52-week highs. The short interest was N/A as of 09/30/2011.

2. Reed Elsevier PLC. (RUK)

Sector

Consumer Cyclical

Industry

Publishing

Market Cap

$10,287M

Beta

0.59

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The firm is an information provider and publisher. The dividend yield is 3.92 %. The company has an ROA (TTM) of 31.30 %. RUK is trading 16.75 % below its 52-week highs. The short interest was N/A as of 09/30/2011.

3. Reed Elsevier NV. (NYSE:ENL)

Sector

Consumer CyclIcal

Industry

Publishing

Market Cap

$8,480M

Beta

0.65

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The firm is an information provider and publisher. The dividend yield is 4.08%. The company has an ROA (TTM) of 31.19%. ENL is trading 16.96% below its 52-week highs. The short interest was N/A as of 09/30/2011.

4. CBOE Holdings, Inc. (NASDAQ:CBOE)

Sector

Financial Services

Industry

Financial Exchanges

Market Cap

$2,315M

Beta

N/A

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The dividend yield is 1.64%. The company has an ROA (TTM) of 30.73%. CBOE is trading 18.65% below its 52-week highs. The short interest was 3.70% as of 09/30/2011.

5. Microsoft Corporation. (NASDAQ:MSFT)

Sector

Technology

Industry

Software - Infrastructure

Market Cap

$228,475M

Beta

1.02

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The world’s top software firm with operating programs such as Windows under its belt. The dividend yield is 2.36%. The company has an ROA (TTM) of 21.30%. MSFT is trading 14.84% below its 52-week highs. The short interest was 1.10% as of 09/30/2011.

6. Taiwan Semiconductor Manufacturing (NYSE:TSM)

Sector

Technology

Industry

Semiconductors

Market Cap

$63,127M

Beta

1.06

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The firm makes and sells semiconductors. The dividend yield is 3.40%. The company has an ROA (TTM) of 20.81%. TSM is trading 18.14% below its 52-week highs. The short interest was N/A as of 09/30/2011.

7. Cellcom Israel, Ltd. (NYSE:CEL)

Sector

Communication Services

Industry

Telecom Services

Market Cap

$2,153M

Beta

0.80

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The firm offers cellur comm. services within in Israel. It offers a range of cellular services through its cellular networks. The dividend yield is 12.90%. The company has an ROA (TTM) of 20.40%. CEL is trading 14.74% below its 52-week highs. The short interest was 0.40% as of 09/30/2011.

8. Buenaventura Mining Company In. (NYSE:BVN)

Sector

Basic Materials

Industry

Gold

Market Cap

$9,772M

Beta

0.81

Click to enlarge

The firm mines and produces gold, silver and other metals. The dividend yield is 1.22%. The company has an ROA (TTM) of 20.07%. BVN is trading 9.00% below its 52-week highs. The short interest was N/A as of 09/30/2011.

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