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This week we found a few names that have not only been outperforming the market but continue to do well for investors by generating strong profit margins and not relying heavily on debt. Sounds like the promised land? We'll let you decide but either way, in our view, these rallying names deserve a review given their low debt, high profit margin operations, which are keeping their investors happy.

The Operating Profit Margin is a profitability ratio that measures the effectiveness of the company's operating efficiency. This metric allows investors to see how much profit is left after all variable costs are covered. If the company's margin is increasing over time this means that it’s earning more per dollar of sales. Finding trends in the Operating Profit Margin helps investors identify company's that are improving profitability over time and managing the economic landscape better than competitors.

The Debt/Equity Ratio illustrates how aggressively a firm is financing its growth via debt. The more debt financing that is used in a capital structure the more volatile earnings can become due to the additional interest expense. Should a company's potentially “enhanced” earnings fail to exceed the cost associated with debt financing over time this can lead the firm toward substantial trouble.

We first looked for companies with strong profit margins (1-year operating margin>15%) that have outperformed the market (S&P500) in the last week. From this narrowed list of candidates we filtered out companies that have achieved this level of profitability while maintaining a sound capital structure ((D/E Ratio<.3). We did not screen out any sectors or market caps.

The list is ranked from highest to lowest by the company's 1-week return:

1. Mercadolibre, Inc. (MELI)

Sector

Industrials

Industry

Business Services

Market Cap

$3,666M

Beta

1.33

The company hosts online commerce and payments platforms in Latin America. Its services are designed to provide its users with mechanisms to buy, sell, pay for, and collect on e-commerce transactions. MELI has a 1-year fiscal operating profit margin of 34.42% & has a Debt/Equity level of 0.02%. The company has gained 25.25% over the last week. The short interest was 8.80% as of 10/14/2011.

2. Power-One, Inc. (PWER)

Sector

Technology

Industry

Electronic Components

Market Cap

$571M

Beta

2.09

The company designs, manufactures, and markets power conversion and power management solutions for the renewable energy (RE), communications infrastructure, and other technology markets. PWER has a 1-year fiscal operating profit margin of 25.27% & has a Debt/Equity level of 0.10%. The company has gained 13.24% over the last week. The short interest was 27.60% as of

10/14/2011.

3. Randgold Resources, Ltd. (GOLD)

Sector

Basic Materials

Industry

Gold

Market Cap

$10,824M

Beta

0.20

The company engages in exploring, developing, and operating gold mines in west and east Africa. GOLD has a 1-year fiscal operating profit margin of 26.84% & has a Debt/Equity level of 0.00%. The company has gained 5.60% over the last week.The short interest was N/A as of 10/14/2011.

4. Goldcorp, Inc. (GG)

Sector

Basic Materials

Industry

Gold

Market Cap

$42,033M

Beta

0.16

The company engages in the acquisition, exploration, development, and operation of precious metal properties in Canada, the United States, Mexico, and Central and South America. GG has a 1-year fiscal operating profit margin of 38.67% & has a Debt/Equity level of 0.03%. The company has gained 5.81% over the last week. The short interest was N/A as of 10/14/2011.

5. Ansys, Inc. (ANSS)

Sector

Technology

Industry

Software - Application

Market Cap

$5,347M

Beta

1.06

The company engages in the development and marketing of engineering simulation software and services used by engineers and designers in aerospace, automotive, manufacturing, electronics, biomedical, energy, and defense industries. ANSS has a 1-year fiscal operating profit margin of 37.79% & has a Debt/Equity level of 0.06%. The company has gained 5.48% over the last week.The short interest was 1.40% as of 10/14/2011.

6. Yamana Gold, Inc. (AUY)

Sector

Basic Materials

Industry

Gold

Market Cap

$12,057M

Beta

0.18

The company engages in gold and other precious metals mining, and related activities, including exploration, extraction, processing, and reclamation. AUY has a 1-year fiscal operating profit margin of 33.86% & has a Debt/Equity level of0.06%. The company has gained 4.57% over the last week. The short interest wasN/A as of 10/14/2011.

7. Tenaris SA. (TS)

Sector

Basic Materials

Industry

Steel

Market Cap

$20,730M

Beta

1.70

The company engages in the manufacture and sale of steel pipe products. TS has a 1-year fiscal operating profit margin of 20.40% & has a Debt/Equity level of 0.02%. The company has gained 2.09% over the last week. The short interest was N/A as of 10/14/2011.

8. Buenaventura Mining Company In. (BVN)

Sector

Basic Materials

Industry

Gold

Market Cap

$11,183M

Beta

0.24

The company engages in the exploration, mining, processing, and development of gold, silver, and other metals in Peru. BVN has a 1-year fiscal operating profit margin of 39.64% & has a Debt/Equity level of 0.03%. The company has gained .56% over the last week. The short interest was N/A as of 10/14/2011.

9. ResMed Inc. (RMD)

Sector

Healthcare

Industry

Medical Instruments & Supplies

Market Cap

$4,353M

Beta

0.40

The company engages in the development, manufacture, and distribution of medical equipment for treating, diagnosing, and managing sleep-disordered breathing and other respiratory disorders. RMD has a 1-year fiscal operating profit margin of 21.47% & has a Debt/Equity level of 0.05%. The company has gained .41% over the last week. The short interest was 7.20% as of 10/14/2011.

10. Silver Wheaton Corporation. (SLW)

Sector

Basic Materials

Industry

Silver

Market Cap

$12,744M

Beta

0.96

The company Silver Wheaton Corp., together with its subsidiaries, operates as a silver streaming company worldwide. SLW has a 1-year fiscal operating profit margin of 61.03% & has a Debt/Equity level of 0.03%. The company has gained .33% over the last week. The short interest was N/A as of 10/14/2011.

We hope this helps as investors do their own due diligence and research on rallying stocks.

*The companies profiles were sourced from Finviz.

Source: 10 Profitable Stocks With Little Debt Which Are Rallying Higher