3 Industrial Stocks Operating With Great Profitability And Cash To Spend

Includes: FAST, FLIR, PCP
by: ZetaKap

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 companies that are improving profitability over time and managing the economic landscape better than competitors.

The Current ratio is a liquidity ratio used to determine a company's financial health. The metric illustrates how easily a firm can pay back its short obligations all at once through current assets. A company that has a current ratio of one or less is generally a liquidity red flag. Now this doesn't mean the company will go bankrupt tomorrow, but it also doesn't bode well for the company, and may indicate that it could have an issue paying back upcoming obligations.

We first looked for Industrial stocks with strong profit margins (1-year operating margin>15%) and with a large amount of cash on hand (Current Ratio>2). We did not screen out any market caps.

1) Fastenal Company (FAST)

  • Sector: Industrial Goods
  • Industry: General Building Materials
  • Market Cap: $14.45B
  • Beta: 0.97
  • FAST has a Operating Profit Margin of 20.97% and a Current Ratio of 5.71.
  • The short interest was 6.81% as of 04/15/2012.

Fastenal Company, together with its subsidiaries, operates as a wholesaler and retailer of industrial and construction supplies in the United States and internationally. It offers a fastener product line under two categories, which include threaded fasteners, such as bolts, nuts, screws, studs, and related washers that are used in manufactured products and building projects, as well as in the maintenance and repair of machines and structures; and miscellaneous supplies and hardware comprising various pins and machinery keys, concrete anchors, metal framing systems, wire ropes, strut products, rivets, and related accessories. The company serves the construction market, which consists of general, electrical, plumbing, sheet metal, and road contractors; and manufacturing market, including original equipment manufacturers, and maintenance and repair operations, as well as other users, such as farmers, truckers, railroads, mining companies, federal, state and local governmental entities, schools, and retail trades.

2) FLIR Systems, Inc. (FLIR)

  • Sector: Industrial Goods
  • Industry: Aerospace/Defense Products & Services
  • Market Cap: $3.64B
  • Beta: 0.84
  • FLIR has a Operating Profit Margin of 20.28% and a Current Ratio of 5.33.
  • The short interest was 4.71% as of 04/15/2012.

FLIR Systems, Inc. designs, manufactures, and markets thermal imaging systems worldwide. The company operates through two divisions, Commercial Systems and Government Systems.

3) Precision Castparts Corp. (PCP)

  • Sector: Industrial Goods
  • Industry: Metal Fabrication
  • Market Cap: $24.67B
  • Beta: 1.30
  • PCP has a Operating Profit Margin of 24.59% and a Current Ratio of 3.33.
  • The short interest was 1.20% as of 04/15/2012.

Precision Castparts Corp. manufactures and sells metal components and products worldwide. Its Investment Cast Products segment offers aerospace structural and airfoil castings; industrial gas turbine (IGT) castings; artificial hips and knees; landing gear struts and engine inlets for unmanned aerial vehicles; impellers for pumps and compressors; components for armament systems; and alloys for other manufacturers of investment castings.

*Company profiles were sourced from Finviz.

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