Interested in industrial companies? Looking for ways to dip deeper into a company's profitability? Company liquidity is an important consideration in any stock analysis. Liquidity gives a company the ability to make big acquisitions if it sees investment opportunities, a cushion for future lulls in demand, and most importantly, it keeps a company's doors open. Are these the types of stocks that you're looking for? For ideas on how to go about your analysis, here is a list you might be interested in.
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.
Do you think these industrial stocks will go up in price? Use this list as a starting-off point for your own analysis.
1) FLIR Systems, Inc. (NASDAQ:FLIR)
|Industry:||Aerospace/Defense Products & Services|
FLIR Systems, Inc. has a Operating Profit Margin of 20.28% and Current Ratio of 5.33. The short interest was 4.71% as of 04/22/2012. FLIR Systems, Inc. designs, manufactures, and markets thermal imaging systems worldwide. The company operates through two divisions, Commercial Systems and Government Systems. The Commercial Systems division designs, manufactures, and markets instrument, sensor, and electronics solutions that facilitate improved situational awareness and environmental analytics for commercial customers.
2) Precision Castparts Corp. (BATS:PCP)
Precision Castparts Corp. has a Operating Profit Margin of 24.59% and Current Ratio of 3.33. The short interest was 1.20% as of 04/22/2012. 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. The company's Forged Products segment provides forged components for jet engines, including fan discs, compressor discs, turbine discs, seals, spacers, shafts, hubs, and cases; airframe structural components, such as landing gear beams, bulkheads, wing structures, engine mounts, struts, tail flaps, and housings; discs, spacers, and valve components for steam turbine and IGT engines; shafts, cases, and compressor and turbine discs for marine gas engines; mechanical and structural tubular forged products for energy markets; and forged components for propulsion systems on nuclear submarines and aircraft carriers, as well as forgings for pumps, valves, and structural applications.
3) Fastenal Company (NASDAQ:FAST)
|Industry:||General Building Materials|
Fastenal Company has a Operating Profit Margin of 20.97% and Current Ratio of 5.71. The short interest was 6.83% as of 04/22/2012. 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 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.
*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.