Seeking Alpha
Value, growth, long-term horizon, medium-term horizon
Profile| Send Message| ()  

Do you consider company sales trends when choosing among stocks? Most companies rely on sales as their primary source of profits, so an analysis of growth trends in revenue should be high on the list.

To illustrate, we ran a screen. We began by screening the tech sector for stocks with strong upward momentum, rallying above their 20-day, 50-day and 200-day moving averages.

We then screened these names for those with strong trends in revenue compared to inventory over the last year. We screened for companies seeing faster growth in revenue than inventory over the last year. Since inventory represents the portion of goods not yet sold, faster growth in revenue than inventory is considered a good sign.

To screen for healthy liquidity, we also only focused on those companies with inventory declining as a percent of current assets.

‪Interactive Chart: Press Play to compare changes in market cap over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.‬


We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.

Click to enlarge

Do you think these companies will continue to see strong growth in revenue? Use this list as a starting point for your own analysis.

List sorted by increase in revenue over the last year.

1. Seagate Technology PLC (STX): Designs, manufactures, markets and sells hard disk drives for the enterprise, client compute and client non-compute market applications in the United States and internationally. Market cap at $13.27B, most recent closing price at $30.01. The stock is rallying 9.36% above its 20-day moving average, 11.50% above its 50-day MA, and 67.98% above its 200-day MA. Revenue grew by 65.12% during the most recent quarter ($4,450M vs. $2,695M y/y). Inventory grew by 0.84% during the same time period ($841M vs. $834M y/y). Inventory, as a percentage of current assets, decreased from 15.15% to 13.21% during the most recent quarter (comparing 13 weeks ending 2012-03-30 to 13 weeks ending 2011-04-01).

2. RDA Microelectronics, Inc. (RDA): Designs, develops and markets radio-frequency and mixed-signal semiconductors for cellular, broadcast and connectivity applications. Market cap at $526.08M, most recent closing price at $12.64. The stock is rallying 8.80% above its 20-day moving average, 10.61% above its 50-day MA, and 24.20% above its 200-day MA. Revenue grew by 43.28% during the most recent quarter ($82.36M vs. $57.48M y/y). Inventory grew by 1.69% during the same time period ($36.09M vs. $35.49M y/y). Inventory, as a percentage of current assets, decreased from 21.4% to 15.77% during the most recent quarter (comparing three months ending 2011-12-31 to 3 months ending 2010-12-31).

3. Badger Meter Inc. (BMI): Engages in manufacturing and marketing liquid flow measurement and control technology products worldwide. Market cap at $574.2M, most recent closing price at $37.63. The stock is rallying 5.49% above its 20-day moving average, 9.71% above its 50-day MA, and 14.08% above its 200-day MA. Revenue grew by 32.9% during the most recent quarter ($76.23M vs. $57.36M y/y). Inventory grew by 10.32% during the same time period ($57.92M vs. $52.5M y/y). Inventory, as a percentage of current assets, decreased from 52.42% to 46.93% during the most recent quarter (comparing three months ending 2012-03-31 to 3 months ending 2011-03-31).

4. Himax Technologies, Inc. (HIMX): Designs, develops and markets semiconductors for flat panel displays. Market cap at $364.46M, most recent closing price at $2.06. The stock is rallying 0.17% above its 20-day moving average, 10.41% above its 50-day MA, and 46.34% above its 200-day MA. Revenue grew by 19.84% during the most recent quarter ($169.23M vs. $141.21M y/y). Inventory grew by -4.25% during the same time period ($112.98M vs. $117.99M y/y). Inventory, as a percentage of current assets, decreased from 24.28% to 21.91% during the most recent quarter (comparing three months ending 2011-12-31 to three months ending 2010-12-31).

5. NCR Corp. (NCR): Provides technologies and services that enable businesses to connect, interact and transact with their customers in the financial industry worldwide. Market cap at $3.73B, most recent closing price at $23.28. The stock is rallying 6.22% above its 20-day moving average, 8.43% above its 50-day MA, and 25.21% above its 200-day MA. Revenue grew by 17.58% during the most recent quarter ($1,244M vs. $1,058M y/y). Inventory grew by 1.13% during the same time period ($802M vs. $793M y/y). Inventory, as a percentage of current assets, decreased from 30.88% to 29.95% during the most recent quarter (comparing three months ending 2012-03-31 to 3 months ending 2011-03-31).

6. Netgear Inc. (NTGR): Designs, develops and markets networking products for home users and small businesses worldwide. Market cap at $1.49B, most recent closing price at $38.67. The stock is rallying 6.88% above its 20-day moving average, 2.91% above its 50-day MA, and 11.87% above its 200-day MA. Revenue grew by 16.79% during the most recent quarter ($325.62M vs. $278.82M y/y). Inventory grew by -4.14% during the same time period ($134.31M vs. $140.11M y/y). Inventory, as a percentage of current assets, decreased from 21.13% to 16.68% during the most recent quarter (comparing three months ending 2012-04-01 to three months ending 2011-04-03).

7. Zygo Corporation (ZIGO): Designs, develops and manufactures ultra-high precision measurement solutions to enhance its customers' manufacturing yields; and optical sub-systems and components for original equipment manufacturers and end-user applications in the United States and internationally. Market cap at $357.48M, most recent closing price at $19.71. The stock is rallying 4.18% above its 20-day moving average, 3.04% above its 50-day MA, and 25.49% above its 200-day MA. Revenue grew by 10.94% during the most recent quarter ($40.04M vs. $36.09M y/y). Inventory grew by -9.55% during the same time period ($24.62M vs. $27.22M y/y). Inventory, as a percentage of current assets, decreased from 26.18% to 17.98% during the most recent quarter (comparing three months ending 2011-12-31 to three months ending 2010-12-31).

8. National Instruments Corporation (NATI): Manufactures and supplies measurement and automation products. Market cap at $3.3B, most recent closing price at $27.36. The stock is rallying 1.28% above its 20-day moving average, 0.60% above its 50-day MA, and 5.34% above its 200-day MA. Revenue grew by 9.79% during the most recent quarter ($261.13M vs. $237.85M y/y). Inventory grew by 4.46% during the same time period ($140.41M vs. $134.41M y/y). Inventory, as a percentage of current assets, decreased from 19.29% to 19.13% during the most recent quarter (comparing three months ending 2012-03-31 to three months ending 2011-03-31).

*Accounting data sourced from Google Finance, all other data sourced from Finviz.

Source: 8 Rallying Tech Stocks With Strong Inventory Trends