Do you prefer the largest-cap stocks? Interested in basic materials stocks? Looking for ways to dig deeper into a company's profitability? Do you prefer investing in stocks that analysts have weighed in on? Here are some interesting ideas to get you started.
The Net Margin is a profitability metric that illustrates, by percentage, how much of every dollar earned gets turned into a bottom line profit. This is just one of many profitability metrics used by investors and analysts to better understand what the company is being left with at the end of the day. Generally, a firm that can expand its net profit margins over a period of time will see its stock price rise as well due to the trend of increasing profitability. Net Margin = Net Income/Total Revenue
EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. EPS growth rates help investors identify stocks that are increasing or decreasing in profitability. This profitability metric is generally a key driver in the price of the stock as it directly correlates to the profitability of the company as a whole.
We first looked for large cap basic materials stocks. We then looked for businesses with strong profitability (Net Margin [TTM] >10%)(1-year fiscal EPS growth rate>10%). We next screened for businesses that analysts rate as "Buy" (2 < mean recommendation < 3).
Do you think these large-cap stocks failed to price their value accurately? Use our list along with your own analysis.
EOG Resources, Inc. (EOG)
| Sector: | Basic Materials |
| Industry: | Independent Oil & Gas |
| Market Cap: | $28.31B |
| Beta: | 1.09 |
EOG Resources, Inc. has a Net Margin of 10.78%, an Earnings Per Share Growth Rate of 549.16%; and an Analysts' Rating of 2.20. The short interest was 1.46% as of 05/10/2012. EOG Resources, Inc., together with its subsidiaries, engages in the exploration, development, production, and marketing of crude oil and natural gas primarily in the United States, Canada, the Republic of Trinidad and Tobago, the United Kingdom, the People's Republic of China, and the Argentine Republic. As of December 31, 2011, it had a total estimated net proved reserves of 2,054 million barrels of oil equivalent (MMBoe), of which 517 million barrels (MMBbl) were crude oil and condensate reserves, and 228 MMBbl were natural gas liquids reserves; and 7,851 billion cubic feet were natural gas reserves. The company held approximately 572,000 net acreage position in the oil window of the Eagle Ford Shale Play near San Antonio, Texas.
Air Products & Chemicals Inc. (APD)
| Sector: | Basic Materials |
| Industry: | Chemicals - Major Diversified |
| Market Cap: | $17.65B |
| Beta: | 1.14 |
Air Products & Chemicals Inc. has a Net Margin of 12.02%; Earnings Per Share Growth Rate of 17.82%. and Analysts' Rating of 2.20. The short interest was 1.16% as of 05/10/2012. Air Products and Chemicals, Inc. provides atmospheric gases, process and specialty gases, performance materials, equipment, and services worldwide. The company's Merchant Gases segment sells atmospheric gases, such as oxygen, nitrogen, and argon; process gases, including hydrogen and helium; and medical and specialty gases for the metal, glass, chemical processing, food processing, healthcare, steel, general manufacturing, and petroleum and natural gas industries. This segment also offers respiratory therapies, home medical equipment, and infusion services primarily in Europe.
Continental Resources Inc. (CLR)
| Sector: | Basic Materials |
| Industry: | Independent Oil & Gas |
| Market Cap: | $13.82B |
| Beta: | 1.78 |
Continental Resources Inc. has a Net Margin of 30.53%; Earnings Per Share Growth Rate of 142.92%; and Analysts' Rating of 2.50. The short interest was 11.26% as of 05/10/2012. Continental Resources, Inc. engages in the exploration, development, and production of crude oil and natural gas primarily in the north, south, and east regions of the United States. The company primarily sells its oil and natural gas production to end users, as well as to midstream marketing companies or oil refining companies at the lease. As of December 31, 2011, its estimated proved reserves were 508.
Halliburton Company (HAL)
| Sector: | Basic Materials |
| Industry: | Oil & Gas Equipment & Services |
| Market Cap: | $29.92B |
| Beta: | 1.56 |
Halliburton Company has a Net Margin of 11.87%; Earnings Per Share Growth Rate of 65.41%; and Analysts' Rating of 1.80. The short interest was 1.88% as of 05/10/2012. Halliburton Company provides various products and services to the energy industry for exploring, developing, and producing oil and natural gas worldwide. It operates in two segments, Completion and Production, and Drilling and Evaluation. The Completion and Production segment offers production enhancement services, including stimulation services and sand control services; and cementing services comprising bonding the well and well casing, while isolating fluid zones and maximizing wellbore stability, and casing equipment.
Apache Corp. (APA)
| Sector: | Basic Materials |
| Industry: | Independent Oil & Gas |
| Market Cap: | $33.51B |
| Beta: | 1.32 |
Apache Corp. has a Net Margin of 24.27%; Earnings Per Share Growth Rate of 35.69%; and Analysts' Rating of 1.80. The short interest was 1.69% as of 05/10/2012. Apache Corporation, an independent energy company, explores for, develops, and produces natural gas, crude oil, and natural gas liquids. It has exploration and production interests in the Permian, Central, Gulf of Mexico Shelf, Gulf of Mexico Deepwater, and Gulf Coast Onshore in the United States; British Columbia, Alberta, and Saskatchewan provinces in Canada; Egypt; offshore Western Australia in the Carnarvon basin; offshore the United Kingdom in the North Sea; and in the Neuqun, Rio Negro, Tierra del Fuego, and Mendoza provinces of Argentina. The company sells its natural gas to local distribution companies, utilities, end-users, integrated oil companies, and supply aggregators and marketers. As of December 31, 2011, it had total estimated proved reserves of 1,370 million barrels of oil of crude oil, condensate, and NGLs; and 9.
CF Industries Holdings, Inc. (CF)
| Sector: | Basic Materials |
| Industry: | Agricultural Chemicals |
| Market Cap: | $11.49B |
| Beta: | 1.12 |
CF Industries Holdings, Inc. has a Net Margin of 28.35%; Earnings Per Share Growth Rate of 311.81%; and Analysts' Rating of 2.20. The short interest was 2.82% as of 05/10/2012. CF Industries Holdings, Inc., through its subsidiary, CF Industries, Inc., manufactures and distributes nitrogen and phosphate fertilizer products, serving agricultural and industrial customers worldwide. It operates in two segments, Nitrogen and Phosphate.
*Company profiles were sourced from Finviz. Financial data was sourced from Google Finance and Yahoo Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
