Are you looking for midsized companies that still have room to grow? Looking for ways to dig deeper into a company's profitability? Do you prefer stocks that analysts rate as "strong buy"? If so, here are some ideas to get you started on your search.
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.
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.
We first looked for mid-cap stocks. We then screened for businesses that have achieved strong bottom-line profitability (net margin [TTM] > 10%)(one-year operating margin > 15%). We then looked for companies that analysts rate as "strong buy" (mean recommendation < 2). We did not screen out any sectors.
Do you think these mid-cap stocks have a strong outlook? Use our list to help with your own analysis.
1. Linn Energy (LINE)
|Industry:||Independent Oil & Gas|
Linn Energy has a Net Margin of 41.79%, an Operating Profit Margin of 55.74%, and an Analysts' Rating of 1.50. The short interest was 0.98% as of May 15, 2012. Linn Energy, an independent oil and natural gas company, engages in the acquisition and development of oil and gas properties. The company's properties are primarily located in the Mid-Continent, the Permian Basin, Michigan, California, and the Williston Basin in the United States. As of Dec. 31, 2011, it had proved reserves of 3,370 billion cubic feet equivalent of oil and gas, and natural gas liquids, as well as operated 7,759 gross productive wells.
2. Credit Acceptance (CACC)
Credit Acceptance has a Net Margin of 35.88%, an Operating Profit Margin of 56.61%, and an Analysts' Rating of 1.00. The short interest was 0.98% as of May 15, 2012. Credit Acceptance, together with its subsidiaries, provides auto loans, and related products and services to consumers in the United States. Its loan programs include portfolio program, which advances money to dealer-partners in exchange for the right to service the underlying consumer loans; and purchase program that buys the consumer loans from the dealer-partners and keeps amounts collected from the consumers. The company markets its products through a network of approximately 55,000 independent and franchised automobile dealers. Credit Acceptance was founded in 1972 and is headquartered in Southfield, Mich.
3. Questcor Pharmaceuticals (QCOR)
Questcor Pharmaceuticals has a Net Margin of 38.55%, an Operating Profit Margin of 55.57%, and an Analysts' Rating of 1.20. The short interest was 24.94% as of May 15, 2012. Questcor Pharmaceuticals, a biopharmaceutical company, provides prescription drugs for the treatment of multiple sclerosis, nephrotic syndrome, and infantile spasms indications. It primarily offers H.P. Acthar Gel, an injectable drug for the treatment of acute exacerbations of multiple sclerosis in adults; to induce a diuresis or a remission of proteinuria in the nephrotic syndrome without uremia of the idiopathic type or that due to lupus erythematosus; and as monotherapy for the treatment of infantile spasms in infants and children under two years of age. The companys H.P. Acthar Gel also focuses on rheumatology-related conditions, including collagen diseases and rheumatic disorders. In addition, it offers Doral for the treatment of insomnia. The company sells its Acthar primarily to specialty pharmacies; and Doral to pharmaceutical wholesalers. Questcor Pharmaceuticals was founded in 1990 and is headquartered in Anaheim, Calif.
Company profiles were sourced from Finviz. Financial data was sourced from Finviz and Yahoo Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.