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

Do you consider a stock's sales trends when evaluating its prospects? Most companies earn the majority of their profits from sales, so a sales analysis should be high on your list. With this idea in mind, we ran a screen.

We began by screening the small-cap sector, stocks with market caps below $1 billion, for those that are rallying above their 20-day, 50-day, and 200-day moving averages, indicating that these stocks have strong upward momentum.

We then screened for strong sales trends by comparing growth in revenue to growth in inventory over the last year. We screened for stocks with positive sales trends, with 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 an encouraging sign.

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

For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.

Tool provided by Kapitall.

Do you think these stocks are poised to continue rallying? Use this list as a starting point for your own analysis.

List sorted by increase in revenue over the last year.

1. Star Scientific, Inc. (CIGX): Engages in the development, implementation, and licensing of tobacco curing technology that prevents the formation of carcinogenic toxins present in tobacco and tobacco smoke, primarily the tobacco-specific nitrosamines. Market cap at $549.33M, most recent closing price at $3.77. The stock is currently trading 10.27% above its 20-day moving average, 16.77% above its 50-day MA, and 29.82% above its 200-day MA. Revenue grew by 631.25% during the most recent quarter ($1.17M vs. $0.16M y/y). Inventory grew by -18.28% during the same time period ($2.95M vs. $3.61M y/y). Inventory, as a percentage of current assets, decreased from 15.95% to 14.22% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

2. LeapFrog Enterprises Inc. (LF): Provides technology-based learning platforms worldwide. Market cap at $667.4M, most recent closing price at $10.0. The stock is currently trading 1.23% above its 20-day moving average, 10.67% above its 50-day MA, and 66.29% above its 200-day MA. Revenue grew by 81.48% during the most recent quarter ($72.01M vs. $39.68M y/y). Inventory grew by -28.9% during the same time period ($38.87M vs. $54.67M y/y). Inventory, as a percentage of current assets, decreased from 29.95% to 15.94% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

3. American Vanguard Corp. (AVD): Engages in the manufacture, development, and marketing of specialty chemical products for agricultural and commercial uses in the United States and internationally. Market cap at $689.04M, most recent closing price at $24.75. The stock is currently trading 0.10% above its 20-day moving average, 3.90% above its 50-day MA, and 54.93% above its 200-day MA. Revenue grew by 32.14% during the most recent quarter ($87.25M vs. $66.03M y/y). Inventory grew by -3.4% during the same time period ($74.67M vs. $77.3M y/y). Inventory, as a percentage of current assets, decreased from 52.97% to 38.71% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

4. NuVasive, Inc. (NUVA): Engages in the design, development, and marketing of minimally disruptive surgical products and procedures for the spine. Market cap at $831.65M, most recent closing price at $19.26. The stock is currently trading 5.65% above its 20-day moving average, 13.97% above its 50-day MA, and 24.30% above its 200-day MA. Revenue grew by 21.87% during the most recent quarter ($151.69M vs. $124.47M y/y). Inventory grew by 6.68% during the same time period ($122.03M vs. $114.39M y/y). Inventory, as a percentage of current assets, decreased from 29.14% to 19.37% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

5. Spreadtrum Communications Inc. (SPRD): Operates as a fabless semiconductor company that designs, develops, and markets baseband processor and RF transceiver solutions for wireless communications and mobile television markets. Market cap at $843.18M, most recent closing price at $18.37. The stock is currently trading 10.24% above its 20-day moving average, 17.40% above its 50-day MA, and 0.71% above its 200-day MA. Revenue grew by 17.54% during the most recent quarter ($161.11M vs. $137.07M y/y). Inventory grew by -44.98% during the same time period ($62.91M vs. $114.33M y/y). Inventory, as a percentage of current assets, decreased from 24.69% to 13.94% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

6. Cato Corp. (CATO): Operates as a specialty retailer of fashion apparel and accessories in the southeastern United States. Market cap at $819.98M, most recent closing price at $28.12. The stock is currently trading 0.14% above its 20-day moving average, 1.15% above its 50-day MA, and 9.64% above its 200-day MA. Revenue grew by 0.61% during the most recent quarter ($275.34M vs. $273.66M y/y). Inventory grew by -3.54% during the same time period ($120.75M vs. $125.18M y/y). Inventory, as a percentage of current assets, decreased from 28.48% to 26.09% during the most recent quarter (comparing 3 months ending 2012-04-28 to 3 months ending 2011-04-30).

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

Source: 6 Rallying Small-Caps With Strong Inventory Trends