Are you a growth investor that digs deep into a company's financial statements? We are focusing on financial companies whose fundamentals indicate that not only are these companies growing fast, but they're doing so in theright way: by steadily raking in profits. If you prefer companies that can reliably grow over the long term, you'll like the list we came up with.
EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. The 1-Year Expected EPS Growth Rate is an annual growth estimate, where the growth projections are made by analysts, the company or other credible sources. 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.
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 financial stocks. We then looked for businesses that have expected earnings per share growth of more than 25 percent for next year(1-year projected EPS Growth Rate>25%). We then screened for businesses with strong profit margins (1-year operating margin>15%)(1-year fiscal EPS Growth Rate>10%). We did not screen out any market caps.
Do you think these stocks have strong enough fundamentals to move higher? Use this list as a starting-off point for your own analysis.
1) Ocwen Financial Corp. (NYSE:OCN)
|Industry:||Savings & Loans|
Ocwen Financial Corp. has a 1-Year Projected Earnings Per Share Growth Rate of 35.06%, a Operating Profit Margin of 48.22%, and a Earnings Per Share Growth Rate of 120.05%. The short interest was 4.68% as of 07/08/2012. Ocwen Financial Corporation, through its subsidiaries, provides residential and commercial mortgage loan servicing, special servicing, and asset management services in the United States and internationally. The company provides loan servicing, including asset management and resolution services primarily to owners of subprime residential mortgages. It also invests in subprime residential loans held for resale; and is involved in subprime residual mortgage backed trading securities related to subprime loan origination operation and whole loan purchase and securitization activities, as well as engages in the management of residential assets. Ocwen Financial Corporation was founded in 1988 and is headquartered in Atlanta, Georgia.
2) Heritage Commerce Corp. (NASDAQ:HTBK)
|Industry:||Regional - Pacific Banks|
Heritage Commerce Corp. has a 1-Year Projected Earnings Per Share Growth Rate of 34.62%, a Operating Profit Margin of 21.01%, and a Earnings Per Share Growth Rate of 107.80%. The short interest was 2.91% as of 07/08/2012. Heritage Commerce Corp. operates as the bank holding company for Heritage Bank of Commerce that provides a range of commercial and personal banking services to residents and the business/professional community in Santa Clara, Alameda, and Contra Costa counties in California. Its deposit products for retail and business banking markets include checking accounts, interest-bearing transaction accounts, savings accounts, time deposits, and retirement accounts. The company's loan portfolio comprises commercial loans, including operating secured and unsecured loans for working capital, equipment purchase, and other business purposes; small business administration loans; secured commercial real estate loans; commercial construction loans for rental properties, commercial buildings, and homes built by developers on speculative undeveloped properties; home equity lines of credit; and miscellaneous consumer loans comprising loans for financing automobiles, various consumer goods, and other personal purposes.
3) DuPont Fabros Technology, Inc. (NYSE:DFT)
DuPont Fabros Technology, Inc. has a 1-Year Projected Earnings Per Share Growth Rate of 126.67%, a Operating Profit Margin of 36.64%, and a Earnings Per Share Growth Rate of 39.76%. The short interest was 14.08% as of 07/08/2012. DuPont Fabros Technology, Inc., a real estate investment trust (REIT), engages in the ownership, acquisition, development, operation, management, and lease of large-scale data center facilities in the United States. The company leases its data centers to the American and international technology companies to house, power, and cool the computer servers that support their critical business processes. It also provides certain technical services to tenants, including layout design and installation of electrical power circuits, data cabling, server cabinets and racks, computer room airflow analyses, and monitoring.
4) PS Business Parks Inc. (NYSE:PSB)
|Industry:||REIT - Diversified|
PS Business Parks Inc. has a 1-Year Projected Earnings Per Share Growth Rate of 40.50%, a Operating Profit Margin of 34.31%, and a Earnings Per Share Growth Rate of 47.70%. The short interest was 4.66% as of 07/08/2012. PS Business Parks, Inc., a real estate investment trust (REIT), together with its subsidiaries, engages in the acquisition, development, ownership, and operation of commercial properties primarily multi-tenant flex, office, and industrial space. As of December 31, 2007, the company owned and operated approximately 19.6 million rentable square feet of commercial space located in Arizona, California, Florida, Maryland, Oregon, Texas, Virginia, and Washington, as well as managed approximately 1.
5) Oriental Financial Group Inc. (NYSE:OFG)
|Industry:||Money Center Banks|
Oriental Financial Group Inc. has a 1-Year Projected Earnings Per Share Growth Rate of 104.00%, a Operating Profit Margin of 21.48%, and a Earnings Per Share Growth Rate of 234.59%. The short interest was 7.06% as of 07/08/2012. Oriental Financial Group Inc., a financial holding company, provides various banking and financial services primarily in Puerto Rico. It operates in three segments: Banking, Wealth Management, and Treasury. The Banking segment offers commercial and consumer lending, saving and time deposit products, financial planning, and corporate and individual trust services.
6) NorthStar Realty Finance Corp. (NYSE:NRF)
|Industry:||REIT - Retail|
NorthStar Realty Finance Corp. has a 1-Year Projected Earnings Per Share Growth Rate of 175.00%, a Operating Profit Margin of 29.98%, and a Earnings Per Share Growth Rate of 39.81%. The short interest was 8.76% as of 07/08/2012. NorthStar Realty Finance Corp. operates as a real estate investment trust in the United States. It invests in real estate debt business, which acquires, originates, and structures debt investments secured primarily by income-producing real estate properties; real estate securities business that invests in commercial real estate debt securities, including commercial mortgage backed securities, REIT unsecured debt, and credit tenant loans; and net lease properties business, which acquires properties that are primarily net leased to corporate tenants. The company has elected to be taxed as a REIT and it would not be subject to federal income tax, provided it distributes at least 90% of its taxable income to its shareholders.
*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.