3 Highly Liquid Stocks Reporting Earnings Next Week With Strong Inventory Trends

|
 |  Includes: AEO, BEBE, SAFM
by: Kapitall

Do you follow earnings season? We ran a screen on next week's reporting companies that you might find interesting.

We began by screening for stocks reporting their second quarter earnings next week for those with strong liquidity, with current ratios above 3.

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 (www.kapitall.com). More investing ideas on Kapitall Wire (wire.kapitall.com).

Do you think these stocks will report positive earnings surprises? Use this list as a starting point for your own analysis.

List sorted by increase in revenue over the last year.

1. Sanderson Farms, Inc. (NASDAQ:SAFM): Engages in the production, processing, marketing, and distribution of fresh, frozen, processed, and prepared chicken products. Market cap at $911.45M, most recent closing price at $39.68. Earnings to be released on 08/20. Current ratio at 3.25. Revenue grew by 24.14% during the most recent quarter ($595.05M vs. $479.34M y/y). Inventory grew by -0.33% during the same time period ($213.14M vs. $213.84M y/y). Inventory, as a percentage of current assets, decreased from 59.96% to 59.91% during the most recent quarter (comparing 3 months ending 2012-04-30 to 3 months ending 2011-04-30).

2. American Eagle Outfitters, Inc. (NYSE:AEO): Operates as an apparel and accessories retailer in the United States and Canada. Market cap at $4.1B, most recent closing price at $20.93. Earnings to be released on 08/22. Current ratio at 3.96. Revenue grew by 17.97% during the most recent quarter ($719.09M vs. $609.56M y/y). Inventory grew by 13.6% during the same time period ($376.69M vs. $331.59M y/y). Inventory, as a percentage of current assets, decreased from 30.09% to 29.9% during the most recent quarter (comparing 13 weeks ending 2012-04-28 to 13 weeks ending 2011-04-30).

3. Bebe Stores, Inc. (NASDAQ:BEBE): Engages in the design, development, and production of women's apparel and accessories. Market cap at $527.13M, most recent closing price at $6.25. Earnings to be released on 08/23. Current ratio at 5.29. Revenue grew by 10.54% during the most recent quarter ($121.03M vs. $109.49M y/y). Inventory grew by 0.53% during the same time period ($34.23M vs. $34.05M y/y). Inventory, as a percentage of current assets, decreased from 14.22% to 13.62% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-04-02).

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

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.