In business, there is one word that tends to resound louder than all others: profit. When a company is not profitable, its future appears tenuous. For many investors, sticking with profitable companies is a steadfast rule. Beyond that, growth projections are another important indicator of what is in store for a stock. With these ideas in mind, we searched for profitable stocks at the mid-cap level that have significant growth projections for the next year. In the mid-cap arena, there are plenty of companies that have surpassed the more risky small-cap stage, but room for growth remains evident. We think you will find our list worthy of more research.
Return on Assets [ROA] illustrates how much a company is generating in earnings from its assets alone. This metric gives investors a picture of how profitable the company is relative to the assets in current possession. As well, it lets investors see how efficient and effective management is at generating earnings from the company's assets. While most management teams can probably make money by throwing money at an issue very few can make very large profits with little investment.
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. 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.
We first looked for mid-cap stocks. Next, we screened for businesses that have strong profitability relative to their asset base (ROA [TTM]>10%)(Net Margin [TTM]>10%). We then looked for businesses that are considered high-growth, with 1-year projected EPS growth above 25%. We did not screen out any sectors.
Do you think these mid-cap stocks have strong operations? Use our list to help with your own analysis.
1) Sina Corp. (SINA)
| Sector | Technology |
| Industry | Internet Software & Services |
| Market Cap | $3.76B |
| Beta | 1.45 |
Financials
| Return on Assets | 15.09% |
| Net Margin | 47.39% |
| 1-Year Projected Earnings Per Share Growth Rate | 631.20% |
| Short Interest | 10.93% |
SINA Corporation provides online media and mobile value-added services (MVAS) in the People's Republic of China. It provides advertising, non-advertising, and free services through SINA.com, Weibo.com, and SINA Mobile.
2) Compass Minerals International Inc. (CMP)
| Sector | Basic Materials |
| Industry | Industrial Metals & Minerals |
| Market Cap | $2.41B |
| Beta | 0.42 |
Financials
| Return on Assets | 11.02% |
| Net Margin | 12.43% |
| 1-Year Projected Earnings Per Share Growth Rate | 48.03% |
| Short Interest | 6.97% |
Compass Minerals International, Inc., through its subsidiaries, produces and markets inorganic mineral products primarily in North America and the United Kingdom. The company operates in two segments, Salt and Specialty Fertilizer. The Salt segment produces salt and magnesium chloride for use in road deicing and dust control, food processing, water softeners, pool salt, and agricultural and industrial applications.
3) Qihoo 360 Technology Co. Ltd (QIHU)
| Sector | Technology |
| Industry | Internet Service Providers |
| Market Cap | $2.21B |
| Beta | - |
Financials
| Return on Assets | 18.33% |
| Net Margin | 23.88% |
| 1-Year Projected Earnings Per Share Growth Rate | 48.15% |
| Short Interest | 14.72% |
Qihoo 360 Technology Co. Ltd. provides Internet and mobile security products in the People's Republic of China. Its principal products include 360 Safe Guard, an Internet security product for Internet security and system optimization; 360 Anti-Virus, an anti-virus application to protect users' computers against trojan horses, viruses, worms, adware, and other forms of malware; and 360 Mobile Safe, a security program for the Google Android, Apple iOS, and Nokia Symbian smartphone operating systems.
4) Atwood Oceanics, Inc. (ATW)
| Sector | Basic Materials |
| Industry | Oil & Gas Drilling & Exploration |
| Market Cap | $3.02B |
| Beta | 1.48 |
Financials
| Return on Assets | 10.42% |
| Net Margin | 35.03% |
| 1-Year Projected Earnings Per Share Growth Rate | 28.79% |
| Short Interest | 4.47% |
Atwood Oceanics, Inc., an offshore drilling contractor, engages in the drilling and completion of exploratory and developmental oil and gas wells worldwide. The company owns 10 mobile offshore drilling units located in the U.S.
5) Companhia Siderurgica Nacional (SID)
| Sector | Basic Materials |
| Industry | Steel & Iron |
| Market Cap | $7.71B |
| Beta | 1.78 |
Financials
| Return on Assets | 11.23% |
| Net Margin | 26.99% |
| 1-Year Projected Earnings Per Share Growth Rate | 53.60% |
| Short Interest | 1.44% |
Companhia Siderurgica Nacional primarily operates as an integrated steel producer in Brazil and Latin America. The company principally produces carbon steel and various steel products. Its products include slabs, which are semi-finished products used for processing hot-rolled, cold-rolled, or coated coils and sheet products; hot-rolled products that comprise heavy-gauge hot-rolled coils and sheets, and light-gauge hot-rolled coils and sheets; cold-rolled products, including cold-rolled coils and sheets; and galvanized products consisting of flat-rolled steel coated with zinc or a zinc-based alloy.
6) Atmel Corporation (ATML)
| Sector | Technology |
| Industry | Semiconductor - Broad Line |
| Market Cap | $2.60B |
| Beta | 1.18 |
Financials
| Return on Assets | 11.07% |
| Net Margin | 10.74% |
| 1-Year Projected Earnings Per Share Growth Rate | 117.60% |
| Short Interest | 3.63% |
Atmel Corporation designs, develops, manufactures, and sells semiconductor integrated circuit (IC) products. The company's Microcontrollers segment provides various proprietary and standard microcontrollers, such as Atmel's capacitive touch products, including maXTouch and QTouch, AVR 8-bit and 32-bit products, ARM-based products, and Atmel's 8051 8-bit products. Its Nonvolatile Memories segment offers serial interface electrically erasable programmable read-only memory and serial interface flash memory products; and parallel interface flash memories, as well as parallel interface electrically erasable programmable read-only memory and erasable programmable read-only memory devices.
*Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz on 08/19/2012.
