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  • The DuPont Equation, Find Stocks With Strong Profitability

    Kapitall often screens companies for strong profitability by performing a DuPont analysis on the names. Here's why:

    DuPont analysis, also known as "DuPont identity" was started by the DuPont Corporation in the 1920s. Here, assets are measured at their gross book value rather than at net book value in order to produce a higher return on equity (ROE). If the ROE is unsatisfactory, the DuPont analysis helps target the part of the business that is underperforming.

    DuPont analyzes return on equity (ROE, or net income/equity) profitability by breaking ROE up into three components:

    ROE

    = (Net Profit/Equity)

    = (Net Profit/Sales)*(Sales/Assets)*(Assets/Equity)

    = (Net Profit Margin)*(Asset Turnover)*(Leverage Ratio)

    It therefore focuses on companies with the following positive characteristics:

    • Increasing ROE along with,
    • Decreasing leverage, (i.e. decreasing Asset/Equity ratio)
    • Improving asset use efficiency (i.e. increasing Sales/Assets ratio) and improving net profit margin (i.e. increasing Net Income/Sales ratio.

    Those companies that pass DuPont are seeing positive trends in the sources of their increasing profitability, which adds further weight to the idea that the names are profitable.

    Tags: DuPont
    Feb 07 4:41 PM | Link | Comment!
  • Friday's High Volume Gainers With Bullish Options Sentiment
    The following is a list of high volume gainers with bullish option market sentiment, i.e. a large number of open call option positions relative to put option positions.
     
    For each stock, we'll list the Relative Volume indicator, which expresses Friday's trading volume as a multiple of the 3-month average volume.
     
    Relative Volume data sourced from Finviz, options data sourced from Schaeffer's.



    1. International Coal Group, Inc. (NYSE:ICO): Industrial Metals & Minerals Industry. Market cap of $1.42B. Today's relative volume at 6.34, with the stock gaining 3.72% during the session. Call open interest at 13,437 contracts vs. put open interest at 2,341 contracts (Put/Call ratio at 0.17). Short float at 7.71%, which implies a short ratio of 5.2 days. The stock has gained 74.94% over the last year.

    2. Medivation, Inc. (NASDAQ:MDVN): Biotechnology Industry. Market cap of $473.95M. Today's relative volume at 5.18, with the stock gaining 5.54% during the session. Call open interest at 32,777 contracts vs. put open interest at 6,347 contracts (Put/Call ratio at 0.19). Short float at 5.93%, which implies a short ratio of 5.6 days. The stock has lost -60.33% over the last year.

    3. LB Foster Co. (NASDAQ:FSTR): Basic Materials Wholesale Industry. Market cap of $420.25M. Today's relative volume at 3.25, with the stock gaining 0.10% during the session. Call open interest at 1,486 contracts vs. put open interest at 315 contracts (Put/Call ratio at 0.21). Short float at 2.45%, which implies a short ratio of 7.53 days. The stock has gained 38.65% over the last year.

    4. PAETEC Holding Corp. (NASDAQ:PAET): Diversified Communication Services Industry. Market cap of $572.93M. Today's relative volume at 3.06, with the stock gaining 0.25% during the session. Call open interest at 2,033 contracts vs. put open interest at 435 contracts (Put/Call ratio at 0.21). Short float at 2.81%, which implies a short ratio of 9.49 days. The stock has gained 0.51% over the last year.

    5. Cintas Corporation (NASDAQ:CTAS): Business Services Industry. Market cap of $4.28B. Today's relative volume at 3.13, with the stock gaining 0.59% during the session. Call open interest at 12,629 contracts vs. put open interest at 3,007 contracts (Put/Call ratio at 0.24). Short float at 5.15%, which implies a short ratio of 5.74 days. The stock has gained 3.81% over the last year.

    6. Synovus Financial Corp. (NYSE:SNV): Regional Banks Industry. Market cap of $1.95B. Today's relative volume at 2.93, with the stock gaining 3.61% during the session. Call open interest at 54,920 contracts vs. put open interest at 14,988 contracts (Put/Call ratio at 0.27). Short float at 12.95%, which implies a short ratio of 6.49 days. The stock has gained 25.76% over the last year.

    7. Quiksilver Inc. (NYSE:ZQK): Textile Industry. Market cap of $822.98M. Today's relative volume at 4.89, with the stock gaining 3.59% during the session. Call open interest at 6,410 contracts vs. put open interest at 2,064 contracts (Put/Call ratio at 0.32). Short float at 3.53%, which implies a short ratio of 4.41 days. The stock has gained 195.29% over the last year.

    8. CLARCOR Inc. (NYSE:CLC): Auto Parts Industry. Market cap of $2.2B. Today's relative volume at 3.01, with the stock gaining 0.50% during the session. Call open interest at 1,689 contracts vs. put open interest at 557 contracts (Put/Call ratio at 0.33). Short float at 3.19%, which implies a short ratio of 8.21 days. The stock has gained 35.36% over the last year.

    9. Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI): Drug Manufacturers Industry. Market cap of $315.06M. Today's relative volume at 4.21, with the stock gaining 1.76% during the session. Call open interest at 19,773 contracts vs. put open interest at 7,453 contracts (Put/Call ratio at 0.38). Short float at 7.68%, which implies a short ratio of 8.27 days. The stock has gained 33.91% over the last year.

    10. Sigma Designs, Inc. (NASDAQ:SIGM): Semiconductor Industry. Market cap of $432.7M. Today's relative volume at 4.23, with the stock gaining 2.10% during the session. Call open interest at 11,588 contracts vs. put open interest at 4,720 contracts (Put/Call ratio at 0.41). Short float at 14.79%, which implies a short ratio of 15.24 days. The stock has gained 26.91% over the last year.

    11. Take-Two Interactive Software Inc. (NASDAQ:TTWO): Multimedia & Graphics Software Industry. Market cap of $1.01B. Today's relative volume at 13.27, with the stock gaining 13.40% during the session. Call open interest at 31,028 contracts vs. put open interest at 12,676 contracts (Put/Call ratio at 0.41). Short float at 12.35%, which implies a short ratio of 6.83 days. The stock has gained 47.41% over the last year.

    12. Boston Scientific Corporation (NYSE:BSX): Medical Instruments & Supplies Industry. Market cap of $10.97B. Today's relative volume at 3.08, with the stock gaining 3.74% during the session. Call open interest at 244,457 contracts vs. put open interest at 104,516 contracts (Put/Call ratio at 0.43). Short float at 3.27%, which implies a short ratio of 3.01 days. The stock has lost -17.77% over the last year.

    13. Advanced Energy Industries, Inc. (NASDAQ:AEIS): Diversified Electronics Industry. Market cap of $554.93M. Today's relative volume at 2.82, with the stock gaining 8.90% during the session. Call open interest at 9,795 contracts vs. put open interest at 4,535 contracts (Put/Call ratio at 0.46). Short float at 6%, which implies a short ratio of 2.96 days. The stock has gained 6.13% over the last year.

    14. Safeguard Scientifics, Inc. (NYSE:SFE): Diversified Investments Industry. Market cap of $336.65M. Today's relative volume at 4.95, with the stock gaining 0.80% during the session. Call open interest at 1,559 contracts vs. put open interest at 738 contracts (Put/Call ratio at 0.47). Short float at 3.54%, which implies a short ratio of 8.32 days. The stock has gained 73.57% over the last year.

    15. Webster Financial Corp. (NYSE:WBS): Regional Banks Industry. Market cap of $1.42B. Today's relative volume at 3.3, with the stock gaining 0.94% during the session. Call open interest at 547 contracts vs. put open interest at 267 contracts (Put/Call ratio at 0.49). Short float at 6.21%, which implies a short ratio of 10.76 days. The stock has gained 48.24% over the last year.

    16. Coherent Inc. (NASDAQ:COHR): Scientific & Technical Instruments Industry. Market cap of $1.14B. Today's relative volume at 2.72, with the stock gaining 0.66% during the session. Call open interest at 487 contracts vs. put open interest at 239 contracts (Put/Call ratio at 0.49). Short float at 2.75%, which implies a short ratio of 5.36 days. The stock has gained 68.91% over the last year.

    17. Signature Bank (NASDAQ:SBNY): Regional Banks Industry. Market cap of $2.B. Today's relative volume at 2.57, with the stock gaining 0.74% during the session. Call open interest at 1,255 contracts vs. put open interest at 632 contracts (Put/Call ratio at 0.5). Short float at 7.31%, which implies a short ratio of 12.1 days. The stock has gained 56.07% over the last year.

    18. Cantel Medical Corp. (NYSE:CMN): Medical Instruments & Supplies Industry. Market cap of $392.4M. Today's relative volume at 3.91, with the stock gaining 0.90% during the session. Call open interest at 422 contracts vs. put open interest at 215 contracts (Put/Call ratio at 0.51). Short float at 3.66%, which implies a short ratio of 8.31 days. The stock has gained 11.29% over the last year.

    19. InterMune Inc. (NASDAQ:ITMN): Biotechnology Industry. Market cap of $799.55M. Today's relative volume at 55.76, with the stock gaining 116.89% during the session. Call open interest at 113,161 contracts vs. put open interest at 60,299 contracts (Put/Call ratio at 0.53). Short float at 9.32%, which implies a short ratio of 5.46 days. The stock has gained 14.07% over the last year.

    20. Koppers Holdings Inc. (NYSE:KOP): Lumber Industry. Market cap of $716.45M. Today's relative volume at 2.7, with the stock gaining 0.06% during the session. Call open interest at 1,421 contracts vs. put open interest at 792 contracts (Put/Call ratio at 0.56). Short float at 2.59%, which implies a short ratio of 4.78 days. The stock has gained 23.47% over the last year.


    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Dec 17 12:28 PM | Link | 1 Comment
  • 8 Stocks With Bearish Options Sentiment Seeing Unusual Trading Volume
    The following is a list of stocks seeing unusually high trading volume during Friday's session. In addition, all of these stocks have a large number of open put option positions relative to call option positions (i.e. bearish options sentiment).

    For each stock, we'll list today's Relative Volume indicator, which expresses today's trading volume as a multiple of the 3-month average.

    Does the spike in volume signal a reversal in the trend of these names? Are options traders too pessimistic about these names? Full details below.

    Options data sourced from Schaeffer's, relative volume indicators sourced from Finviz.

    Interactive Chart: Press Play to see how analyst ratings have changed for all the names mentioned below. (Analyst ratings sourced from Zacks Investment Research)

    (Access iframes here)

    The list has been sorted by the Put/Call ratio.

    1. Dollar General Corporation (NYSE:DG): Discount Stores Industry. Market cap of $10.89B. Relative volume at 2.69. Call open interest at 3,363 contracts vs. put open interest at 19,657 contracts (Put/Call ratio at 5.85). Short float at 4.51%, which implies a short ratio of 16.95 days. The stock has gained 35.3% over the last year.

    2. Lumber Liquidators Holdings, Inc. (NYSE:LL): Home Improvement Stores Industry. Market cap of $679.47M. Relative volume at 2.57. Call open interest at 1,247 contracts vs. put open interest at 5,259 contracts (Put/Call ratio at 4.22). Short float at 21.51%, which implies a short ratio of 13.05 days. The stock has lost -3.84% over the last year.

    3. Northwest Natural Gas Company (NYSE:NWN): Gas Utilities Industry. Market cap of $1.27B. Relative volume at 4.35. Call open interest at 170 contracts vs. put open interest at 439 contracts (Put/Call ratio at 2.58). Short float at 7.52%, which implies a short ratio of 17.26 days. The stock has gained 12.71% over the last year.

    4. Wimm-Bill-Dann Foods OJSC (NYSE:WBD):
    Dairy Products Industry. Market cap of $5.18B. Relative volume at 10.03. Call open interest at 628 contracts vs. put open interest at 1,613 contracts (Put/Call ratio at 2.57). Short float at 1.5%, which implies a short ratio of 2.71 days. The stock has gained 58.28% over the last year.

    5. Realty Income Corp. (NYSE:O): REIT Industry. Market cap of $3.77B. Relative volume at 11.87. Call open interest at 3,615 contracts vs. put open interest at 8,239 contracts (Put/Call ratio at 2.28). Short float at 10.97%, which implies a short ratio of 15.17 days. The stock has gained 40.79% over the last year.

    6. Finisar Corp. (NASDAQ:FNSR): Networking & Communication Devices Industry. Market cap of $1.76B. Relative volume at 2.49. Call open interest at 35,115 contracts vs. put open interest at 77,308 contracts (Put/Call ratio at 2.2). Short float at 14.84%, which implies a short ratio of 3.38 days. The stock has gained 136.27% over the last year.

    7. Snap-on Inc. (NYSE:SNA): Small Tools & Accessories Industry. Market cap of $3.23B. Relative volume at 2.15. Call open interest at 620 contracts vs. put open interest at 1,290 contracts (Put/Call ratio at 2.08). Short float at 2.27%, which implies a short ratio of 4.58 days. The stock has gained 50.75% over the last year.

    8. Gardner Denver Inc. (NYSE:GDI): Diversified Machinery Industry. Market cap of $3.57B. Relative volume at 3.68. Call open interest at 824 contracts vs. put open interest at 1,688 contracts (Put/Call ratio at 2.05). Short float at 1.04%, which implies a short ratio of 2 days. The stock has gained 76.78% over the last year.


    Disclosure: No positions
    Tags: DG, LL, NWN, WBD, O, FNSR, SNA, GDI
    Dec 03 1:53 PM | Link | Comment!
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