Are you looking for mid-sized companies that still have room to grow? Do you prefer stocks that analysts rate as 'Buy'? Do you prefer companies with strong profits? You might be interested in this list.
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 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 mid cap stocks. We then looked for businesses that analysts rate as "Buy" (2 < mean recommendation < 3). We then looked for companies with strong profitability (ROA > 10%)(1-year operating margin>15%). We did not screen out any sectors.
Do you think these mid-cap stocks should have higher valuations? Please use our list to assist with your own analysis.
1) Albemarle Corp. (NYSE:ALB)
Albemarle Corp. has a Analysts' Rating of 2.30 and Return on Assets of 13.02% and Operating Profit Margin of 20.58%. The short interest was 2.25% as of 05/24/2012. Albemarle Corporation develops, manufactures, and markets engineered specialty chemicals.
The company's Polymer Solutions segment provides brominated, mineral, and phosphorus based flame retardants used in plastic enclosures for consumer electronics, printed circuit boards, wire and cable, electrical connectors, textiles, foam insulation, and foam seating in furniture and automobiles; and plastic and other additives, such as curatives, antioxidants, and stabilizers.
The Catalysts segment offers refinery catalysts, including hydroprocessing catalysts, fluidized catalytic cracking catalysts, and additives; organometallic co-catalysts, and metallocene components and co-catalysts for the manufacture of commodity and specialty plastics used in packaging, non-packaging, films, and injection molding; electronic materials, such as high purity metal organic products used in the production of light emitting diodes, as well as other products used in the production of solar cells; and chemical catalysts used in the production of ethylene dichloride and methylamines.
The company's Fine Chemistry segment provides elemental bromine, alkyl bromides, inorganic bromides, brominated powdered activated carbon, and bromine fine chemicals used in chemical synthesis, oil and gas well drilling and completion fluids, mercury control, paper manufacturing, water purification, and beef and poultry processing.
2) F5 Networks, Inc. (NASDAQ:FFIV)
F5 Networks, Inc. has a Analysts' Rating of 2.30 and Return on Assets of 16.09% and Operating Profit Margin of 30.93%. The short interest was 1.64% as of 05/24/2012. F5 Networks, Inc. provides application delivery networking technology that optimizes the delivery of network-based applications, and the security, performance, and availability of servers, data storage devices, and other network resources in the Americas, EMEA, Japan, and the Asia Pacific.
The company offers BIG-IP, an application delivery controller; VIPRION, a chassis-based application delivery controller; and FirePass, an appliance that provides SSL VPN access for remote users of Internet protocol networks, and applications connected to the networks from Web browser on any device.
It also offers Application Security Manager, an application firewall; WebAccelerator that speeds Web transactions by optimizing individual network object requests, connections, and end-to-end transactions from browser to databases; WAN Optimization Manager, which integrates application delivery with WAN optimization technologies; Access Policy Manager that provides secure, granular, and context-aware control of access to applications; Edge Gateway, a remote access product, which offers context-aware, policy controlled, and remote access to applications at LAN speed; Enterprise Manager that allows customers to discover and view company's products in a single window; and ARX product family, a series of high performance and enterprise-class intelligent file virtualization devices.
3) Cliffs Natural Resources Inc. (NYSE:CLF)
|Industry:||Steel & Iron|
Cliffs Natural Resources Inc. has a Analysts' Rating of 2.10 and Return on Assets of 15.09% and Operating Profit Margin of 29.63%. The short interest was 6.64% as of 05/24/2012. Cliffs Natural Resources Inc., a mining and natural resources company, engages in the production of iron ore pellets, fines and lump ore, and metallurgical coal.
The company operates five iron ore mines located in Michigan and Minnesota; five metallurgical coal mines located in West Virginia and Alabama; and one thermal coal mine located in West Virginia. It also operates two iron ore mines in eastern Canada that primarily provide iron ore to steel producers in Asia; and two iron ore mining complexes in Western Australia.
4) American Capital, Ltd. (NASDAQ:ACAS)
American Capital, Ltd. has a Analysts' Rating of 2.30 and Return on Assets of 18.03% and Operating Profit Margin of 51.81%. The short interest was 1.12% as of 05/24/2012. American Capital, Ltd. is a private equity and venture capital firm specializing in management and employee buyouts, mezzanine, acquisition, recapitalization, middle market, and growth capital investments.
American Capital seeks to invest in senior debt mezzanine and equity financing for buyouts of private equity firms and direct in private and public companies. It also invests in special situations and in government.
5) Apollo Group Inc. (NASDAQ:APOL)
|Industry:||Education & Training Services|
Apollo Group Inc. has a Analysts' Rating of 2.20 and Return on Assets of 20.85% and Operating Profit Margin of 21.04%. The short interest was 11.31% as of 05/24/2012. Apollo Group, Inc., through its subsidiaries, provides online and on-campus educational programs and services at the undergraduate, master's, and doctoral levels.
The company offers various degree programs in arts and sciences, business and management, criminal justice and security, education, health care, human services, nursing, psychology, and technology through its campus locations and learning centers in 40 states and the District of Columbia, and Puerto Rico, as well as through its online education delivery system.
Apollo Group also provides various degree programs in Chile and Mexico, and through online financial services education programs, including Master of Science in three majors, as well as certification programs in retirement, asset management, and other financial planning areas; and training and education to professionals in the legal and finance industries through its schools in the United Kingdom and a network of offices in Europe.
6) Atwood Oceanics, Inc. (NYSE:ATW)
|Industry:||Oil & Gas Drilling & Exploration|
Atwood Oceanics, Inc. has a Analysts' Rating of 2.20 and Return on Assets of 11.76% and Operating Profit Margin of 45.35%. The short interest was 6.86% as of 05/24/2012. 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.
7) Alliance Resource Partners LP (NASDAQ:ARLP)
|Industry:||Industrial Metals & Minerals|
Alliance Resource Partners LP has a Analysts' Rating of 2.10 and Return on Assets of 22.74% and Operating Profit Margin of 21.52%. The short interest was 0.92% as of 05/24/2012. Alliance Resource Partners, L.P. engages in the production and marketing of coal primarily to utilities and industrial users in the United States.
8) Dolby Laboratories, Inc. (NYSE:DLB)
Dolby Laboratories, Inc. has a Analysts' Rating of 2.20 and Return on Assets of 15.90% and Operating Profit Margin of 44.17%. The short interest was 4.65% as of 05/24/2012. Dolby Laboratories, Inc. provides products, services, and technologies for the entertainment industry worldwide. It designs and manufactures video and audio products for film production, cinema, and television broadcast industries; and provides services to support film production, television broadcast, and music production.
The company is involved in licensing technologies in signal processing systems that enhance sound quality or enable surround sound in movie soundtracks, DVDs, Blu-ray Discs, personal computers, digital televisions, mobile devices, video games, satellite and cable broadcasts, and online streaming; and developing technologies for mobile devices for 3D, digital cinema, post-production, and LED backlit LCD televisions.
9) Alliance Holdings GP, L.P. (NASDAQ:AHGP)
|Industry:||Nonmetallic Mineral Mining|
Alliance Holdings GP, L.P. has a Analysts' Rating of 2.00 and Return on Assets of 22.54% and Operating Profit Margin of 21.39%. The short interest was 0.37% as of 05/24/2012. Alliance Holdings GP, L.P., through its subsidiaries, produces and markets coal primarily to utilities and industrial users in the United States. It produces a range of steam coal with varying sulfur and heat contents. The company operates nine underground mining complexes in Illinois, Indiana, Kentucky, Maryland, and West Virginia.
*Company profiles were sourced from Finviz. Financial data was sourced from Finviz and Google Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.