If you're an investor searching for profitable companies with the bullish sentiment to back it up, you may be interested in the following.
We screened a universe of stocks with market caps over $300 million that appear more profitable than their industry peers based on the following profit margins:
TTM gross margin: This metric tells us the percentage of a company's revenue left after paying all production expenses. Costs include overhead, payroll, and taxation. ((revenues – cost of goods sold) / Revenue ) *100 = Gross Margin %
TTM operating margin: This tells us the percentage remaining after all operating expenses are paid. Operating expenses include supplies, repairs, research and development, and depreciation. (Operating Income / Net Operating Revenue) *100 = Operating Margin %
TTM pre-tax margin: A company's earnings before taxes. This incorporates all of the expenses associated with business excluding taxes. It can help to determine the overall operating efficiency of the firm. (Net profit before taxes / net sales) *100 = Pre-tax Margin
Companies with higher margins are taking a greater percentage of sales as profits, and they have tighter control over their cost structure.
To refine the quality of the list, we searched among the profitable companies for significant levels of net insider buying in the past six months.
Insiders know more about their company than anyone else, and if they are using their own money to buy up company stocks it is probably a good idea for investors to pay close attention.
Insiders think these profitable companies have more upside than downside -- do you? (Click here to access free, interactive tools to analyze these ideas.)
1. Center Bancorp
2. Saul Centers
3. ITT Educational Services
4. Republic Services
5. Peoples Federal Bancshares
7. Solar Capital Ltd.
8. Access National Corp.
9. White River Capital Inc.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research. List compiled by Eben Esterhuizen, CFA.
Kapitall's Eben Esterhuizen and Rebecca Lipman do not own any of the shares mentioned above. Insider data sourced from Yahoo! Finance, profitability data sourced from Fidelity.