Do you wish you could get a closer look at a company's sales trends? One idea is to compare changes in revenue to changes in inventory.
We ran a screen with this idea in mind. We began by screening for U.S.-traded stocks of Chinese companies for those seeing significant net insider purchases over the last six months, indicating these insiders expect their employers to outperform.
We then screened for positive sales trends, as indicated by higher growth in revenue year-over-year compared to change in inventory over the same time period, as well as inventory comprising a smaller portion of current assets over the same period.
To understand why these trends are positive, think of why the opposite trends would be negative. If inventory were growing faster than revenue, then it might indicate these companies are having trouble selling their inventory. Of course, management can decide to change the amount of inventory they hold, and changes may just reflect that decision.
Business section: Investing ideas
The results from this screen are listed below. These Chinese companies have the backing of company insiders, as well as promising sales trends compared to inventory.
Do you think they have strong sales prospects?
Use this list as a starting point for your own analysis. (Click here to access free, interactive tools to analyze these ideas.)
1. China TransInfo Technology
3. Yongye International
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.
Disclosure: Kapitall's Alexander Crawford does not own any of the shares mentioned above.