4 stocks with a high net income ratio to recover
Profitability analysis is one of the best ways to assess the prospects of a business. It is used to detect a profitable business versus a loss making business. A business with a high level of excess sales can not only cover all of its operating and non-operating costs, but also make more profit.
In this context, it may be wise to invest in shares of a company with a high level of profitability as it normally ensures high returns. Therefore, the easiest and most transparent way to check the profitability of a business is to use accounting ratios. There are a variety of profitability ratios out of which we have selected the net income ratio here as it is the most useful and straightforward measure of profitability.
To this end, Atlas Air Worldwide Holdings, Inc. AAWW, Textainer Group Holdings Limited TGH, Churchill Downs Incorporated (CHDN) and Louisiana-Pacific Society LPX was selected as the first choice with a high net income ratio.
Net income ratio
There are a variety of profit ratios such as gross income ratio, operating profit ratio, pre-tax profit margin, and net profit ratio, which can be used to determine the profit-generating capabilities of the company. a company. But the net income ratio is widely accepted as the more conservative of the ratios mentioned above.
Net income, in simple terms, is the total income of a business after deducting all expenses from its sales. The net income ratio or net profit margin is a ratio of the net income to the turnover of a business. A high net income ratio shows that the company can effectively manage all business activities including production, administration, sales, etc.
The net income ratio is not the only indicator of future winners. We have therefore added some additional criteria to arrive at a winning strategy.
Zack rank equal to # 1: Whether the market is good or bad, stocks with a Zacks # 1 (strong buy) ranking have a proven history of outperforming. You can see The full list of today’s Zacks # 1 Rank stocks here.
Last 12 months sales and higher net income growth than industry X: Stocks that have outperformed the sector in sales and net income growth over the past 12 months are well positioned to perform well.
Net income ratio for the last 12 months greater than X Industry: A high net income ratio indicates a solid profitability of a business.
High Purchase percentage score above 70: This indicates that 70% of current broker recommendations for action are strong buys.
These few parameters reduced the universe from over 7,685 stocks to just 15.
Here are four of the 15 actions that qualified the screening:
Atlas Air in the world is the parent company of Atlas Air and Polar Air Cargo, which together operate a fleet of cargo aircraft. Atlas Air Worldwide is mainly involved in the air transport from airport to airport of heavy cargo.
Through its main subsidiaries, Atlas Air Worldwide offers scheduled air freight service, freight charters, military charters and rental of ACMI aircraft in which customers receive an aircraft, crew, maintenance and service. dedicated insurance on a long term rental basis. AAWW’s 12-month net profit margin is 13.2%.
Textainer Group Holdings is an intermodal container leaser with a total fleet of over 1.3 million containers, representing over 2,000,000 TEUs. TGH leases containers from more than 400 shipping lines and other tenants, including each of the world’s top 20 container companies.
Textainer Group is also the main supplier of containers leased to the US military. Its 12-month net profit margin is 35.1%.
Churchill Downs is a United States online racing, betting and gaming entertainment company that operates through three segments: Churchill Downs, Online Wagering and Gaming.
Churchill Downs ran thoroughbred races and featured America’s biggest race, the Kentucky Derby. CHDN’s 12-month net profit margin is 14.8%.
Louisiana-Pacific company is a manufacturer of building materials and engineered wood products in the United States, Canada, Chile and Brazil.
Louisiana-Pacific products are used by home builders as well as light commercial builders. Its 12-month net profit margin is 32.6%.
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Disclosure: Officers, directors and / or employees of Zacks Investment Research may own or have sold securities short and / or hold long and / or short positions in options mentioned in this document. An affiliated investment advisory firm may own or have sold securities short and / or hold long and / or short positions in options mentioned in this document.
Disclosure: Information on the performance of Zacks’ portfolios and strategies can be found at: https://www.zacks.com/performance.
5 actions in the process of doubling
Each was selected by a Zacks expert as the # 1 favorite stock to earn + 100% or more in 2021. Previous recommendations climbed + 143.0%, + 175.9%, + 498.3% and + 673.0%.
Most of the stock in this report is flying under Wall Street’s radar, which provides a great opportunity to get into the ground floor.
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LouisianaPacific Corporation (LPX): Free Stock Analysis Report
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Atlas Air Worldwide Holdings (AAWW): Free Stock Analysis Report
Textainer Group Holdings Limited (TGH): Free Stock Analysis Report
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