For Immediate Release
Chicago, IL – May 08, 2017 - Stocks in this week’s article include SORL Auto Parts, Inc. (NASDAQ: SORL – Free Report ), KMG Chemicals, Inc. (NYSE: KMG – Free Report ), Momo Inc. (NASDAQ: MOMO – Free Report ) and Applied Optoelectronics, Inc. (NASDAQ: AAOI – Free Report ).
Screen of the Week of Zacks Investment Research:
4 Profitable Stocks to Buy for Stunning Returns
One of the best way to evaluate a company’s ability to meet all its operating and related costs and provide stupendous returns to its investors is through profitability analysis. Although a fundamentally weak companymay fail to perform successfully despite strong profitability, several studies have indicated that most of the times a profitable entity manages to offer huge returns.
Here we have used the concept of accounting ratios to evaluate a company’s profitability. There are a variety of profitability ratios, from which we have chosen the most common and successful profitability metric to determine the bottom-line performance of a company.
Net Income Ratio
Net income ratio gives us the exact profitability level of a company. It reflects the percentage of net income to total sales revenue. Using net income ratio, one can determine a company’s effectiveness to pay for its operating and non-operating expenses from its revenue. A higher net income ratio usually implies a company’s ability to generate ample revenue and successfully manage all its business functions.
Screening Parameters
Net income ratio is not the only indicator of future winners. So we have added a few more criteria to arrive at a winning strategy.
Zacks Rank Equal to #1: Only Zacks Rank #1 (Strong Buy) stocks are allowed. With the Zacks Rank proving itself to be one of the best rating systems out there, this is a great way to start things off. You can see the complete list of today’s Zacks #1 Rank stocks here .
12-Month Trailing Sales and Net Income Growth Higher than X Industry: Stocks that possess higher sales and net income growth in the last 12 months showcase better financial performance.
12-Month Trailing Net Income Ratio Higher than X Industry: High net income ratio indicates a company’s solid profitability.
% Rating Strong Buy greater than 70%: This indicates that 70% of the analysts covering these stocks are optimistic.
These few parameters narrowed down the universe of over 7,905 stocks to only 5.
Here are four of the five stocks that qualified the screen:
SORL Auto Parts, Inc. (NASDAQ:SORL – Free Report ) specializes in the development, production and distribution of air brake systems and other related products. It has an average four-quarter positive earnings surprise of 38.1%.
KMG Chemicals, Inc. (NYSE:KMG – Free Report ) manufactures and distributes specialty chemicals globally. It has an average four-quarter positive earnings surprise of 10.6%.
Momo Inc. (NASDAQ:MOMO – Free Report ) operates as a mobile-based social networking platform. It has an average four-quarter positive earnings surprise of 7%.
Applied Optoelectronics, Inc. (NASDAQ:AAOI – Free Report ) designs and develops advanced optical devices, packaged optical components, laser transmitters, etc. It has an average four-quarter positive earnings surprise of more than 100%.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
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Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
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Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
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SORL Auto Parts, Inc. (SORL): Free Stock Analysis Report
KMG Chemicals, Inc. (KMG): Free Stock Analysis Report
Momo Inc. (MOMO): Free Stock Analysis Report
Applied Optoelectronics, Inc. (AAOI): Free Stock Analysis Report
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