4 Best Efficient Stocks To Boost Your Portfolio

Operating Margin

Another popular efficiency ratio is operating margin. This metric, which shows the operating income over the past 12 months divided by sales over the same period, indicates how well a company is controlling its operating expenses. If a company has a high operating profit margin in relation to its competitors, it is doing a better job at controlling operating expenses.

All these ratios can be considered as effective measures if one compares different companies within a particular sector or industry. This is the reason why we have considered only those companies that have higher ratios than their respective industry averages.

Screening Parameters

In addition to the above-mentioned ratios, we have added a favorable Zacks Rank #1 (Strong Buy) or #2 (Buy) to the screen with an objective to make this strategy more profitable.

Inventory Turnover, Receivables Turnover, Asset Utilization, and Operating Margin greater than industry average

(Values of these ratios higher than industry averages may indicate that the efficiency level of the company is higher than its peers.)

The use of these few criteria has narrowed down the universe of over 7,906 stocks to only 18.

Here are four stocks from the 18 that made it through the screen:

Lululemon Athletica Inc. (LULU - Free Report), an athletic apparel company, together with its subsidiaries, designs, distributes and retails athletic apparel and accessories for women, men, and female youth. The company has an average four-quarter positive earnings surprise of 19.2%. The stock has a Zacks Rank #1 (Strong Buy).

Malibu Boats, Inc. (MBUU - Free Report) designs, manufactures, distributes, markets, and sells recreational powerboats. The company has an average four-quarter positive earnings surprise of 23.4%. The stock has a Zacks Rank #1.

The Buckle, Inc. (BKE - Free Report) operates as a retailer of casual apparel, footwear, and accessories for young men and women in the United States. The company has an average four-quarter positive earnings surprise of 8.2%. The stock has a Zacks Rank #1. 

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Disclosure: Zacks.com contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any ...

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