News

For Immediate Release

Chicago, IL – June 11, 2024 – Stocks in this week’s article are J.Jill JILL, Option Care Health OPCH and Amphenol APH.

3 Stocks Backed by High Efficiency to Boost Investor Returns

Efficiency level measures a company’s capability to transform available input into output and is often considered an important parameter for gauging its potential to make profits. A company with a favorable efficiency level is expected to provide stellar returns as it is believed to be positively correlated with price performance.

However, at times, it becomes difficult to measure the efficiency level of a company. This is why one must consider popular efficiency ratios while selecting stocks. These efficiency ratios are:

These efficiency ratios are:

Receivables Turnover: This is the ratio of 12-month sales to four-quarter average receivables. It shows a company’s potential to extend its credit and collect debt in terms of that credit. A high receivables turnover ratio or the “accounts receivable turnover ratio” or “debtor’s turnover ratio” is desirable as it shows that the company is capable of collecting its accounts receivables or that it has quality customers.

Asset Utilization: This ratio indicates a company’s capability to convert assets into output and is thus a widely known measure of efficiency level. It is calculated by dividing total sales over the past 12 months by the last four-quarter average of total assets. Like the above ratios, high asset utilization may indicate that a company is efficient.

Inventory Turnover: The ratio of the 12-month cost of goods sold (COGS) to a four-quarter average inventory is considered one of the most popular efficiency ratios. It indicates a company’s ability to maintain a suitable inventory position. While a high value indicates that the company has a relatively low level of inventory compared to COGS, a low value indicates that the company is facing declining sales, which has resulted in excess inventory.

Operating Margin: This efficiency measure is the ratio of operating income over the past 12 months to sales over the same period. It measures a company’s ability to control operating expenses. Hence, a high value of the ratio may indicate that the company manages its operating expenses more efficiently than its peers.

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

Here are the top three stocks that made it through the screen:

J.Jill operates as a specialty retailer of women’s apparel. JILL has an average four-quarter earnings surprise of 617.6%.

Option Care Health provides infusion and home care management solutions. OPCH has an average four-quarter earnings surprise of nearly 55.5%.

Amphenol designs, manufactures and markets electrical, electronic and fiber optic connectors, interconnect systems, antennas, sensors and sensor-based products and coaxial and high-speed specialty cable. APH has an average four-quarter earnings surprise of 6.9%.

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For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2285824/3-stocks-backed-by-high-efficiency-to-boost-portfolio-returns

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Contact: Jim Giaquinto

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Amphenol Corporation (APH) : Free Stock Analysis Report

J.Jill, Inc. (JILL) : Free Stock Analysis Report

Option Care Health, Inc. (OPCH) : Free Stock Analysis Report

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