Zacks.com featured highlights Post Holdings, ReWalk Robotics, Deckers Outdoor and Ralph Lauren

Zacks.com featured highlights Post Holdings, ReWalk Robotics, Deckers Outdoor and Ralph Lauren

Zacks Equity Research
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For Immediate Release

Chicago, IL – March 20, 2024 – Stocks in this week’s article are Post Holdings POST, ReWalk Robotics Ltd. LFWD, Deckers Outdoor DECK and Ralph Lauren RL.

4 Must-Buy Efficient Stocks to Increase Your Portfolio Returns

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

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:

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.

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

Post Holdings is a consumer-packaged goods holding company that is involved in the production of center-of-the-store, refrigerated, food service, food ingredient and convenient nutrition product categories. POST has a trailing four-quarter average earnings surprise of nearly 52.2%.

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