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Zacks.com featured highlights include Encore Wire, ICF International, Lantheus Holdings and Tecnoglass

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For Immediate Release

Chicago, IL – March 13, 2023 – Stocks in this week’s article are Encore Wire Corp. (WIRE - Free Report) , ICF International, Inc. (ICFI - Free Report) , Lantheus Holdings, Inc. (LNTH - Free Report) and Tecnoglass Inc. (TGLS - Free Report) .

4 Stocks with Solid Net Profit Margins to Boost Portfolio Returns

Investors prefer to put their money in businesses that reap profits on a regular basis. In order to gauge the extent of profits, there is no better metric than net profit margin.

A higher net margin reflects a company's efficiency in converting sales into actual profits. Encore Wire Corp., ICF International, Inc., Lantheus Holdings, Inc. and Tecnoglass Inc. boast solid net profit margins.

Net Profit Margin = Net profit/Sales * 100.

In simple terms, net profit is the amount a company retains after deducting all costs, interest, depreciation, taxes and other expenses. In fact, the net profit margin can turn out to be a potent point of reference to gauge the strength of a company's operations and its cost-control measures.

Also, higher net profit is essential for rewarding stakeholders. Further, strength in the metric not only attracts investors but also draws well-skilled employees who eventually enhance a business's value.

Moreover, a higher net profit margin compared with its peers provides the company with a competitive edge.

Pros and Cons

Net profit margin helps investors gain clarity on a company's business model in terms of pricing policy, cost structure and manufacturing efficiency. Hence, a strong net profit margin is preferred by all classes of investors.

However, net profit margin as an investment criterion has its share of pitfalls. The metric varies widely from industry to industry. While net income is a key metric for investment measurement in traditional industries, it is not that important for technology companies.

In addition, the difference in accounting treatment of various items — especially non-cash expenses like depreciation and stock-based compensation — makes comparison a daunting task.

Furthermore, for companies preferring to grow with debt instead of equity funding, higher interest expenses usually weigh on net profit. In such cases, the measure is rendered ineffective, while analyzing a company's performance.

The Winning Strategy

A healthy net profit margin and solid EPS growth are the two most sought-after elements in a business model.

Apart from these, we have added a few criteria to ensure maximum returns from this strategy.

Here we discuss our four picks from the 36 stocks that qualified the screen:

Encore Wire is a low-cost manufacturer of copper electrical building wire and cable. The company is a significant supplier of both residential wires for interior electrical wiring in homes, apartments and manufactured housing, as well as building wires for electrical distribution in commercial and industrial buildings. The stock sports a Zacks Rank #1 and has a VGM Score of A.

The Zacks Consensus Estimate of $19.76 per share for Encore Wire's current-year earnings has moved 28.1% north in the past 60 days. WIRE surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 146.9%.

ICF International is a provider of professional services and technology-based solutions to government and commercial clients. The company's primary services include advisory, analytics, digital, engagement and program implementation services. At present, the stock sports a Zacks Rank #1 and has a VGM Score of A.

The Zacks Consensus Estimate for ICF International's current-year earnings has moved up by 16 cents to $6.14 per share in the past seven days. ICFI surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 9.2%.

Lantheus Holdings is involved in developing, manufacturing, selling and distributing diagnostic medical imaging agents and products for the diagnosis of cardiovascular and other diseases. It serves hospitals, clinics, group practices, integrated delivery networks, group purchasing organizations, radiopharmacies and wholesalers. The stock flaunts a Zacks Rank #1 and has a VGM Score of B.

The Zacks Consensus Estimate for Lantheus Holdings' 2023 earnings has been revised upward to $4.79 per share from $4.25 in the past 30 days. LNTH surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 50%.

Tecnoglass is engaged in manufacturing and selling architectural glass and windows and aluminum products for the residential and commercial construction industries. At present, the stock sports a Zacks Rank #1 and has a VGM Score of B.

The Zacks Consensus Estimate of 23 cents for Tecnoglass' current-year earnings has moved 35 cents north to $3.83 per share in the past seven days. TGLS surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 21.5%.

Get the rest of the stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and back testing software.

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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For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2063972/4-stocks-with-solid-net-profit-margin-to-boost-portfolio-return

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.

About Screen of the Week

Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine.  But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.

Strong Stocks that Should Be in the News

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.

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