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Zacks.com featured highlights include Lululemon Athletica, Sanderson Farms, IDEXX Laboratories and NVR

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For Immediate Release

Chicago, IL – September 12, 2017 - Stocks in this week’s article include Lululemon Athletica inc. (Nasdaq: (LULU - Free Report)  – Free Report), Sanderson Farms, Inc. (Nasdaq: (SAFM - Free Report)  – Free Report), IDEXX Laboratories, Inc. (Nasdaq: (IDXX - Free Report)  – Free Report) and NVR, Inc. (NYSE: (NVR - Free Report)  – Free Report).

Screen of the Week of Zacks Investment Research:

Buy These 4 Efficient Stocks for Healthy Returns

Companies with favorable efficiency levels are poised to be on investors’ radar irrespective of market conditions. This is because a company with a favorable efficiency level is expected to provide impressive returns as it is believed to be positively correlated with the company’s price performance. Efficiency or the company's ability to transform its inputs into outputs is an important measure to determine its financial condition.

Key Ratios to Identify Efficiency

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

Inventory Turnover: The ratio of 12-month cost of goods sold (COGS) to a 4-quarter average inventory is considered to be 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 weak sales, which resulted in excess inventory.

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 signals 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 its 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 4-quarter average of total assets. Like the above two ratios, high asset utilization may also indicate that a company is efficient.

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 its operating expenses. Hence, a high value of the ratio may indicate that the company manages its operating expenses more efficiently than its peers.

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 narrowed down the universe of over 7,906 stocks to only 16.

Here are four stocks from the 16 that made it through the screen:

Lululemon Athletica inc.(Nasdaq: (LULU - Free Report) – Free Report) is a designer, distributor and retailer of athletic apparel. The company operates through two segments: Company-operated stores and Direct to consumer. This Zacks Rank #2 company has an average four-quarter positive earnings surprise of 8.51%.

Sanderson Farms, Inc.(Nasdaq: (SAFM - Free Report) – Free Report) is an integrated poultry processing company, produces, processes, markets, and distributes fresh, frozen, and prepared chicken products in the United States. This Zacks Rank #1 company has an average four-quarter positive earnings surprise of 14.02%.

IDEXX Laboratories, Inc.(Nasdaq: (IDXX - Free Report) – Free Report) develops, manufactures and distributes products and provides services for the companion animal veterinary, livestock and poultry, dairy and water testing markets. This Zacks Rank #2 company has an average four-quarter positive earnings surprise of 9.28%. You can see the complete list of today’s Zacks #1 Rank stocks here.

NVR, Inc. (NYSE: (NVR - Free Report) – Free Report) is engaged in the construction and sale of single-family detached homes, townhomes and condominium buildings. This Zacks Rank #1 company has an average four-quarter positive earnings surprise of 14.19%.

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.

Click here to sign up for a free trial to the Research Wizard today.

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.

Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.

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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.

About Screen of the Week

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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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