Chicago, IL – February 28, 2025 – Stocks in this week’s article are Deckers Outdoor DECK, Flexsteel Industries FLXS, Commerce Bancshares CBSH and BancFirst BANF.
Irrespective of market conditions, companies with favorable efficiency levels are more likely to be investors' choices.The reason is that a company with a favorable efficiency level is expected to offer impressive returns as it is believed to be positively correlated to its price performance.
The efficiency ratio is an indication of a company's financial health. It analyzes how efficiently a company uses its assets and liabilities internally.
However, at times it becomes difficult to measure the efficiency level of a company. This is why one must consider the popular efficiency ratios listed below while selecting stocks.
To that end, Deckers Outdoor, Flexsteel Industries, Commerce Bancshares and BancFirst have made it through the screen process:
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:
Deckers Outdoor
Deckers Outdoor is a leading designer, producer and brand manager of innovative, niche footwear and accessories developed for outdoor sports and other lifestyle-related activities. DECK has an average four-quarter positive earnings surprise of 36.8%.
Flexsteel Industries
Flexsteel Industries is engaged in the design, manufacture and sale of a broad line of quality upholstered furniture for residential, commercial and recreational vehicle seating uses. FLXS has an average four-quarter positive earnings surprise of 19.8%.
Commerce Bancshares
Commerce Bancshares is a bank holding company engaged in the general banking business, providing a wide range of retail, corporate, investment, trust and asset management products as well as services to individuals and businesses. CBSH has an average four-quarter positive earnings surprise of 10.2%.
BancFirst
BancFirst is a bank holding company that focuses on providing a full range of commercial banking services to retail customers and small to medium-sized businesses both in non-metropolitan trade centers and metropolitan markets. BANF has an average four-quarter positive earnings surprise of 7.9%.
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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/2422570/4-must-buy-efficient-stocks-to-buy-for-solid-gains-amid-volatility
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Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report
Commerce Bancshares, Inc. (CBSH) : Free Stock Analysis Report
BancFirst Corporation (BANF) : Free Stock Analysis Report
Flexsteel Industries, Inc. (FLXS) : Free Stock Analysis Report
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