5 Must-Buy Efficient Stocks Amid Volatile Market Conditions

Core Viewpoint - Companies with favorable efficiency levels are more likely to attract investors due to their expected impressive returns, which are believed to be positively correlated with price performance [1] Efficiency Ratios - The efficiency ratio is a key indicator of a company's financial health, analyzing how effectively a company utilizes its assets and liabilities [1] - Popular efficiency ratios to consider when selecting stocks include Receivables Turnover, Asset Utilization, Inventory Turnover, and Operating Margin [2][3][4][5] Receivables Turnover - This ratio measures a company's ability to extend credit and collect debts, with a high ratio indicating effective collection of accounts receivable [2] Asset Utilization - This ratio indicates how well a company converts its assets into sales, with higher values suggesting greater efficiency [3] Inventory Turnover - This ratio assesses a company's ability to manage inventory relative to its cost of goods sold, with high values indicating efficient inventory management [4] Operating Margin - This measure reflects a company's ability to control operating expenses, with higher values indicating better expense management compared to peers [5] Screening Criteria - A favorable Zacks Rank (Zacks Rank 1) is included in the screening process to enhance profitability [6] - The screening criteria narrowed down over 7,906 stocks to eight, focusing on companies with efficiency ratios above industry averages [7] Selected Stocks - The top five stocks identified through the screening process include: - Allot (ALLT): Provider of network intelligence and security solutions, with an average four-quarter positive earnings surprise of 106.7% [8] - Companhia de Saneamento Básico do Estado de São Paulo - SABESP (SBS): Provides public water and sewage services, with an average four-quarter positive earnings surprise of 30.8% [10] - Lindsay (LNN): Offers water management and road infrastructure products, with an average four-quarter positive earnings surprise of 17.9% [11] - Equity Bancshares (EQBK): A bank holding company providing financial services, with an average four-quarter positive earnings surprise of 17.3% [12] - Griffon (GFF): Engaged in manufacturing consumer and professional products, with an average four-quarter positive earnings surprise of 14.7% [13]