Top Efficiency Stocks to Watch in Any Market

In any economic climate, companies demonstrating strong efficiency tend to attract investors. These companies are anticipated to provide solid returns, with their operational efficiency often linked to better price performance.

The efficiency ratio is crucial as it measures a firm’s financial health by assessing how well it uses its assets and manages liabilities within its operations.

Nonetheless, gauging a company’s efficiency can be challenging. Thus, it helps to look at key efficiency ratios when choosing stocks.

Recently, Tilray Brands (TLRY), Consol Energy (CEIX), and Apogee Enterprises (APOG) were highlighted as strong candidates based on their efficiency metrics:

Key Efficiency Ratios to Consider

Receivables Turnover: This ratio compares a company’s annual sales to its average receivables over four quarters. A high ratio indicates that the company efficiently collects payments and likely has reliable customers.

Asset Utilization: This measure assesses how effectively a company converts its assets into sales. It is determined by dividing total sales over the past year by the average total assets for the same period. Higher values suggest better efficiency.

Inventory Turnover: This ratio compares the cost of goods sold over 12 months to the average inventory over four quarters. A high turnover indicates effective inventory management, while a low turnover might suggest unsold goods, possibly due to declining sales.

Operating Margin: This metric shows the percentage of revenue left after covering operating expenses. A higher ratio signals that a company is better at managing its expenses compared to its competitors.

Screening Methodology via Research Wizard

To refine this analysis, we added a favorable Zacks Rank—specifically, Zacks Rank #1 (Strong Buy)—to enhance selection efficiency. The following criteria helped narrow down the options:

Inventory Turnover, Receivables Turnover, Asset Utilization, and Operating Margin should be higher than industry averages.

Applying these strategic criteria reduced the initial pool of over 7,906 stocks to just 13 strong candidates.

Below are the three top stocks identified:

Tilray Brands

Tilray Brands is a leader in the cannabis and consumer goods sector, mainly operating in Canada, the U.S., Europe, Australia, and Latin America. TLRY boasts an average positive earnings surprise of 30% over the last four quarters.

Consol Energy

As a producer and exporter of high-Btu bituminous coal, Consol Energy, represented by CEIX, has reported an average positive earnings surprise of 23.7% over the same timeframe.

Apogee Enterprises

Apogee Enterprises leads in architectural services and products, offering glass and aluminum systems for buildings. Its average positive earnings surprise stands at 19.7% over the last four quarters.

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Disclosure: Employees of Zacks Investment Research may hold long or short positions in the mentioned securities or their options.

Performance information for Zacks’ portfolios and strategies is available at: Zacks Performance

7 Best Stocks to Buy in the Next Month

Experts have identified seven top stocks among the current Zacks Rank #1 Strong Buys. These are predicted to outperform the market significantly.

Since 1988, this list has beaten the market by more than two times, averaging a gain of +23.7% annually. Be sure to focus on these carefully selected stocks.

For the latest recommendations from Zacks Investment Research, consider downloading 5 Stocks Set to Double. This report is available for free now.

Apogee Enterprises, Inc. (APOG): Free Stock Analysis Report

Consol Energy Inc. (CEIX): Free Stock Analysis Report

Tilray Brands, Inc. (TLRY): Free Stock Analysis Report

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Zacks Investment Research

The views expressed in this article are those of the author and do not necessarily reflect the opinions of Nasdaq, Inc.