Zacks.com featured highlights include: TimkenSteel, Genco Shipping & Trading, PDC Energy, Capital Product Partners and ModivCare

For Immediate Release

Chicago, IL – December 7, 2021 – Stocks in this week’s article are TimkenSteel Corporation TMST, Genco Shipping (NYSE:GNK) & Trading Limited GNK, PDC Energy (NASDAQ:PDCE), Inc. PDCE, Capital Product (NASDAQ:CPLP) Partners L.P. CPLP and ModivCare Inc. MODV.

5 Top-Ranked Stocks with Impressive Net Profit Margins

The primary purpose of a business is to generate profits that can be reinvested in expansion or utilized for rewarding a company’s shareholders. Net profit margin is an effective tool for measuring the profits reaped by a business.

A higher net margin underlines a company’s efficiency in translating sales into actual profits. Moreover, this metric lends an insight into how well a company is run and what are the headwinds weighing on it. TimkenSteel, Genco Shipping & Trading, PDC Energy, Capital Product Partners and ModivCare 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, 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’ value.

Moreover, a higher net profit margin compared with its peers provides a company 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 own 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.

For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1835786/5-top-ranked-stocks-with-impressive-net-profit-margins

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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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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5 Stocks Set to Double

Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.