Zacks.com featured highlights J.Jill, Gibraltar Industries, LSI Industries and Limbach
For Immediate Release
Chicago, IL – October 18, 2023 – Stocks in this week’s article are J.Jill Inc. JILL, Gibraltar Industries, Inc. ROCK, LSI Industries Inc. LYTS and Limbach Holdings Inc. LMB.
4 Solid Net Profit Margin Stocks to Power Your Portfolio
The primary purpose of a business is to generate profits that can be reinvested in expansion or utilized for rewarding shareholders. Net profit margin is an effective tool to measure the profits reaped by a business.
A higher net margin underlines a company’s efficiency in translating sales into actual profits. Moreover, this metric gives insight into how well a company is run and the headwinds weighing on it. J.Jill Inc., Gibraltar Industries, Inc., LSI Industries Inc. and Limbach Holdings Inc. 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 with 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 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.
The Winning Strategy
A healthy net profit margin and solid EPS growth are the two most sought-after elements in a business model.
Apart from these, we have added a few criteria to ensure maximum returns from this strategy.
Here we have picked four stocks — J.Jill, Gibraltar Industries, LSI Industries and Limbach — from the 33 stocks that qualified the screen:
J.Jill operates as a specialty retailer of womens apparel. The Company offers sweaters, tops, pants, dresses, shorts, skirts, sleepwear and accessories. It markets through retail stores, website and catalog. The stock sports a Zacks Rank #1 and has a VGM Score of A.
The Zacks Consensus Estimate of $2.83 per share for J.Jill’s fiscal 2024 earnings has moved 5.2% north in the past 60 days. JILL surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 78.3%.
Gibraltar Industries manufactures and distributes products to the industrial and buildings market. The products range from ventilation and expanded metal to mail storage solutions and rain dispersion products and solutions. At present, the stock flaunts a Zacks Rank #1 and has a VGM Score of A.
The Zacks Consensus Estimate for Gibraltar Industries’ current-year earnings has moved up by 21 cents to $3.97 per share in the past 60 days. ROCK surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 11.2%.
LSI Industries is an Image Solutions company that combines integrated design, manufacturing, & technology to supply its own high-quality lighting fixtures and graphics elements for applications in the retail, specialty niche, & commercial markets. At present, the stock sports a Zacks Rank #1 and has a VGM Score of A.
The Zacks Consensus Estimate for LSI Industries’ fiscal 2024 earnings has moved up by 19.1% to $1.12 per share in the past 60 days. LYTS surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 61.2%.
Limbach provides building systems. The Company engineers, constructs and services the mechanical, plumbing, air conditioning, heating, building automation, electrical and control systems. At present, the stock sports a Zacks Rank #1 and has a VGM Score of A.
The Zacks Consensus Estimate for Limbach’s current-year earnings has moved up to $1.36 per share from $1.12 60 days ago. LMB surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 81.4%.
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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/2166977/4-solid-net-profit-margin-stocks-to-power-your-portfolio
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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Gibraltar Industries, Inc. (ROCK) : Free Stock Analysis Report
LSI Industries Inc. (LYTS) : Free Stock Analysis Report
J.Jill, Inc. (JILL) : Free Stock Analysis Report
Limbach Holdings, Inc. (LMB) : Free Stock Analysis Report
