The 5 Most Predictable Companies with Highest Return on Assets

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Mar 20, 2012
You can use the new GuruFocus All-in-One screener to find stocks with almost any characteristics. It has different adjustments under five categories: description, fundamental, historical growth, valuation, gurus and insiders. For instance, if criteria are entered for stocks with a predictability rank of 5 stars and a minimum ROA of 20%, five stocks appear: Apollo Group (APOL, Financial), Medifast Inc. (MED, Financial), Boston Beer Inc. (SAM, Financial), Alliances Res (ARLP, Financial) and Factset Resh (FDS, Financial).


Return on assets indicates how much profit a company makes on its total assets. Technically, it tells what earnings were generated from invested capital (assets). The formula is: Net Income/Total Assets. The higher the better.


Apollo Group (APOL)


Apollo Group operates for profit education subsidiaries University of Phoenix, Apollo Global, College for Financial Planning and Institute for Professional Development. Its return on assets was the fifth-highest of companies the screener found, at 16.66%, increased slightly from 16.11% the prior year. The five-year average ROA for the industry is 5.2%.





The company had to make changes in how it recruits students in 2010, which resulted in a 4% decline in revenue to $4.7 billion in 2011. Net income increased from $553 billion in 2010 to $572 billion in 2011. Total assets also declined from $3.6 billion in 2010 to $3.3 billion in 2011.


Medifast Inc. (MED)


Medifast produces, distributes and sells weight and health management products with the brand names Medifast, Take Shape for Life, Hi-Energy Weight Control Centers and Woman’s Wellbeing.


Its return on assets in the third quarter of 2011 was 19.6%, which has been increasing in the past several years. The average return on assets for the specialty retail industry is 10.48% for the trailing 12 months.





The company’s total assets amounted to $94 million in 2010, which increased from $62.8 million in 2009. Net income also increased to $19.6 million in 2010 from $12 million in 2009.


Boston Beer Inc. (SAM)


Boston Beer Inc. is the largest brewer of handcrafted beers in America. Boston Beer is a growing company that recently saw a large increase in its return on assets. It increased from 19.3% in 2010 to 29.7% in 2011, and was negative as recently as 2008. The average return on assets for the beverages industry in the trailing 12 months is 9.47%.





In 2011, the company’s total assets increased to $272.5 million from $258.5 million in 2010. Net income increased to $66 million from $50 million.


Alliances Resources Partners (ARLP)


Alliance Resources Partners is a coal producer and marketer primarily in the eastern U.S. Its ROA has been increasing since 2008 and increased to 22.5% in 2011 from 21.4% in 2010. The average return on assets for the oil, gas & consumable fuels industry in the trailing 12 months is 24.47%.





In 2011, its total assets increased to $1.7 billion from $1.1 billion in 2010. Its net income increased to $389 million from $321 million.


Factset Research Systems Inc. (FDS)


Factset researches global market trends and develops analytical tools for investors. Of all of GuruFocus’ 5-star predictable companies, it has the highest return on assets at 27%. ROA has been increasing over the past several years. The average return on assets for the software industry for the trailing 12 months is 13.07%.





In 2011, the company’s total assets increased to $657 million from $645 the prior year. Its net income increased to $171 million from $150.


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