10 Years of Strong Returns: NetEase, Activision Blizzard

Companies show strong and steady returns, growing EPS and high profitability

Author's Avatar
Jun 30, 2016
Article's Main Image

GuruFocus’ All-In-One Screener helps us find profitable companies with 10-year positive returns, strong profitability and growing EPS.

NetEase Inc. (NTES)

The company during the last 10 years has had an average ROE of 27.47% and an average ROA of 23.29%; the average profitability has been 46.77% for its operating margin and 46.34% for its net margin. Even earnings per share had a strong performance, reporting a 10-year growth rate of 33%, supported by revenue that has grown by 41%.

The last reported ROE of 28.63% is outperforming 85% of its competitors while ROA of 16.88% is outperforming 85% of the companies in the Global Internet Content & Information industry. Financial strength is rated by GuruFocus as 8/10 with a cash to debt of 5.81 that is below the industry median of 13.38.

The company operates an interactive online community in China and is a provider of Chinese language content and services through its online games, Internet portal, email and wireless value-added services businesses.

The company's main investors among the gurus are Jim Simons (Trades, Portfolio) with 1.66% of outstanding shares, Sarah Ketterer (Trades, Portfolio) with 0.28%, Matthews China Fund (Trades, Portfolio) with 0.07%, Pioneer Investments (Trades, Portfolio) with 0.03%, Lee Ainslie (Trades, Portfolio) with 0.01%, RS Investment Management (Trades, Portfolio) with 0.01% and Columbia Wanger (Trades, Portfolio) with 0.01%.

Allegiant Travel Co. (ALGT)

The company during the last 10 years has had an average ROE of 21.59% and an average ROA of 9.66%; the average profitability has been 14.20% for its operating margin and 8.70% for its net margin. Even earnings per share had a strong performance, reporting a 10-year growth rate of 31%, supported by revenue that has grown by 21%.

The last reported ROE of 67.42% is outperforming 93% of its competitors while ROA of 17.04% is outperforming 94% of the companies in the Global Airlines industry. Financial strength is rated by GuruFocus as 6/10 with cash to debt of 0.53 that is below the industry median of 0.47.

The company, a leisure travel company engaged in transporting travelers in small cities to leisure destinations, provides air-related services and products along with air transportation.

Simons, who holds 7.81% of outstanding shares, is the main investor among the gurus followed by Ronald Muhlenkamp (Trades, Portfolio) with 0.32% and PRIMECAP Management (Trades, Portfolio) with 0.26%.

ClearOne Inc. (CLRO)

The company during the last 10 years has had an average ROE of 8.22% and an average ROA of 7.01%; the average profitability has been 11.55% for its operating margin and 11.08% for its net margin. Even earnings per share had a strong performance, reporting a 10-year growth rate of 30%, supported by revenue that has grown by 9%.

The last reported ROE of 8.54% is outperforming 65% of its competitors while ROA of 7.45% is outperforming 81% of the companies in the Global Communication Equipment industry. Financial strength is rated by GuruFocus as 10/10 with no debt.

The company designs, develops and sells conferencing, collaboration, streaming and digital signage solutions for audio/voice and visual communication.

Chuck Royce (Trades, Portfolio), who holds 3.63% of outstanding shares, is the company's main investor among the gurus followed by Simons with 1.75%.

Quaker Chemical Corp. (KWR)

The company during the last 10 years has had an average ROE of 15.10% and an average ROA of 7.56%; the average profitability has been 8.67% for its operating margin and 6.12% for its net margin. Even earnings per share had a strong performance, reporting a 10-year growth rate of 28%, supported by revenue that has grown by 2%.

The last reported ROE of 14.42% is outperforming 72% of its competitors while ROA of 7.97% is outperforming 76% of the companies in the Global Specialty Chemicals industry. Financial strength is rated by GuruFocus as 7/10 with cash to debt of 0.96 that is above the industry median of 0.80.

The company develops, produces and markets formulated chemical specialty products for heavy industrial and manufacturing applications.

The company's main investors among the gurus are Royce, who holds 7.67% of outstanding shares, Simons with 1.34%, Barrow, Hanley, Mewhinney & Strauss with 0.26%, RS Investment Management (Trades, Portfolio) with 0.04% and Mario Gabelli (Trades, Portfolio) with 0.04%.

Activision Blizzard Inc. (ATVI)

The company during the last 10 years has had an average ROE of 10.52% and an average ROA of 6.49%; the average profitability has been 14.84% for its operating margin and 10.87% for its net margin. Even earnings per share had a strong performance, reporting a 10-year growth rate of 28%, supported by revenue that has grown by 10%.

The last reported ROE of 10.50% is outperforming 65% of its competitors while ROA of 5.59% is outperforming 64% of the companies in the Global Electronic Gaming & Multimedia industry. Financial strength is rated by GuruFocus as 6/10 with cash to debt of 0.49 that is below the industry median of 10.51.

The company is an online, personal computer, video game console, tablet, handheld and mobile game publisher. It has three operating segments: Activision Publishing Inc., Blizzard Entertainment Inc. and Activision Blizzard Distribution.

The company's main investors among the gurus are PRIMECAP Management (Trades, Portfolio) with 1.4% of outstanding shares, John Paulson (Trades, Portfolio) with 0.43%, Louis Moore Bacon (Trades, Portfolio) with 0.1%, RS Investment Management (Trades, Portfolio) with 0.06%, Jeremy Grantham (Trades, Portfolio) with 0.05%, Steven Cohen (Trades, Portfolio) with 0.03%, Paul Tudor Jones (Trades, Portfolio) with 0.03% and Joel Greenblatt (Trades, Portfolio) with 0.03%.

LKQ Corp. (LKQ)

The company during the last 10 years has had an average ROE of 13.40% and an average ROA of 7.59%; the average profitability has been 10.55% for its operating margin and 6.02% for its net margin. Even earnings per share had a strong performance, reporting a 10-year growth rate of 25%, supported by revenue that has grown by 24%.

The last reported ROE of 14.02% is outperforming 70% of its competitors while ROA of 7.10% is outperforming 72% of the companies in the Global Auto Parts industry. Financial strength is rated by GuruFocus as 6/10 with cash to debt of 0.08 that is below the industry median of 0.72.

The company provides replacement parts, components and systems needed to repair cars and trucks. The company has three operating segments: Wholesale - North America; Wholesale - Europe and Self Service.

David Rolfe (Trades, Portfolio), who holds 2.81% of outstanding shares, is the main investor among the gurus followed by Alan Fournier (Trades, Portfolio) with 1.33%, Chuck Akre (Trades, Portfolio) with 1.11%, Columbia Wanger (Trades, Portfolio) with 1.01%, Meridian Funds (Trades, Portfolio) with 0.89%, Cohen with 0.3% and Pioneer Investments (Trades, Portfolio) with 0.11%.

Disclosure: I do not own any shares of any stocks mentioned in this article.

Start a free seven-day trial of Premium Membership to GuruFocus.