US Economy: Jobless Claims Hit Four-Year Lows

US Economy: Jobless Claims Hit Four-Year Lows

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Recent unemployment reports have shown that jobless claims have decreased to where they were four years ago. That, combined with an increase in consumer confidence signals an improving labor market that may boost household spending, according to Bloomberg. (STAY AHEAD OF THE CURVE: Follow Kapitall on Twitter)

Stephen Stanley, chief economist at Pierpont Securities LLC said, “There’s a steady, sustained improvement in the labor market. As more people have jobs, confidence is picking up. This is consistent with pretty solid gains in consumer spending.”

Companies have reduced firings and are investing in growing workforces, and Fed policy makers were forced to reassess the economy. Company sales have been rising, and the threat of a European banking crisis has reduced.

The increase in company sales has also given room to increase workers’ wages, which will likely motivate consumers to spend more. Store and mall purchases increased 1.1% in February, with clothing stores and auto dealers showing improving demand. Ronald Hodge, CEO of Delhaize Group SA’s U.S. business said, “There are some good forward-looking economic indicators here in the U.S. that would help give all of us some optimism.”

Business Section: Investing Ideas

Here is a list of highly profitable U.S. large cap companies with encouraging accounts receivable trends. Consumers seem to be spending more, so will these companies see growing sales with the improving economy?
 
 
Interactive Chart: Use the Compar-O-Matic to compare market caps for the stocks mentioned below:

List sorted by market cap.

 

 

“1. Caterpillar Inc. (CAT, Earnings, Analysts, Financials): Manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. Market cap at $73.46B. TTM gross margin at 32.24% vs. industry average at 31.99%. TTM operating margin at 15.85% vs. industry average at 12.99%. TTM pretax margin at 11.14% vs. industry average at 11.%. Revenue grew by 34.64% during the most recent quarter ($17,243M vs. $12,807M y/y). Accounts receivable grew by 6.91% during the same time period ($17,953M vs. $16,792M y/y). Receivables, as a percentage of current assets, decreased from 52.79% to 47.09% during the most recent quarter (comparing 3 months ending 2011-12-31 to 3 months ending 2010-12-31).

 

“2. Monsanto Co. (MON, Earnings, Analysts, Financials): Provides agricultural products for farmers in the United States and internationally. Market cap at $42.46B. TTM gross margin at 56.06% vs. industry average at 37.6%. TTM operating margin at 21.56% vs. industry average at 17.43%. TTM pretax margin at 20.56% vs. industry average at 16.47%. Revenue grew by 32.84% during the most recent quarter ($2,439M vs. $1,836M y/y). Accounts receivable grew by 8.% during the same time period ($2,632M vs. $2,437M y/y). Receivables, as a percentage of current assets, decreased from 30.55% to 27.04% during the most recent quarter (comparing 3 months ending 2011-11-30 to 3 months ending 2010-11-30).

 

“3. NextEra Energy, Inc. (NEE, Earnings, Analysts, Financials): Engages in the generation, transmission, distribution, and sale of electric energy in the United States and Canada. Market cap at $25.08B. TTM gross margin at 32.57% vs. industry average at 26.79%. TTM operating margin at 22.35% vs. industry average at 18.26%. TTM pretax margin at 15.98% vs. industry average at 13.52%. Revenue grew by 13.21% during the most recent quarter ($3,864M vs. $3,413M y/y). Accounts receivable grew by -30.21% during the same time period ($1,802M vs. $2,582M y/y). Receivables, as a percentage of current assets, decreased from 49.11% to 36.99% during the most recent quarter (comparing 3 months ending 2011-12-31 to 3 months ending 2010-12-31).

 

“4. Kellogg Company (K, Earnings, Analysts, Financials): And its subsidiaries manufacture and market ready-to-eat cereal and convenience food products primarily in North America, Europe, Latin America, and the Asia Pacific. Market cap at $18.89B. TTM gross margin at 44.19% vs. industry average at 32.2%. TTM operating margin at 15.28% vs. industry average at 11.7%. TTM pretax margin at 13.12% vs. industry average at 9.28%. Revenue grew by 5.42% during the most recent quarter ($3,015M vs. $2,860M y/y). Accounts receivable grew by -0.17% during the same time period ($1,188M vs. $1,190M y/y). Receivables, as a percentage of current assets, decreased from 40.82% to 39.25% during the most recent quarter (comparing 13 weeks ending 2011-12-31 to 13 weeks ending 2011-01-01).

 

“5. American Electric Power Co., Inc. (AEP, Earnings, Analysts, Financials): Engages in the generation, transmission, and distribution of electric power to retail customers. Market cap at $18.57B. TTM gross margin at 29.94% vs. industry average at 26.75%. TTM operating margin at 18.99% vs. industry average at 18.24%. TTM pretax margin at 15.84% vs. industry average at 13.5%. Revenue grew by 0.29% during the most recent quarter ($3,444M vs. $3,434M y/y). Accounts receivable grew by -18.47% during the same time period ($1,885M vs. $2,312M y/y). Receivables, as a percentage of current assets, decreased from 46.09% to 45.07% during the most recent quarter (comparing 3 months ending 2011-12-31 to 3 months ending 2010-12-31).

 

“6. Marsh & McLennan Companies, Inc. (MMC, Earnings, Analysts, Financials): Provides advice and solutions in the areas of risk, strategy, and human capital. Market cap at $18.10B. TTM gross margin at 17.53% vs. industry average at 14.32%. TTM operating margin at 14.65% vs. industry average at 11.41%. TTM pretax margin at 12.18% vs. industry average at 8.64%. Revenue grew by 4.42% during the most recent quarter ($2,908M vs. $2,785M y/y). Accounts receivable grew by -4.25% during the same time period ($2,906M vs. $3,035M y/y). Receivables, as a percentage of current assets, decreased from 57.52% to 51.45% during the most recent quarter (comparing 3 months ending 2011-12-31 to 3 months ending 2010-12-31).

 

 

(Written by Danny Guttridge)

 

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