Bright future ahead? 2 eurozone stocks with encouraging sales trends

Mary-Lynn Cesar, Kapitall: The OECD expects growth in the eurozone to pick up later this year. Does that suggest possible upside potential for these eurozone stocks?

The 18-member eurozone will see an uptick in growth in the coming months, according to the latest readings from the Organization for Economic Cooperation and Development (OECD). The OECD’s May composite leading indicators (CLI) were published Tuesday and revealed that a rise in Italy’s leading indicators will push the currency union toward faster growth in the next six months.

[Read more from Kapitall: Why is the market ignoring these mining and energy stocks?]

Growth in France and Germany, the two largest economies in the eurozone, is expected to remain flat. Similarly, Canada, Japan, the UK, and the US will remain on pace. India’s growth is also classified as stable, making it the sole BRIC nation not projected to experience a slowdown in growth later this year. 

The OECD’s CLIs are used to determine shifts in economic activity six to nine months before they happen. To do this, the OECD compiles and analyzes indicators related to business confidence, changes in orders and inventory, financial market indicators, and key sector and trading partner data among smaller open economies. That’s why we decided to look at sales trends–inventory and accounts receivable–among eurozone stocks for our following screen.

We began with a universe of stocks headquartered in any of the 18 eurozone economies and subsequently screened for stocks with faster growth in revenue than accounts receivable year-over-year and a decrease in the portion of current assets attributable to accounts receivable during the same period.

Then we screened that group for stocks also experiencing faster growth in revenue than inventory year-over-year and a decrease in the portion of current assets attributable to inventory

We were left with two stocks on our list.

Do you think the OECD’s CLI report means these stocks can expect higher sales in the coming months? Use this list as a starting point for your own analysis.  

Click on the interactive chart to view data over time. 

1. Core Laboratories NV ( CLB): Provides reservoir description, production enhancement, and reservoir management products and services to the oil and gas industry worldwide. Market cap at $7.50B, most recent closing price at $162.78.

Revenue grew by 8.58% during the most recent quarter ($276.28M vs. $254.46M y/y).

Accounts receivable grew by 1.92% during the same time period ($206.62M vs. $202.72M y/y). Receivables, as a percentage of current assets, decreased from 68.28% to 68.% during the most recent quarter (comparing 3 months ending 2013-12-31 to 3 months ending 2012-12-31).

Inventory grew by -4.97% during the same time period ($46.82M vs. $49.27M y/y). Inventory, as a percentage of current assets, decreased from 16.59% to 15.41% during the most recent quarter (comparing 3 months ending 2013-12-31 to 3 months ending 2012-12-31).

The company is based in Amsterdam, Netherlands.

 

2. NXP Semiconductors NV ( NXPI): Provides mixed signal solutions and semiconductor components primarily in Japan, Europe, South Korea, Rest of Asia Pacific, and the Americas. Market cap at $15.76B, most recent closing price at $60.69.

Revenue grew by 15.86% during the most recent quarter ($1,293M vs. $1,116M y/y).

Accounts receivable grew by 6.27% during the same time period ($542M vs. $510M y/y). Receivables, as a percentage of current assets, decreased from 26.1% to 25.91% during the most recent quarter (comparing 13 weeks ending 2013-12-31 to 13 weeks ending 2012-12-31).

Inventory grew by 3.5% during the same time period ($740M vs. $715M y/y). Inventory, as a percentage of current assets, decreased from 36.59% to 35.37% during the most recent quarter (comparing 13 weeks ending 2013-12-31 to 13 weeks ending 2012-12-31).

The company is based in Eindhoven, Netherlands.

 

(List compiled by Mary-Lynn Cesar, a Kapitall Writer. Accounting data sourced from Google Finance. Quarterly sales data sourced from Zacks Investment Research. All other data sourced from Finviz.)

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