Zacks.com Announces That Richard Moroney Highlights the Following Stocks: Cost Plus, Electronics Boutique, and Marine Products.

Business Editors

CHICAGO--(BUSINESS WIRE)--May 5, 2004

Richard Moroney says that investors should own companies with sustainable earnings growth. Let this expert tilt the odds in your favor with three tools that can help you locate such companies, along with profiles on a trio of well-managed industry leaders. Read about Cost Plus (NASDAQ:CPWM), Electronics Boutique (NASDAQ:ELBO), and Marine Products (AMEX:MPX). Click here for the full story exclusively on Zacks.com: http://at.zacks.com/?id=84

Here are the highlights from the Featured Expert column:

As an investor, you want to own companies with sustainable earnings growth. Efficient companies tend to generate more profits over time, so investing in well-managed businesses can help tilt the odds in your favor. Three tools especially useful for identifying such companies include: operating profit margin, return on investment (ROI), and operating cycle.

The companies reviewed below outperform industry peers for all three metrics. They had better-than-average operating margins, ROI, and operating cycles in their most recent quarter. In addition, they had four-quarter averages above the industry average for each metric.

Cost Plus (NASDAQ:CPWM), a specialty retailer of casual home furnishing and entreating products, operates 212 stores in 26 states. In the January quarter, operating margin hit 15.6%, up from 15.3% in the year-earlier quarter. Cost Plus consistently delivers returns investment near 12%. Steady store expansion and new business initiatives should drive near-term sales growth. The company expects to develop an Internet and catalog business in the next few years. Operating margins could trend higher over the next two to three years, fueling positive profit estimate revisions.

Electronics Boutique's (NASDAQ:ELBO) operating margins were 10.4% last quarter, compared to 7.8% for the average electronics retailer. The retailer of video games had an operating cycle of 71 days, versus 98 days for its peers. A steady stream of new game titles should drive sales. For fiscal 2005 ending January, Wall Street expects per-share earnings to climb 14% to $1.93. Management is targeting sales growth of 17% to 21%, with same-store sales growth of 2% to 4%. Consensus profit estimates could prove conservative if game-console prices drop further in the near term.

Marine Products (AMEX:MPX) designs, manufactures, and sells recreational power boats under the Chaparral and Robalo brands. Over the last four quarters, return on investment has averaged 26.6%, compared to 13.5% for the average leisure products company. At 60 days, the operating cycle is less than one-half the leisure group average. December-quarter operating margins were 15.6%, versus 11.7% for the industry. Continued efficiency gains, coupled with price increases, should spur further margin expansion. While the stock has rallied to all-time highs, strong sales and profit growth should drive further gains.

Get much more of Richard Moroney's information on the three tools, along with additional analysis on the above-mentioned stocks and two more well-managed industry leaders by clicking: http://at.zacks.com/?id=85

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