6 Growing Companies Trading Near Their 12-Month Lows

by: Lenny Grover

By combining price-related and fundamental criteria using the stock screener, it is possible to look for companies trading near their 12-month lows that have reported positive revenue growth recently. To improve the signal to noise ratio, we will look only at U.S. markets and exclude Chinese companies along with those that are unlisted. We can use the following criteria:




Country Located In



Price-closing or last bid


1.05 * Price-12 month low

Revenue Change-TTM over TTM



Revenue Change-year over year



Exchange Traded On


"Over The Counter"

The screener tool is fully customizable and these criteria can be adjusted to suit your preferences. For the purposes of this screen, we are requiring that companies' closing price be within 5% of their 12-month low and are satisfied with any positive TTM/TTM and YoY revenue growth rates. While the screen produces 46 results as of 4/4/2011, many of these companies have their headquarters in the U.S. but the bulk of their operations in China or reported negative earnings over the trailing twelve month period. There are a few profitable companies that stand out because they are household names in the retail, food, and technology sectors:


Company Name


Campbell Soup Company


Best Buy Co., Inc.


Target Corporation


SYSCO Corporation


Urban Outfitters, Inc.


Cisco Systems, Inc.

Campbell Soup Company (NYSE:CPB) makes packaged and canned food products for sale in the U.S. and internationally. It's $7.7B of annual revenue and 3.5% dividend look mmm-mmm good but it's balance sheet, valuation, and growth rate leave me with a salty aftertaste. The company has a levered balance sheet with negative $1.65B of net tangible assets. Its YoY revenue growth rate of 1.2% meets our screen but the last fiscal year's revenue was below the level it was two fiscal years prior. While the company generated $1.1B of positive operating cash flow last year, its P/OCF ratio is 10.1x and its EV/OCF ratio is 12.7x. While the company is trading near its 12-month low, I still would not characterize it as "cheap."

Best Buy (NYSE:BBY) is the electronics retailer of the same name. Unlike its plasma TVs, this stock appears to be cheap. The company has grown revenue from 2008 to 2009, 2009 to 2010, and analysts project growth for 2011 and 2012 according to Yahoo Finance. It is trading at a P/E ratio of 9.2 and an EV/EBITDA ratio of 5.6x. It is currently yielding 2.1%. There was a lukewarm Seeking Alpha article from March 31st that fretted over the Q4 numbers and speculated that the stock might be headed lower in the short-term (which it did). But, for long term investors, this looks like an interesting opportunity that is worthy of further research.

Target Corporation (NYSE:TGT) is another retailer. Though the company is offering an enticing 2% yield, much of the company's assets tangible assets are in PP&E and the company has $15.7B of total debt. Its EV/ETBIDTA ratio is 6.7x and its P/E ratio is 12.6. It also posted positive revenue growth for 2009 and 2010 and, according to Yahoo Finance, analysts project growth for 2011 and 2012. For income investors, the retail segment, broadly, looks appealing right now and BBY and TGT are probably worth more scrutiny in that mix.

Though less well-known than Best Buy and Target, SYSCO (NYSE:SYY) is a food distributor that is yielding 3.7%. On a valuation basis, it is trading at a premium to BBY and TGT, with an EV/EBITDA ratio of 8.3x and a P/E ratio of 14.4. Its revenue has been relatively flat over the last couple of years and the analysts, according to Yahoo Finance, expect more modest growth than for BBY and TGT in 2011 and 2012. I am less interested in SYSCO but income investors may like its high yield and relative stability.

Urban Outfitters (NASDAQ:URBN) is a well-known retailer that grew revenue 17% YoY and is expected to grow substantially in 2011 and 2012, according to Yahoo Finance. It is trading at an EV/EBITDA ratio of 10.9x and a P/E ratio of 18.9--this looks like more of a growth valuation despite trading near its 12-month low. Despite its comparatively high valuation, it still has a relatively low PEG ratio of 0.87 because of its substantial anticipated growth, according to Yahoo Finance. Maybe a growth investor can pick up the ball for URBN in the comments; it seems a little richly valued for my miserly taste.

Cisco Systems (NASDAQ:CSCO) is a manufacturer of networking equipment that grew revenue 11% YoY as technology spending increased following the recession. It is yielding 1.4% and has a very strong balance sheet, with net tangible assets of $26B and current assets less total liabilities of $15.7B (with very little inventory!). Its EV/EBITDA ratio is only 6.3 and its P/E ratio is 12.9. The company's PEG ratio is 1.04 with analysts projecting > 10% top line growth over the next 5 years, according to Yahoo Finance. The company also generated over $10B of operating cash flow in the last fiscal year relative to a market cap of $69.3B. I like growing technology companies, especially when they are priced at valuations that would be attractive to value investors. CSCO joins INTC and RIMM on my watchlist. While other technology investors chase "bubble-priced" high growth companies, I like strong cash flow, modest or better growth, and value-like valuations!

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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