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If you're interested in gaining exposure to U.S. consumer growth, the following list might interest you.

Below is a list of 4 consumer goods companies that have seen faster growth in quarterly operating cash flow than quarterly net income year-over-year.

Comparing growth in cash flow and growth in net income is helpful because it indicates whether cash or accruals is becoming an increasingly larger part of earnings. Companies with faster growth in cash flow than net income thus see an improvement in earnings quality.



Do you think these names are reliable investments? Use this list as a starting-off point for your own analysis into potential value investments.

List sorted by difference between growth in cash flow and growth in net income.

1. Treehouse Foods, Inc. (THS): Processed & Packaged Goods Industry. Market cap of $2.09B. Net Income grew by 27.12% ($28.1M vs. $22.1M y/y), while Operating Cash Flow grew by 87.93% ($49.5M vs. $26.3M y/y) (comparing 3 months ending 2010-12-31 vs. 3 months ending 2009-12-31).

THS has a relatively low correlation to the market (beta = 0.43), which may be appealing to risk-averse investors. The stock is also a short squeeze candidate, with a short float at 11.54% (equivalent to 18.1 days of average volume).

2. Darling International Inc. (DAR): Cleaning Products Industry. Market cap of $1.83B. Net Income grew by 8.69% ($10.0M vs. $9.2M y/y), while Operating Cash Flow grew by 56.14% ($27.8M vs. $17.8M y/y) (comparing 13 weeks ending 2011-01-01 vs. 13 weeks ending 2010-01-02). The stock has gained 72.91% over the last year.

3. Ralcorp Holdings Inc. (RAH): Processed & Packaged Goods Industry. Market cap of $3.81B. Net Income grew by 6.10% ($71.3M vs. $67.2M y/y), while Operating Cash Flow grew by 20.48% ($126.5M vs. $105.0M y/y) (comparing 3 months ending 2010-12-31 vs. 3 months ending 2009-12-31).

Risk-averse investors may appreciate that RAH has a relatively low correlation to the market (beta = 0.23). The stock has gained 4.51% over the last year.

4. Ball Corporation (BLL): Packaging & Containers Industry. Market cap of $6.21B. Net Income grew by 13.27% ($92.2M vs. $81.4M y/y), while Operating Cash Flow grew by 19.88% ($216.5M vs. $180.6M y/y) (comparing 3 months ending 2010-12-31 vs. 3 months ending 2009-12-31). The stock has gained 36.65% over the last year.

*Accounting data sourced from Google Finance, all other data sourced from Finviz.

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

Source: 4 Consumer Goods Stocks With High Growth in Operating Cash Flow