9 Heavily Oversold Companies With Strong Top Line Growth

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Includes: CMPR, CTB, IMAX, ITMN, KEM, MDSO, MLHR, OSK, SMI
by: Follow My Alpha

The market sliced and diced investor confidence into confetti over the last month. While that wouldn’t make most people happy, we don’t see a reason to cry over spilt milk; it's better to focus on the positive, which is cheaper stocks that are still growing the top line along with sound shareholder profitability.

Return on Equity is a performance ratio that illustrates profitability relative to the shareholder. It puts net income over shareholder equity and demonstrates a company’s return on equity invested. Investors who want to see the return relative to common equity can deduct preferred equity from shareholder equity and preferred dividends from net income.

We ran a screen for companies with strong top line growth (one-year revenue growth>15%). From this pool, we screened for companies that had a strong ROE (X>15) and dropped at least 30% in the last month.

The list is ranked from the least worst performing to worst performing over the last month. As usual, short interest information is as of July 15.

1. Kemet Corporation (KEM)

Sector

Technology

Industry

Electronic Components

Market Cap

$ 441M

Beta

4.36

Analyst Sentiment

4/5 -List Buy/Outperform (Bullish)

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The company is a manufactures multilayer ceramic capacitors, solid aluminum capacitors, and of tantalum capacitors. The firm’s one-year revenue growth is 38.32%. KEM’s ROE (ttm) is 35.40%. The stock has fallen 30.21% in the last month. The short interest is 5.00%.

2. Herman Miller, Inc. (MLHR)

Sector

Industrials

Industry

Business Equipment

Market Cap

$ 1,112M

Beta

1.23

Analyst Sentiment

3/6 -List Buy/Outperform (Neutral)

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The company designs and manufactures interior furnishings for various environments such as office and residential settings. The firm’s one-year revenue growth is 25.05%. MLHR’s ROE (ttm) is 49.67%. The stock has fallen 30.24% in the last month. The short interest is 6.30%.

3. Medidata Solutions, Inc. (MDSO)

Sector

Technology

Industry

Software - Application

Market Cap

$ 393M

Beta

0.27

Analyst Sentiment

4/7 -List Buy/Outperform (Bullish)

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Medidata Solutions provides software-as-a-service (SaaS) relative to clinical technology solutions. The firm’s one-year revenue growth is 18.54%. MDSO’s ROE (ttm) is 64.13%. The stock has fallen 33.44% in the last month. The short interest is 5.70%.

4. InterMune, Inc. (ITMN)

Sector

Healthcare

Industry

Biotechnology

Market Cap

$ 1,394M

Beta

2.45

Analyst Sentiment

12/15 -List Buy/Outperform (Bullish)

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The company develops and sells pulmonology and hepatology therapies. The firm’s one-year revenue growth is 432.43%. ITMN’s ROE (ttm) is 186.22%. The stock has fallen 35.33% in the last month. The short interest is 10.60%. Given the short interest percentage, this may be a short favorite or potentially a short squeeze target.

5. Cooper Tire & Rubber Company (CTB)

Sector

Consumer Cyclical

Industry

Rubber & Plastics

Market Cap

$ 762M

Beta

2.40

Analyst Sentiment

5/6 -List Buy/Outperform (Bullish)

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The company manufactures replacement tires and other pieces of equipment for light trucks. The firm’s one-year revenue growth is 20.94%. CTB’s ROE (ttm) is 25.86%. The stock has fallen 36.22% in the last month. The short interest is 4.00%.

6. Imax Corporation (IMAX)

Sector

Consumer Cyclical

Industry

Media - Diversified

Market Cap

$ 1,123M

Beta

2.10

Analyst Sentiment

12/18 -List Buy/Outperform (Bullish)

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The company develops, leases, and sells digital and film based motion picture technologies. The firm’s one-year revenue growth is 45.21%. IMAX’s ROE (ttm) is 47.13%. The stock has fallen 37.07% in the last month. The short interest is 13.10%. Given the short interest percentage, this too may be a short favorite or potentially a short squeeze target.

7. Semiconductor Manufacturing (SMI)

Sector

Technology

Industry

Semiconductors

Market Cap

$ 1,321M

Beta

1.71

Analyst Sentiment

8/12 -List Bearish/Underperform (Bearish)

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The company provides semiconductor fabrication services using 0.35 micron to 90-nanometer process technology. The firm’s one-year revenue growth is 45.25%. SMI’s ROE (ttm) is 24.08%. The stock has fallen 38.52% in the last month.

8. VistaPrint, Ltd. (VPRT)

Sector

Consumer Cyclical

Industry

Marketing Services

Market Cap

$ 1,211M

Beta

1.16

Analyst Sentiment

9/14 -List Hold/Neutral (Neutral)

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The company does graphic design services and customized printed products for customers worldwide. The firm’s one-year revenue growth is 29.90% VPRT’s ROE (ttm) is 20.04%. The stock has fallen 39.84% in the last month. The short interest is 14.00%. Given the short interest percentage, this again may be a short favorite or potentially a short squeeze target.

9. Oshkosh Corporation (OSK)

Sector

Industrials

Industry

Truck Manufacturing

Market Cap

$ 1,670M

Beta

2.50

Analyst Sentiment

8/16 – List Hold / Neutral (Neutral)

Click to enlarge

The company designs and manufactures a variety of specialty vehicles and vehicle bodies. The firm’s one-year revenue growth is 87.36%. OSK’s ROE (ttm) is 25.26%. The stock has fallen 41.62% in the last month. The short interest is 2.50%.

As usual, we hope this list helps investors as they do their own due diligence and look for company that's are pushing strong top line growth and a sturdy ROE.

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