10 Dirt Cheap Stocks With Strong Earnings Growth And Bullish Momentum

|
 |  Includes: AGO, BYD, CAL, KYO, L, LUV, RCL, SHG, UMC, XL
by: Follow My Alpha

In a recent twist of events it looks like the global economy may be improving more than expected based off recent earning and economic data releases. While this doesn't mean this is the "all clear" what it does clearly point out is that investors should always be looking for the next opportunity regardless of market volatility. In particular, we just identified some potential opportunities where firms are trading at dirt cheap valuations, growing the bottom line, and recently took a bullish streak in the market.

The price/book value ratio is a valuation metric that looks to identify potentially mispriced stocks based off their assets and liabilities. A firm that is trading below 1 can often indicate that something is fundamentally wrong with the firm or that it may be extraordinarily mispriced. Either way when we see firms like this we think it's always best to take a little bit of time and dig beyond the surface to see if there might be an hidden treasure.

The 1-year fiscal EPS growth rate is a profitability metric that illustrates a firms bottom line growth over multiple quarters. The reason this matters is because it helps average out any one spectacular quarter in the year. More importantly, it helps provide a better picture of how well the firm has navigated the challenging economic environment.

We first looked for companies that have a low P/BV ratios (X<1). From this narrowed list we then screened for firms that have increased their bottom line profitability (1-year fiscal EPS growth rate>10%) and outperformed the S&P 500 in the last month.

The list is ranked from highest to lowest by the 1-year fiscal EPS growth rate:

1. United Microelectronics Corp. (NYSE:UMC)

Sector

Technology

Industry

Semiconductors

Market Cap

$5,403M

Beta

1.04

Click to enlarge

The company builds and sells semiconductors. The firm has a P/BV ratio of 0.78. UMC’s 1-year EPS growth rate is 523.33% and it has increased by 8.90% in the last month. The short interest was N/A as of 09/30/2011.

2. Southwest Airlines Co. (NYSE:LUV)

Sector

Industrials

Industry

Airlines

Market Cap

$7,131M

Beta

1.43

Click to enlarge

A US airline that focuses on low-fare service. The firm has a P/BV ratio of 0.99. LUV’s 1-year EPS growth rate is 369.23% and it has increased by 6.87% in the last month. The short interest was 3.80% as of 09/30/2011.

3. Assured Guaranty Ltd. (NYSE:AGO)

Sector

Financial Services

Industry

Insurance - Specialty

Market Cap

$2,301M

Beta

2.70

Click to enlarge

The firm offers credit enhancement products to the mortgage markets, public finance, and structured finance. The firm has a P/BV ratio of 0.58. AGO’s 1-year EPS growth rate is 286.67% and it has increased by 22.93% in the last month. The short interest was N/A as of 09/30/2011.

4. Brown Shoe Company, Inc. (BWS)

Sector

Consumer Cyclical

Industry

Footwear & Accessories

Market Cap

$339M

Beta

2.40

Click to enlarge

The firm offers operates retail shoe stores. The firm has a P/BV ratio of 0.87. BWS’s 1-year EPS growth rate is 286.36% and it has increased by 23.96% in the last month. The short interest was 26.80% as of 09/30/2011.

5. Royal Caribbean Cruises, Ltd. (NYSE:RCL)

Sector

Consumer Cycl

Industry

Resorts & Casinos

Market Cap

$5,958M

Beta

3.21

Click to enlarge

OThe firm operates Royal Caribbean International and Celebrity Cruises, which offers cruise tours around the world. The firm has a P/BV ratio of 0.71. RCL’s 1-year EPS growth rate is 234.67% and it has increased by 12.64% in the last month. The short interest was 6.40% as of 09/30/2011.

6. Kyocera Corporation. (NYSE:KYO)

Sector

Technology

Industry

Consumer Electronics

Market Cap

$17,048M

Beta

1.15

Click to enlarge

The firm operates in multiple high-tech fields from fine ceramic components to networks. The firm has a P/BV ratio of 0.90. KYO’s 1-year EPS growth rate is 205.41% and it has increased by 8.65% in the last month. The short interest was N/A as of 09/30/2011.

7. XL Group PLC. (NYSE:XL)

Sector

Financial Services

Industry

Insurance - Property & Casualty

Market Cap

$6,416M

Beta

2.52

Click to enlarge

The firm provides insurance, financial products and other related services. The firm has a P/BV ratio of 0.67. XL’s 1-year EPS growth rate is 183.61 % and it has increased by 13.19 % in the last month. The short interest was 1.60% as of 09/30/2011.

8. Shinhan Financial Group Co., L. (NYSE:SHG)

Sector

Financial Services

Industry

Banks - Regional - Asia

Market Cap

$17,756M

Beta

2.00

Click to enlarge

A financial holding company in Korea. The firm has a P/BV ratio of 0.76 SHG.’s 1-year EPS growth rate is 176.37 % and it has increased by 10.60 % in the last month. The short interest was N/A as of 09/30/2011.

9. Boyd Gaming Corporation. (NYSE:BYD)

Sector

Consumer Cyclical

Industry

Resorts & Casinos

Market Cap

$522M

Beta

2.60

Click to enlarge

The firm is a gaming company. The firm has a P/BV ratio of 0.44. BYD’s 1-year EPS growth rate is 140.00% and it has increased by 12.24% in the last month. The short interest was N/A as of 09/30/2011.

10. Loews Corporation. (NYSE:L)

Sector

Financial Services

Industry

Insurance - Property & Casualty

Market Cap

$15,622M

Beta

1.25

Click to enlarge

The firm offers commercial property and casualty insurance. The firm has a P/BV ratio of 0.82. L’s 1-year EPS growth rate is 137.40 % and it has increased by 9.58% in the last month. The short interest was 1.40% as of 09/30/2011.

We hope this list helps as investors do their own due diligence and research on firms that are trading at low P/BV valuations have explosive earnings growth.

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