Clearly there is a lot of investor angst in the Consumer Discretionary sector. As this is October, a month traditionally that begins the season where professional investors attempt to reap those tax-losses and purge their year-end holdings of embarrassing mistakes, I wanted to see if there are any babies in the proverbial bathwater. The list below, generated using StockVal, includes stocks with current prices above 5, market capitalizations in excess of $100mm, PE below 20, Price/Book below 3 and Total Debt to Capital below 20%. Most importantly, they are all extremely oversold, based upon a measure of current price to trending price. In other words, these stocks are beaten down but don’t appear on the surface like they are terminal:
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I am familiar with a few of these names and believe that Chicos (NYSE:CHS) and DSW (NYSE:DSW) deserve a very close look. Men’s Wearhouse (MW) is on my watchlist and is a great company that just had a bad quarter in my opinion. I will be following up on this name with an article later this month. I expect that it will bottom between 37 and 40. Remember, screens like these are starting places only, but this is one beaten down group of companies.