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Interested in industrial stocks? In search of companies that can manage their debt well? Looking for undervalued stocks? For ideas on where to look, we ran a screen you may be interested in.

The Debt/Equity Ratio illustrates how aggressively a company is financing its growth via debt. The more debt financing that is used in a capital structure, the more volatile earnings can become due to the additional interest expense. Should a company's potentially enhanced earnings fail to exceed the cost associated with debt financing over time, this can lead the company toward substantial trouble.

The Price/Earnings ratio is one of the most commonly used price-multiple metrics. Often, EPS from the last four quarters is used to derive this number. A firm that has a high P/E ratio generally indicates that investors have high expectations of the firm relative to future earnings growth. By the opposite token, investors generally have lower expectations of a firm with a low P/E ratio. A firm that holds a P/E below 10 could be viewed as having "value investment" potential. One thing to remember is that EPS is an accounting measure that could be potentially manipulated. Thus the P/E is only as good as the quality of the earnings.

The Price/Cash Flow ratio is a price-multiple valuation metric that also measures a firm's future financial health. An advantage of using cash flow is that it removes non-cash factors, which helps provide a clearer picture of how much money the firm is taking in from a valuation standpoint. Price/Cash Flow Ratio = Current Stock Price/Cash Flow Per Share.

We first looked for industrial stocks. We then looked for businesses that have maintained a sound capital structure (D/E Ratio<.3). We next screened for businesses that appear undervalued from a price-multiple perspective (P/E<10)(P/CFO<10). We did not screen out any market caps.

Do you think these stocks will trade at a higher valuation? Use our screened list as a starting point for your own analysis.

1) Quanex Building Products Corporation (NYSE:NX)

Sector:Industrial Goods
Industry:General Building Materials
Market Cap:$695.64M
Beta:1.58

Quanex Building Products Corporation has a Debt/Equity Ratio of 0.13 and Price/Earnings Ratio of 6.24 and Price/Cash Flow Ratio of 3.24. The short interest was 7.93% as of 04/30/2012. Quanex Building Products Corporation, together with its subsidiaries, provides engineered and aluminum sheet products worldwide. It operates in two segments, Engineered Products and Aluminum Sheet Products. The Engineered Products segment produces window and door components, and various products for original equipment manufacturers (OEMs) that serve the residential and commercial construction, and residential repair and remodel markets.

2) Perma-Fix Environmental Services Inc. (NASDAQ:PESI)

Sector:Industrial Goods
Industry:Waste Management
Market Cap:$85.21M
Beta:1.41

Perma-Fix Environmental Services Inc. has a Debt/Equity Ratio of 0.22 and Price/Earnings Ratio of 7.24 and Price/Cash Flow Ratio of 7.07. The short interest was 0.15% as of 04/30/2012. Perma-Fix Environmental Services, Inc., through its subsidiaries, operates as an environmental and technology know-how company in the United States. It operates in two segments, Treatment and Services. The Treatment segment provides nuclear, low-level radioactive, mixed waste containing hazardous and low-level radioactive constituents, and hazardous and non-hazardous waste treatment, processing, and disposal services primarily through four licensed and permitted treatment and storage facilities.

3) Material Sciences Corp. (NASDAQ:MASC)

Sector:Industrial Goods
Industry:Industrial Equipment & Components
Market Cap:$82.84M
Beta:2.20

Material Sciences Corp. has a Debt/Equity Ratio of 0.00 and Price/Earnings Ratio of 7.02 and Price/Cash Flow Ratio of 2.93. The short interest was 3.34% as of 04/30/2012. Material Sciences Corporation, together with its subsidiaries, engages in the design, manufacture, and marketing of material-based solutions for acoustical and coated applications in the United States and internationally. It offers acoustical material-based solutions, which include multilayer composites consisting of metals, polymers, and other coated materials used to manage noise and vibration in automotive body panel parts, brake dampers, engine parts, appliances, and computer disk drives, as well as heating, ventilating, and air conditioning products.

The company also provides coated material-based solutions that comprise painted, electrogalvanized protective, decorative, and functional coatings applied to coils of metals for automotive fuel tanks, building products, gaskets, appliances, and lighting fixtures. Material Sciences Corporation primarily serves customers in the automotive, appliance, building and construction, lighting, and electronic markets.

4) Ceradyne Inc. (CRDN)

Sector:Industrial Goods
Industry:Industrial Equipment & Components
Market Cap:$626.67M
Beta:1.45

Ceradyne Inc. has a Debt/Equity Ratio of 0.13 and Price/Earnings Ratio of 9.97 and Price/Cash Flow Ratio of 2.32. The short interest was 5.74% as of 04/30/2012. Ceradyne, Inc. engages in the development, manufacture, and market of technical ceramic products, ceramic powders, and components in the United States and internationally. Its products include lightweight ceramic armor and combat helmets for soldiers and other military applications; ceramic industrial components for erosion and corrosion resistant applications; ceramic powders, including boron carbide, boron nitride, titanium diboride, calcium hexaboride, zirconium diboride, and fused silica, which are used in manufacturing armor and a range of industrial and consumer products; evaporation boats for metallization of materials for food packaging; and ceramic diesel engine components.

The company also offers functional and frictional coatings primarily for automotive applications; translucent ceramic orthodontic brackets; ceramic crucibles for melting silicon in the photovoltaic solar cell manufacturing process; ceramic-impregnated dispenser cathodes for microwave tubes, lasers, and cathode ray tubes; specialty glass compositions for solar, electronic, industrial, and health care markets; ceramic missile radomes for the defense industry; and fused silica powders for precision investment casting.

*Company profiles were sourced from Finviz. Financial data was sourced from Finviz and Google Finance.

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

Source: 4 Cheap Industrial Companies That Can Manage Debt