Interested in industrial stocks? Looking for undervalued stocks? You might like what we've put in our list.
The Current ratio is a liquidity ratio used to determine a company's financial health. The metric illustrates how easily a firm can pay back its short obligations all at once through current assets. A company that has a current ratio of one or less is generally a liquidity red flag. Now this doesn't mean the company will go bankrupt tomorrow, but it also doesn't bode well for the company, and may indicate that it could have an issue paying back upcoming obligations.
The Quick ratio measures a company's ability to use its cash or assets to extinguish its current liabilities immediately. Quick assets include assets that presumably can be converted to cash at close to their book values. A company with a Quick Ratio of less than 1 cannot currently pay back its current liabilities. The quick ratio is more conservative than the Current Ratio because it excludes inventory from current assets, since some companies have difficulty turning their inventory into cash. If short-term obligations need to be paid off immediately, sometimes the current ratio would overestimate a company's short-term financial strength. In general, the higher the ratio, the greater the company's liquidity (i.e., the better able to meet current obligations using liquid assets).
The forward P/E is a price multiple valuation metric, which is similar to the current P/E ratio, except that it uses the forecasted earnings instead. While this number might not be as accurate because it uses "forecasted" numbers, it does offer the benefit of illustrating analysts' expectations of a firm. If the market believes that earnings will grow moving forward, then the forward P/E should be lower than the current P/E. Financial Leverage, also known as the Equity Multiplier, illustrates how a firm is financing its assets. The lower the number the more a firm is financing its assets internally through stockholder equity. The higher this metric is the more the firm is relying on debt to finance its assets.
The Price/Sales ratio is a price-multiple valuation metric used to help identify if a firm is cheap by its twelve month trailing sales numbers. In the most basic terms it let's an investor know how much the investment community is willing to pay for every dollars worth of sales. A firm with a P/S ratio of one or lower would be viewed as cheap because investors are paying $1 or less for every dollars worth of a firm's sales. On the other hand, a firm is generally considered to be expensive when the P/S ratio is above three. These are general guidelines used by the investment community not hard rules to be clear. Price/Sales Ratio = Current Stock Price/Revenue (sales) per Share
We first looked for industrial stocks. Next, we then screened for businesses with a large amount of cash on hand (Current Ratio>2)(Quick Ratio>2). From here, we then looked for companies with a low price-multiple premium (forward P/E<10)(P/S<1). We did not screen out any market caps.
Do you think these stocks deserve to trade higher? Use our screened list as a starting point for your own analysis.
1) LSB Industries Inc. (NYSE:LXU)
|Industry:||General Building Materials|
LSB Industries Inc. has a Current Ratio of 3.38 and Quick Ratio of 2.76 and Forward Price/Equity Ratio of 7.33 and Price/Sales Ratio of 0.96. The short interest was 2.92% as of 05/02/2012. LSB Industries, Inc., through its subsidiaries, engages in the manufacture and sale of geothermal and water source heat pumps, air handling products, and chemical products. The company operates in two segments, Climate Control Business and Chemical Business. The Climate Control Business segment manufactures and sells heating, ventilation, and air conditioning (HVAC) products that include geothermal and water source heat pumps; hydronic fan coils; and other HVAC products, such as custom air handlers and modular geothermal chillers.
2) Coleman Cable, Inc. (NASDAQ:CCIX)
|Industry:||Industrial Electrical Equipment|
Coleman Cable, Inc. has a Current Ratio of 3.89 and Quick Ratio of 2.22 and Forward Price/Equity Ratio of 4.99 and Price/Sales Ratio of 0.17. The short interest was 3.10% as of 05/02/2012. Coleman Cable, Inc. designs, develops, manufactures, and supplies electrical wire and cable products for consumer, commercial, and industrial applications primarily in the United States and Canada. It provides industrial wire and cable products, including portable cords, machine tool wiring, building wires, welding, mining, pump, control, stage/lighting, diesel/locomotive, instrumentation, tray, thermocouple, high temperature, and metal clad cables, as well as other power cord products under the Royal, Seoprene, Copperfield, Continental, Triangle, and Corra/Clad brand names. The company also offers assembled wire and cable products comprising various types of extension cords, ground fault circuit interrupters, portable lighting, retractable reels, holiday items, solar lighting, recreational vehicle cords and adapters, and surge and strip products, as well as booster cables, battery cables, and battery accessories for the automotive aftermarket.
3) Cascade Corp. (NYSE:CASC-OLD)
|Industry:||Farm & Construction Machinery|
Cascade Corp. has a Current Ratio of 3.75 and Quick Ratio of 2.22 and Forward Price/Equity Ratio of 8.22 and Price/Sales Ratio of 0.97. The short interest was 2.60% as of 05/02/2012. Cascade Corporation engages in the manufacture and distribution of materials handling load engagement devices and related replacement parts under the Cascade name primarily for the lift truck and construction industries worldwide. It offers lift truck related products that are designed to handle loads with pallets and for specialized application loads without pallets; and specialized products, which include devices specifically designed to handle appliances, carpet and paper rolls, baled materials, textiles, beverage containers, drums, canned goods, bricks, masonry blocks, lumber, and plywood, as well as boxed, packaged, and containerized products. The company also provides construction related products to enable loaders, backhoes, and rough terrain lift trucks to move materials, as well as for use on excavators and loaders for conventional and specialized ground engagement applications. Its customers include lift truck original equipment manufacturers (OEM), original equipment dealers, and distributors; and OEMs who manufacture construction, mining, agricultural, and industrial vehicles.
4) Altra Holdings, Inc. (NASDAQ:AIMC)
|Industry:||Industrial Electrical Equipment|
Altra Holdings, Inc. has a Current Ratio of 3.24 and Quick Ratio of 2.00 and Forward Price/Equity Ratio of 9.87 and Price/Sales Ratio of 0.71. The short interest was 5.06% as of 05/02/2012. Altra Holdings, Inc., through its subsidiary, Altra Industrial Motion, Inc., designs, produces, and markets a range of mechanical power transmission and motion control products worldwide. The company provides industrial clutches and brakes for elevators, forklifts, lawn mowers, oil well draw works, punch presses, and conveyors; open and enclosed gearing products for conveyors, ethanol mixers, packaging machinery, and metal processing equipment; and engineered couplings for extruders, turbines, steel strip mills, and pumps.
5) LMI Aerospace Inc. (NASDAQ:LMIA)
|Industry:||Aerospace/Defense Products & Services|
LMI Aerospace Inc. has a Current Ratio of 4.45 and Quick Ratio of 2.35 and Forward Price/Equity Ratio of 8.66 and Price/Sales Ratio of 0.84. The short interest was 2.57% as of 05/02/2012. LMI Aerospace, Inc. provides design engineering services, structural assemblies, kits, and components to the aerospace, defense, and technology markets primarily in the United States. The company operates in two segments, Aerostructures and Engineering Services. The Aerostructures segment fabricates, machines, finishes, integrates, assembles, and kits formed close tolerance aluminum, specialty alloy, and composite components, as well as higher level assemblies.
*Company profiles were sourced from Finviz. Financial data was sourced from Google Finance and Yahoo Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.