Seeking Alpha
Value, growth, long-term horizon, medium-term horizon
Profile| Send Message|
( followers)  

Do you consider yourself a contrarian investor, always looking for opportunities against the trend? For ideas on how to start your own contrarian search, we ran a screen.

We began by screening the consumer goods sector for stocks that appear undervalued relative to free cash flows, with P/FCF below 15. We also screened for stocks that are technically oversold, with relative strength index ratings over the last two weeks below 40.

We then screened these names for those with strong trends in revenue compared to inventory over the last year. We screened for companies seeing faster growth in revenue than inventory over the last year. Since inventory represents the portion of goods not yet sold, faster growth in revenue than inventory is considered a good sign.

To screen for healthy liquidity, we also only focused on those companies with inventory declining as a percent of current assets.

Interactive Chart: Press Play to compare changes in market cap over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.

We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.

Do you think these stocks will see a rebound? Use this list as a starting point for your own analysis.

List sorted by increase in revenue over the last year.

1. Omega Protein Corp. (OME): Distributes fish meal and fish oil products in the United States. Market cap at $127.99M, most recent closing price at $6.53. P/FCF at 11.51.RSI(14) at 27.25. Revenue grew by 45.72% during the most recent quarter ($62.85M vs. $43.13M y/y). Inventory grew by -13.12% during the same time period ($64.89M vs. $74.69M y/y). Inventory, as a percentage of current assets, decreased from 67.12% to 47.33% during the most recent quarter (comparing 3 months ending 2011-12-31 to 3 months ending 2010-12-31).

2. Shuffle Master Inc. (SHFL): Develops, manufactures, and markets technology and entertainment-based products for the gaming industry worldwide. Market cap at $894.59M, most recent closing price at $16.28. P/FCF at 14.27.RSI(14) at 34.26. Revenue grew by 27.94% during the most recent quarter ($56.05M vs. $43.81M y/y). Inventory grew by -23.39% during the same time period ($24.69M vs. $32.23M y/y). Inventory, as a percentage of current assets, decreased from 29.95% to 24.58% during the most recent quarter (comparing 3 months ending 2012-01-31 to 3 months ending 2011-01-31).

3. Coca-Cola Hellenic Bottling Company S.A. (CCH): Engages in the production, sale, and distribution of alcohol-free beverages primarily in Europe. Market cap at $6.13B, most recent closing price at $16.71. P/FCF at 9.54.RSI(14) at 21.16. Revenue grew by 2.27% during the most recent quarter ($1,528.8M vs. $1,494.9M y/y). Inventory grew by -6.27% during the same time period ($451.5M vs. $481.7M y/y). Inventory, as a percentage of current assets, decreased from 24.97% to 22.02% during the most recent quarter (comparing 3 months ending 2011-12-31 to 3 months ending 2010-12-31).

4. Johnson Outdoors Inc. (JOUT): Engages in the design, manufacture, and marketing of outdoor recreation products worldwide. Market cap at $156.26M, most recent closing price at $15.80. P/FCF at 12.66.RSI(14) at 32.85. Revenue grew by 1.88% during the most recent quarter ($80.18M vs. $78.7M y/y). Inventory grew by -6.14% during the same time period ($79.02M vs. $84.19M y/y). Inventory, as a percentage of current assets, decreased from 45.45% to 41.97% during the most recent quarter (comparing 13 weeks ending 2011-12-30 to 13 weeks ending 2010-12-31).

*Accounting data sourced from Google Finance, all other data sourced from Finviz.

Source: 4 Undervalued And Oversold Consumer Goods Stocks With Strong Inventory Trends