Are you interested in growth sectors such as consumer goods? Today we focused on mid cap consumer stocks that are projected to grow over the next year. We narrowed the list by focusing on companies whose fundamentals suggest they're worth more than their current prices let on, meaning now is the time to give these companies a closer look. We think you'll like the list we came up with.
EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. The 1-Year Expected EPS Growth Rate is an annual growth estimate, where the growth projections are made by analysts, the company or other credible sources.
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
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.
We first looked for mid cap consumer stocks. Next, we then screened for businesses that have expected earnings per share growth of more than 25 percent for next year(1-year projected EPS Growth Rate>25%). Next, we then screened for businesses that are trading at a discount (P/S<1)(forward P/E<10).
Do you think these mid-cap stocks are worth more than the market currently says? Please use our list to assist with your own analysis.
1) Rock-Tenn Co. (RKT)
|Industry:||Packaging & Containers|
Rock-Tenn Co. has a 1-Year Projected Earnings Per Share Growth Rate of 43.92% and Price/Sales Ratio of 0.43 and Forward Price/Earnings Ratio of 7.37. The short interest was 1.87% as of 05/31/2012. Rock-Tenn Company manufactures and sells containerboard, recycled paperboard, bleached paperboard, packaging products, and merchandising displays in the United States, Canada, Mexico, Chile, Argentina, Puerto Rico, and China. The company provides linerboard and corrugated medium, corrugated sheets and packaging, and preprinted linerboard for manufacturers of corrugated box, and industrial and consumer products; converts corrugated sheets into corrugated products; and provides structural design and engineering services. It also offers folding cartons for packaging applications; express mail envelopes for the overnight courier industry; and coated recycled and bleached paperboard products to manufacturers of folding cartons and other paperboard products. In addition, the company manufactures temporary and permanent point-of-purchase displays for consumer product companies; provides contract packing services, such as multi-product promotional packing and product manipulation; and manufactures lithographic laminated packaging.
2) Visteon Corp. (NYSE:VC)
Visteon Corp. has a 1-Year Projected Earnings Per Share Growth Rate of 32.43% and Price/Sales Ratio of 0.28 and Forward Price/Earnings Ratio of 9.32. The short interest was 2.74% as of 05/31/2012. Visteon Corporation designs, manufactures, and supplies automotive systems, modules, and components to automotive original equipment manufacturers worldwide. The company offers climate products, including integrated heating, ventilation, and air conditioning systems, such as evaporators, condensers, heater cores, climate controls, compressors, air handling cases, and fluid transport systems; and components and modules that provide cooling and thermal management for the vehicle's engine and transmission, as well as for batteries and power electronics on hybrid and electric vehicles. It also offers electronics products comprising audio/infotainment systems and components, such as base radio/CD head units, infotainment head units, audiophile systems, amplifiers, rear seat family entertainment systems, digital and satellite radios, HD and DAB broadcast tuners, MACH voice link technology, and connectivity solutions for portable devices; driver information systems, such as instrument clusters and displays; powertrain and feature control modules; electronic climate controls, such as single zone manual electronic and automatic multiple zone modules; and integrated control panels. In addition, the company provides interior products, including cockpit modules, such as structural, electronic, climate control, mechanical, and safety components; door panels/modules and interior trim products; and console modules, which deliver storage options.
3) Sealed Air Corporation (NYSE:SEE)
|Industry:||Packaging & Containers|
Sealed Air Corporation has a 1-Year Projected Earnings Per Share Growth Rate of 27.08% and Price/Sales Ratio of 0.47 and Forward Price/Earnings Ratio of 8.59. The short interest was 1.79% as of 05/31/2012. Sealed Air Corporation, through its subsidiaries, provides food safety and security, facility hygiene, and product protection solutions worldwide. Its Food Packaging segment provides shrink bags and vacuum packaging products; packaging materials for cook-in applications; laminated and coextruded rollstock packaging materials used in thermoforming and form, fill, and seal applications; and associated packaging equipment and systems, including bag loaders, dispensers, and vacuum chamber systems. The company's Food Solutions segment offers case-ready packaging offerings; ready meals packaging technologies; vertical pouch packaging solutions for packaging flowable food products; foam and plastic trays; absorbent products for food packaging; and related packaging equipment, including vacuum chamber systems.
*Company profiles were sourced from Finviz. Financial data was sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.