Are you on the prowl for companies that analysts have rated highly, but that look worth more than their current price indicates? If so, we ran a screen you might find interesting.
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 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 consumer stocks. We then looked for companies that analysts rate as "Buy" or "Strong Buy" (mean recommendation < 3). We next screened for businesses that are trading at a discount (P/S<1)(P/CFO<10). We did not screen out any market caps.
Do you think these stocks are worth more than their current valuations? Please use our list to assist with your own analysis.
1) Graphic Packaging Holding Company (NYSE:GPK)
|Industry:||Packaging & Containers|
Graphic Packaging Holding Company has a Analysts' Rating of 1.60 and Price/Sales Ratio of 0.46 and Price/Cash Flow Ratio of 64.44. The short interest was 1.76% as of 06/01/2012. Graphic Packaging Holding Company, together with its subsidiaries, provides packaging solutions in the United States, Canada, Central/South America, Europe, and the Asia-Pacific. The company operates in two segments, Paperboard Packaging and Flexible Packaging. The Paperboard Packaging segment produces a range of paperboard grades convertible into folding cartons that are used primarily to protect products, such as food, detergents, paper products, beverages, and health and beauty aids.
2) Ford Motor Co. (NYSE:F)
|Industry:||Auto Manufacturers - Major|
Ford Motor Co. has a Analysts' Rating of 2.10 and Price/Sales Ratio of 0.30 and Price/Cash Flow Ratio of 2.64. The short interest was 3.97% as of 06/01/2012. Ford Motor Company engages in the development, manufacture, distribution, and service of vehicles and related parts worldwide. The company operates through two sectors, Automotive and Financial Services. The automotive sector offers vehicles primarily under the Ford and Lincoln brand names. This sector markets cars, trucks, and parts through retail dealers in North America, and through distributors and dealers outside North America.
3) Hooker Furniture Corp. (NASDAQ:HOFT)
|Industry:||Home Furnishings & Fixtures|
Hooker Furniture Corp. has a Analysts' Rating of 2.00 and Price/Sales Ratio of 0.53 and Price/Cash Flow Ratio of 2.94. The short interest was 1.26% as of 06/01/2012. Hooker Furniture Corporation, together with its subsidiaries, designs, develops, imports, and markets residential wood, metal, and upholstered furniture products in North America. The company offers wood furniture products, including home entertainment, home office, accent, dining, bedroom, and bath furniture in the upper-medium price points sold under the Hooker Furniture brand, and sold at moderate price points under the Envision Lifestyle Collections by Hooker Furniture brand. It also provides youth bedroom furniture under the Opus Designs by Hooker brand; and motion and stationary leather furniture. In addition, the company offers various residential leather and fabric upholstered furniture under the Bradington-Young and Seven Seas upholstery brand; specializes in leather reclining and motion chairs, sofas, club chairs, and executive desk chairs; and offers upscale occasional chairs and other seating under the Sam Moore upholstery brand.
4) Johnson Outdoors Inc. (NASDAQ:JOUT)
Johnson Outdoors Inc. has a Analysts' Rating of 1.00 and Price/Sales Ratio of 0.44 and Price/Cash Flow Ratio of 6.07. The short interest was 1.73% as of 06/01/2012. Johnson Outdoors Inc., together with its subsidiaries, designs, manufactures, and markets seasonal outdoor recreation products used primarily for fishing, diving, paddling, and camping. Its Marine Electronics segment offers battery powered fishing motors for trolling or primary propulsion; sonar and GPS equipment for fish finding and navigation; downriggers for controlled-depth fishing; leisure boat navigation technology; and lake charts. The company's Outdoor Equipment segment provides consumer tents, sleeping bags, camping furniture, and other recreational camping products; commercial tents, such as party tents and accessories, including lighting systems, interior lining options, and mounting brackets; heavy-duty tents and lightweight backpacking tents for the military, including modular general purpose tents, rapid deployment shelters, and lightweight one and two person tents; and military tent accessories, such as fabric floors, as well as field compasses and digital instruments, and performance measurement instruments.
*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.