8 Undervalued Industrial Small Caps Backed By The Sell Side

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Includes: AER, AIR, BAM, FSIN, ICA, MEA, TPC, XIDEQ
by: ZetaKap

Are you looking for stocks that you can get for a discount? Today we focused on industrial stocks that look undervalued from a price-multiple standpoint, and we narrowed our search by only looking at stocks that industry analysts have rated as 'Buy'. We came up with a pretty interesting list. Our hope is that we've found some good deals for you, but please remember that our lists are starting points for your own analysis and due diligence.

The Price/Book Value Ratio is a great price-multiple valuation metric to find companies that could be potentially undervalued or overvalued. If a firm has a Price/Book Value Ratio of less than 1 it is stated to be trading below "break up" value. A lower P/BV Ratio can indicate a potentially mispriced company or indicate that something is fundamentally wrong with it.

The PEG ratio (price/earnings to growth ratio) is a valuation metric for determining the relative trade-off between the price of a stock, the earnings generated per share [EPS], and the company's expected growth. In general, the P/E ratio is higher for a company with a higher growth rate. Thus using just the P/E ratio would make high-growth companies appear overvalued relative to others. It is assumed that by dividing the P/E ratio by the earnings growth rate, the resulting ratio is better for comparing companies with different growth rates. A lower ratio is 'better' (cheaper) and a higher ratio is 'worse' (expensive) - a PEG ratio of 1 means the company is fairly priced.

We first looked for industrial stocks. We then screened for businesses that analysts rate as "Buy" (2 < mean recommendation < 3). From here, we then looked for companies that are undervalued from a price-multiple valuation standpoint (P/BV<1)(PEG < 1). We did not screen out any market caps.

Do you think these stocks are worth more than the market currently says? Use our screened list as a starting point for your own analysis.

1) Exide Technologies (XIDE)

Sector: Industrial Goods
Industry: Industrial Electrical Equipment
Market Cap: $222.51M
Beta: 2.35
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Exide Technologies has a Analysts' Rating of 2.30, a Price/Book Value Ratio of 0.55, and a Price/Earnings to Growth Ratio of 0.31. The short interest was 8.05% as of 06/19/2012. Exide Technologies engages in the manufacture and supply of lead-acid batteries for transportation and industrial applications in the Americas, Europe, and rest of the world. It offers transportation batteries, which include ignition and lighting batteries for cars, trucks, off-road vehicles, agricultural and construction vehicles, motorcycles, recreational vehicles, marine, and other applications, including micro-hybrids. The company sells its batteries under the Centra, DETA, Exide, Exide Extreme, Exide NASCAR Select, Orbital, Fulmen, and Tudor brand names, as well as under various private labels.

2) AerCap Holdings N.V. (NYSE:AER)

Sector: Industrial Goods
Industry: Aerospace/Defense - Major Diversified
Market Cap: $1.61B
Beta: 1.73
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AerCap Holdings N.V. has a Analysts' Rating of 1.70, a Price/Book Value Ratio of 0.69, and a Price/Earnings to Growth Ratio of 0.78. The short interest was 0.88% as of 06/19/2012. AerCap Holdings N.V. operates as an integrated aviation company worldwide. It engages in leasing and trading aircraft. The company provides aircraft asset management and corporate services, which include remarketing aircraft; collecting rental and maintenance payments, monitoring aircraft maintenance, monitoring and enforcing contract compliance, and accepting delivery and redelivery of aircraft; conducting ongoing lessee financial performance reviews; periodically inspecting the leased aircraft; coordinating technical modifications to aircraft to meet new lessee requirements; conducting restructurings negotiations in connection with lease defaults; repossessing aircraft; arranging and monitoring insurance coverage; registering and de-registering aircraft; arranging for aircraft and aircraft engine valuations; and providing market research services.

3) Metalico Inc. (NYSEMKT:MEA)

Sector: Industrial Goods
Industry: Metal Fabrication
Market Cap: $102.25M
Beta: 1.86
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Metalico Inc. has a Analysts' Rating of 2.50, a Price/Book Value Ratio of 0.53, and a Price/Earnings to Growth Ratio of 0.93. The short interest was 4.29% as of 06/19/2012. Metalico, Inc., through its subsidiaries, engages in scrap metal recycling, platinum group and minor metals recycling, and lead metal products fabrication activities primarily in the United States. Its Scrap Metal Recycling segment collects industrial and obsolete ferrous and non-ferrous scrap metals; processes into reusable forms; and supplies the recycled metals to electric arc furnace mills, integrated steel mills, foundries, secondary smelters, aluminum recyclers, and metal brokers, as well as to exporters and international brokers. This segment offers ferrous products, which include sheared, bundled, and shredded scrap metal and other scrap metals, such as plate and structural, turnings, busheling, and broken cast iron; and sorts, processes, and packages non-ferrous metals, which include aluminum, copper, stainless steel, brass, nickel-based alloys, and high-temperature alloys for resale.

4) Fushi Copperweld, Inc. (NASDAQ:FSIN)

Sector: Industrial Goods
Industry: Industrial Electrical Equipment
Market Cap: $264.58M
Beta: 1.65
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Fushi Copperweld, Inc. has a Analysts' Rating of 2.30, a Price/Book Value Ratio of 0.66, and a Price/Earnings to Growth Ratio of 0.77. The short interest was 17.30% as of 06/19/2012. Fushi Copperweld, Inc., through its subsidiaries, engages in designing, developing, manufacturing, marketing, and distributing copper-clad bimetallic wire products, principally copper-clad aluminum (CCA) and copper-clad steel (CCS). The company offers its products for use in grounding applications, power cables, magnet wires, electrified railroad catenary cables, and tracer wires in the utility market; and within catenary cable for electrified rail applications, as well as in automobiles, trucks, motorcycles, commercial off road equipment, and trailers. It is also involved in the production and sale of power cables.

5) Empresas ICA, S.A.B. de C.V. (NYSE:ICA)

Sector: Industrial Goods
Industry: Heavy Construction
Market Cap: $907.02M
Beta: 1.78
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Empresas ICA, S.A.B. de C.V. has a Analysts' Rating of 2.00, a Price/Book Value Ratio of 0.78, and a Price/Earnings to Growth Ratio of 0.72. The short interest was 0.46% as of 06/19/2012. Empresas ICA, S.A.B. de C.V., through its subsidiaries, primarily engages in construction and related activities in Mexico and Latin America. The company's Civil Construction segment focuses on the construction of infrastructure projects, such as roads, highways, mass transit systems, bridges, dams, hydroelectric plants, prisons, tunnels, canals, and airports primarily in Mexico, as well as in other parts of Latin America, the Caribbean, Asia, and the United States. This segment is also involved in the construction, development, and remodeling of large multi-storied urban buildings, including office buildings, multiple-dwelling housing developments, and shopping centers.

6) Tutor Perini Corporation (NYSE:TPC)

Sector: Industrial Goods
Industry: Heavy Construction
Market Cap: $569.39M
Beta: 1.64
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Tutor Perini Corporation has a Analysts' Rating of 2.00, a Price/Book Value Ratio of 0.41, and a Price/Earnings to Growth Ratio of 0.61. The short interest was 4.37% as of 06/19/2012. Tutor Perini Corporation, together with its subsidiaries, provides diversified general contracting, construction management, and design-build services to private clients and public agencies worldwide. The company operates in four segments: Civil, Building, Specialty Contractors, and Management Services. The Civil segment engages in public works construction activities; and the repair, replacement, and reconstruction of infrastructure.

7) AAR Corp. (NYSE:AIR)

Sector: Industrial Goods
Industry: Aerospace/Defense Products & Services
Market Cap: $417.00M
Beta: 1.27
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AAR Corp. has a Analysts' Rating of 1.80, a Price/Book Value Ratio of 0.47, and a Price/Earnings to Growth Ratio of 0.47. The short interest was 6.11% as of 06/19/2012. AAR CORP. provides products and services to aviation, government, and defense markets worldwide. The company's Aviation Supply Chain segment purchases and sells new, overhauled, and repaired engine and airframe parts and components. It also repairs, overhauls, and sells avionics, electrical, electronic, fuel, hydraulic, and pneumatic components and instruments, as well as internal airframe components; and provides customized inventory supply and management programs for engine and airframe parts and components.

8) GrafTech International Ltd. (GTI)

Sector: Industrial Goods
Industry: Industrial Electrical Equipment
Market Cap: $1.33B
Beta: 2.05
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GrafTech International Ltd. has a Analysts' Rating of 1.80, a Price/Book Value Ratio of 0.97, and a Price/Earnings to Growth Ratio of 0.95. The short interest was 6.49% as of 06/19/2012. GrafTech International Ltd. engages in the manufacture and sale of synthetic and natural graphite and carbon based products worldwide. It operates in two segments, Industrial Materials and Engineered Solutions. The Industrial Materials segment manufactures and delivers graphite electrodes, which are used to produce steel and other non-ferrous metals; refractory products used in blast furnaces and submerged arc furnaces; and needle coke, a crystalline form of carbon used primarily in the production of graphite electrodes.

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

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