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Do you consider a stock's sales trends when choosing among names? For ideas on how to start your own sales analysis, we ran a screen.

We began by screening the services sector for undervalued stocks, with PEG ratios below 1.

We then screened for strong sales trends by comparing growth in revenue to growth in inventory over the last year. We screened for stocks with positive sales trends, with 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 an encouraging sign.

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

For an ‪interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.‬

Tool provided by Kapitall.com

Do you think these stocks are poised to move higher? Use this list as a starting point for your own analysis.

List sorted by increase in revenue over the last year.

  1. Mitcham Industries Inc. (MIND): Engages in the leasing, manufacture, and sale of seismic equipment to the oil and gas industry worldwide. Market cap at $213.82M, most recent closing price at $16.81. PEG at 0.56. Revenue grew by 30.68% during the most recent quarter ($34.63M vs. $26.5M y/y). Inventory grew by 22.24% during the same time period ($6.54M vs. $5.35M y/y). Inventory, as a percentage of current assets, decreased from 10.37% to 10.17% during the most recent quarter (comparing 3 months ending 2012-04-30 to 3 months ending 2011-04-30).
  2. TESSCO Technologies Inc. (TESS): Provides integrated product and supply chain solutions to support the construction, operation, and use of mobility and data wireless systems. Market cap at $149.17M, most recent closing price at $18.60. PEG at 0.63. Revenue grew by 17.68% during the most recent quarter ($192.42M vs. $163.51M y/y). Inventory grew by 11.97% during the same time period ($57.62M vs. $51.46M y/y). Inventory, as a percentage of current assets, decreased from 35.38% to 32.73% during the most recent quarter (comparing 3 months ending 2012-07-01 to 3 months ending 2011-06-26).

  3. Gordmans Stores, Inc. (GMAN): Operates low price department stores under the Gordmans name in the United States. Market cap at $352.4M, most recent closing price at $17.92. PEG at 0.95. Revenue grew by 13.83% during the most recent quarter ($135.86M vs. $119.35M y/y). Inventory grew by 9.44% during the same time period ($75.9M vs. $69.35M y/y). Inventory, as a percentage of current assets, decreased from 63.43% to 54.33% during the most recent quarter (comparing 13 weeks ending 2012-04-28 to 13 weeks ending 2011-04-30).

  4. TravelCenters of America LLC (TA): Operates and franchises travel centers primarily along the United States interstate highway system. Market cap at $159.1M, most recent closing price at $5.53. PEG at 0.44. Revenue grew by 11.94% during the most recent quarter ($1,994.87M vs. $1,782.11M y/y). Inventory grew by 8.75% during the same time period ($165.02M vs. $151.74M y/y). Inventory, as a percentage of current assets, decreased from 36.83% to 33.5% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

  5. PC Connection, Inc. (PCCC): Operates as a direct marketer of various information technology solutions. Market cap at $317.06M, most recent closing price at $12.01. PEG at 0.41. Revenue grew by 5.85% during the most recent quarter ($542.57M vs. $512.56M y/y). Inventory grew by -0.68% during the same time period ($74.92M vs. $75.43M y/y). Inventory, as a percentage of current assets, decreased from 19.71% to 18.61% during the most recent quarter (comparing 3 months ending 2012-06-30 to 3 months ending 2011-06-30).

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

Source: 5 Undervalued Services Stocks With Strong Inventory Trends