Do you consider yourself a value investor? For a closer look at potentially undervalued stocks from the consumer good industry, we ran a screen.
We screened the consumer industry for stocks that may be undervalued, by comparing price trends to changes in EPS estimates over the last month.
Based on the assumption that P/E is equal to a constant k, increases in EPS should be matched by increases in price. When they don't match up, a mispricing may have occurred. We screened for stocks with faster growth in EPS estimates than price over the last month, which may indicate that these names are being undervalued.
Next, we screened for names that are currently showing signs of upward momentum by trading above their 20, 50 and 200-day moving averages. The trend indicates these stocks have strong upward momentum. Considering they are still undervalued to their EPS estimates, it may be that their rally is not yet finished.
For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.
Tool provided by Kapitall.
Do you think these stocks should be trading higher? Use this list as a starting point for your own analysis.
List sorted by increase in EPS estimate over the last year.
1. Cosan Ltd. (CZZ): Engages in the production and sale of sugar and ethanol products. Market cap at $4.08B, most recent closing price at $15.07. Shares are rallying 7.93% above its 20-day moving average, 15.13% above its 5-day moving average, and 20.92% above its 200-day moving average.
The EPS estimate for the company's current year increased from 0.83 to 0.89 over the last 30 days, an increase of 7.23%. This increase came during a time when the stock price changed by 6.63% (from 14.18 to 15.12 over the last 30 days).
2. Federal Signal Corp. (FSS): Designs and manufactures a suite of products and integrated solutions for municipal, governmental, industrial, and commercial customers worldwide. Market cap at $388.44M, most recent closing price at $6.23. Shares are rallying 0.06% above its 20-day moving average, 4.64% above its 5-day moving average, and 22.25% above its 200-day moving average.
The EPS estimate for the company's current year increased from 0.33 to 0.37 over the last 30 days, an increase of 12.12%. This increase came during a time when the stock price changed by 9.6% (from 5.94 to 6.51 over the last 30 days).
*EPS data sourced from Yahoo! Finance, all other data sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.