Attractively Priced Consumer Cyclical Stocks With Economic Recovery Momentum

Consumer cyclicals are interesting companies to look at while an economy is recovering. For the most part these companies sell products that are considered luxuries, not necessities. Therefore, their performance is a fairly good lagging indicator of the overall health of the market. As their performance improves, one can expect that the underlying economy has been improving as well. In short, products like brand-name clothing or jewelry tend to perform well when the economy is growing and poorly when it is not. This screen takes a look at some cheap consumer cyclical stocks.

The constraints I used in this stock screen were:

  • Price-to-earnings ratio between 1 and 10
  • Earnings per share 5 year average growth greater than 15%
  • Price-to-earnings growth ratio less than 1.

A low price-to-earnings growth ratio, especially those under 1, tend to mean that the stock is undervalued by the market.  It is calculated as (Price / Earnings ratio) / Annual EPS growth.  Since these stocks have had a 5 year average earnings growth of 15% or more, and yet continue to trade at a price-to-earnings growth under 1, they are more or less unloved by the market.  Yet, all are profitable.  Clearly, the patient and diligent investor can do some digging here and find some value.  These are not momentum, plays however.

  • Aeropostale, Inc. (NYSE:ARO): This stock last closed at $24.32, its 52-week high is $32.24, its 52-week low is $21.26, its recent trading volume is 1,480,000 shares, its market capitalization is $1,994,539,273, its price-to-earnings ratio is 9.7, and its earnings per share are $2.51. Aeropostale, Inc. is a mall-based retailer of casual apparel and accessories that targets young women and men in the pre-teen and teenage market. The Company’s stores provide active-oriented, fashion basic merchandise. Aeropostale operates stores throughout the United States.
  • China Automotive Systems, Inc. (NASDAQ:CAAS): This stock last closed at $8.90, its 52-week high is $25.15, its 52-week low is $7.40, its recent trading volume is 225,630 shares, its market capitalization is $247,296,366, its price-to-earnings ratio is 8.17, and its earnings per share are $1.12. China Automotive Systems, Inc. manufactures power steering systems and other related products for different segments of the automobile industry in China. The Company focuses on parts, accessories, and new technologies. China Automotive is also targeting customers in North America, the Asia-Pacific countries, and the Middle East.
  • Full House Resorts, Inc. (AMEX:FLL): This stock last closed at $3.81, its 52-week high is $5.00, its 52-week low is $2.25, its recent trading volume is 50,440 shares, its market capitalization is $68,249,107, its price-to-earnings ratio is 8.9, and its earnings per share are $0.43. Full House Resorts, Inc. owns, develops and manages gaming facilities. The Company owns a casino in Nevada and through an investment in a joint venture company has a management contract with a casino in Delaware as well as has a management agreement with the Nottawaseppi Huron Band of Potawatomi Indians for the development and management of a casino/resort in Michigan.
  • GameStop Corp. (NYSE:GME): This stock last closed at $22.52, its 52-week high is $25.75, its 52-week low is $17.70, its recent trading volume is 2,800,000 shares, its market capitalization is $3,445,795,755, its price-to-earnings ratio is 8.55, and its earnings per share are $2.66. GameStop Corporation operates specialty electronic game and PC entertainment software stores throughout the United States, Australia, Canada and Europe. The Company stores sell new and used video game hardware, video game software and accessories, as well as PC entertainment software, and related accessories and other merchandise. Video Game Analyst: GameStop Gives Shareholders Optimism>>
  • LJ International, Inc. (NASDAQ:JADE): This stock last closed at $3.94, its 52-week high is $5.68, its 52-week low is $2.30, its recent trading volume is 314,520 shares, its market capitalization is $117,173,824, its price-to-earnings ratio is 8.32, and its earnings per share are $0.48. LJ International Inc. designs and markets semi-precious gemstones. The Company also manufactures gold, platinum, and silver jewelry products such as rings, necklaces, bracelets, pendants, and complete jewelry sets.
  • Sorl Auto Parts, Inc. (NASDAQ:SORL): This stock last closed at $6.06, its 52-week high is $11.55, its 52-week low is $5.07, its recent trading volume is 85,630 shares, its market capitalization is $113,030,307, its price-to-earnings ratio is 5.53, and its earnings per share are $1.06. SORL Auto Parts, Inc. manufactures and distributes automotive air brake valves and hydraulic brake valves. The Company’s products are primarily for the commercial vehicles market in China. SORL distributes products both in China and internationally under SORL trademarks.
  • TRW Automotive Holdings Corp. (NYSE:TRW): This stock last closed at $55.08, its 52-week high is $63.26, its 52-week low is $24.60, its recent trading volume is 1,320,000 shares, its market capitalization is $6,785,078,428, its price-to-earnings ratio is 8.53, and its earnings per share are $6.49. TRW Automotive Holdings Corp. supplies automotive systems, modules, and components to global automotive vehicle manufacturers and related aftermarkets. The Company’s products include active and passive safety related products. TRW’s products are primarily used in the manufacture of light vehicles.
  • Valassis Communications, Inc. (NYSE:VCI): This stock last closed at $29.14, its 52-week high is $38.43, its 52-week low is $27.00, its recent trading volume is 439,470 shares, its market capitalization is $1,497,362,334, its price-to-earnings ratio is 3.97, and its earnings per share are $7.46. Valassis Communications, Inc. is a media and marketing services company serving a wide range of industries. The Company and its subsidiaries offer products and services to mass or targeted audiences by mail, in newspapers and stores, and online. Valassis also offers coupon redemption and management; promotion and sweepstakes security; and frequent shopper data collection and analysis.
  • Wonder Auto Technology, Inc. (NASDAQ:WATG): This stock last closed at $5.42, its 52-week high is $12.77, its 52-week low is $5.20, its recent trading volume is 348,570 shares, its market capitalization is $178,442,147, its price-to-earnings ratio is 5.79, and its earnings per share are $0.91. Wonder Auto Technology, Inc., through a subsidiary, designs, develops, manufactures and sells automobile alternators and starters and other automotive electrical parts.
  • Xinyuan Real Estate Co., Ltd. (ADR) (NYSE:XIN): This stock last closed at $2.35, its 52-week high is $4.17, its 52-week low is $2.20, its recent trading volume is 170,320 shares, its market capitalization is $89,496,058, its price-to-earnings ratio is 3.57, and its earnings per share are $0.66. Xinyuan Real Estate Company, Ltd. is a residential real estate developer that focuses on Tier II cities in China. The Company develops large scale residential projects that includes multi-layer buildings, sub-high apartment buildings, hospitals, schools, and others. Xinyuan also develops small scale properties as well.

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