Nine Undervalued Consumer Goods Stocks

Jacob Harper  |

Consumer goods is a rapidly changing sector, with retail commerce slowly but surely migrating from brick-and-mortar storefronts to the internet. Even though the industry is changing rapidly, and retailers slow to adapt like Express Inc. (EXPR) are suffering mightily, retail is far from dead. And it’s not just early internet pioneers like Amazon Inc. (AMZN) that have reaped the benefits.

We decided to find the consumer goods plays that sported the solid fundamentals through the ongoing change in the industry.

METHODOLOGY

We went looking for small-cap consumer goods companies that sported the following attributes:

Current Ratio Higher Than 1.5  

Consumer goods is a cyclical and fickle industry, so it’s important for a successful company to have significant amounts of cash on hand relative to their liabilities.

Return on Assets Greater than 15 Percent

Also referred to as ROI, a high Return on Assets shows the company is making income out of its invested capital. Consumer goods depends many times on product differentiation, and a high ROA can show the product is moving well.

Gross Margin Higher than 10 Percent 

Using only profit margin as a barometer eliminates too many good companies. The industry is extremely competitive, so the profit margins are whittled down. Gross margin is a better tool in this case. 

FINDINGS

We found nine small-cap consumer goods plays that fit the bill. They are:

Annie’s, Inc. (BNNY)

Market Cap: $668.64 million

Price: $39.49

P/E: 47.01

2014 YTD Performance: -8.25 percent

Dean Food Company (DF)

Market Cap: $1.42 billion

Price: $14.97

P/E: 4.50

2014 YTD Performance: -12.91 percent

National Beverage Corp. (FIZZ)

Market Cap: $998.90 million

Price: $21.56

P/E: 23.18

2014 YTD Performance: +6.94 percent

Fox Factory Holding Corp (FOXF)

Market Cap: $582.62 million

Price: $16.64

P/E: 28.20

2014 YTD Performance:-5.56 percent

Federal Sign Corp. (FSS)

Market Cap: $912.08 million

Price: $14.57

P/E: 6.62

2014 YTD Performance: -0.55 percent

(note: FSS is also an Equities.com Small-Cap Star)

Inter Parfums Inc. (IPAR)

Market Cap: $1.02 billion

Price: $33.00

P/E: 7.13

2014 YTD Performance: -7.85 percent

LeapFrog Enterprises Inc. (LF)

Market Cap: $513.64 million

Price: $7.44

P/E: 6.31

2014 YTD Performance: -6.30 percent

Sanderson Farms Inc. (SAFM)

Market Cap: $1.72 billion

Price: $76.70

P/E: 10.61

2014 YTD Performance: +6.34 percent

Vera Bradley Inc. (VRA)

Market Cap: $1.14 billion

Price: $28.14

P/E: 17.70

2014 YTD Performance: +17.05 percent

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
LF LeapFrog Enterprises Inc n/a n/a n/a 0 Trade
DF Dean Foods Company 4.79 0.13 2.79 873,169 Trade
SAFM Sanderson Farms Inc. 121.10 0.64 0.53 303,062 Trade
FSS Federal Signal Corporation 22.63 0.74 3.38 305,618 Trade
VRA Vera Bradley Inc. 9.25 0.17 1.87 143,690 Trade
FOXF Fox Factory Holding Corp. 61.16 1.30 2.17 890,337 Trade
FIZZ National Beverage Corp. 75.10 1.50 2.04 246,571 Trade
IPAR Inter Parfums Inc. 70.69 0.39 0.55 65,518 Trade
SGLB Sigma Labs Inc. 2.22 0.02 0.68 55,107 Trade

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