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
Read Next
