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TheStreet Open House

Five Cheap Stocks Ready to Rally

Stocks in this article: THSVLGEACHD

BOSTON ( TheStreet) -- Investors who expect the market to rally next quarter should look for cheap stocks to buy now. Here are five undervalued companies to consider.

5. W.W. Grainger (GWW) sells industrial supplies and equipment.

The numbers: Third-quarter net income increased 3% to $145 million, or $1.88 a share, as revenue fell 14% to $1.6 billion. Grainger's gross margin was unchanged at 42%, but its operating margin declined from 13% to 12%. The company has a strong financial position, with $672 million of cash and $535 million of debt.

The stock: Grainger has risen 22% this year, more than the Dow Jones Industrial Average and S&P 500 Index. The stock trades at a price-to-earnings ratio of 17, a discount to the market and distribution peers. The shares offer a 1.9% dividend yield.

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DOW 16,805.41 +127.51 0.76%
S&P 500 1,964.58 +13.76 0.71%
NASDAQ 4,483.7150 +30.9230 0.69%

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