BOSTON ( TheStreet) -- The stock-market rally, which stalled on Friday, may extend this quarter as emerging signs of economic growth produce higher profits. Instead of piling into hot names, investors should consider buying undervalued companies in established industries. The following five stocks are poised to gain.
5. TreeHouse Foods (THS) sells pickles and non-dairy coffee creamer.
The numbers: Third-quarter net income increased 153% to $28 million, and earnings per share climbed 143% to 85 cents. Revenue inched up 1% to $379 million. TreeHouse's operating margin extended from 7% to 8%. A quick ratio of 0.6 indicates poor liquidity. A 0.7 debt-to-equity ratio reflects conservative leverage.
The stock: TreeHouse rose 41% during the past year, outpacing major U.S. indices. The stock trades at a price-to-earnings ratio of 19, a discount to food products peers. TreeHouse doesn't pay dividends.
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