5. CONSUMER SERVICES
Top Pick: Kohl's (KSS) operates department stores. Second-quarter profit stretched 13% to $260 million, or 84 cents a share, as revenue grew 7.7% to $4.1 billion. The operating margin inched up to 11%. Kohl's has $2.5 billion of cash and $2 billion of debt, translating to a quick ratio of 0.9 and a debt-to-equity ratio of 0.2. Its stock sells for a trailing earnings multiple of 15, a forward earnings multiple of 13, a book value multiple of 1.9 and a cash flow multiple of 8.8 -- 15%, 28%, 25% and 48% discounts to industry averages. Around 84% of analysts rank it "buy."
Bullish Scenario: Citigroup (C) expects Kohl's shares to gain another 29% to $68.
Three More Top-Ranked Consumer Services Stocks:Wyndham Worldwide (WYN) Omnicom Group (OMC) Interpublic Group (IPG)
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