3. Hawkins (HWKN) makes and sells bulk and specialty chemicals. Its fiscal second-quarter profit inched up 2.5% to $6.8 million, or 66 cents a share, as revenue expanded 8.3% to $70 million. The operating margin contracted from 17% to 16%. Hawkins has $60 million of cash, equal to a quick ratio of 2.8, and no debt. Hawkins shares sell for a trailing earnings multiple of 16, a forward earnings multiple of 15, a book value multiple of 3, a sales multiple of 1.5 and a cash flow multiple of 14, 40%, 19%, 19%, 42% and 21% discounts to chemicals industry averages.
Expected Return: The model values Hawkins at $50.65, suggesting a 12-month return of 26%.