Five Value Stocks to Buy as Market Dips
BOSTON (TheStreet) -- Despite last month's dip, the stock-market rally may have another leg. Undervalued shares are the safest way to go until corporate earnings recover. The following five stocks are poised to gain.
5. J.M. Smucker
(LINC) - Get Report
sells jams and jellies.
The numbers
: Fiscal second-quarter net income nearly tripled to $140 million, as earnings per share climbed 26% to $1.18. Revenue grew 52% to $1.3 billion. Smucker's operating margin widened from 11% to 18%. Its 0.3 debt-to-equity ratio indicates modest leverage.
The stock
: J.M. Smucker increased 34% during the past year, beating the
Dow Jones Industrial Average
and
S&P 500 Index
. The stock trades at a price-to-earnings ratio of 17, a discount to food-products peers. The shares offer a 2.3% dividend yield.
4. TreeHouse Foods
(THS) - Get Report
sells pickles and non-dairy coffee creamer.
The numbers
: Third-quarter profit more than doubled to $28 million, or 85 cents a share, as 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 45% 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.
3. Lincoln Educational Services
(LINC) - Get Report
provides career education.
The numbers
: Third-quarter profit more than doubled to $14 million, or 50 cents a share. Revenue rose 48% to $148 million. Lincoln's operating margin stretched from 10% to 16%. The company has an admirable financial position, with $38 million of cash and $37 million of debt.
The stock
: Lincoln Educational Services increased 41% during the past year, beating the Dow and S&P 500. The stock trades at a price-to-earnings ratio of 14, a discount to diversified consumer-services peers. Lincoln doesn't pay dividends.
2. General Mills
(GIS) - Get Report
sells cereal and other food products.
The numbers
: Fiscal second-quarter profit increased 50% to $566 million, or $1.66 a share. Revenue inched up 2% to $4.1 billion. The company's operating margin widened from 12% to 22%. A quick ratio of 0.6 reflects weak liquidity. A 1.1 debt-to-equity ratio indicates sizable leverage.
The stock
: General Mills advanced 20% during the past year, less than major U.S. indices. The stock trades at a price-to-earnings ratio of 15, a discount to food-products peers. The shares offer a 2.7% dividend yield.
1. Church & Dwight
(CHD) - Get Report
sells household products.
The numbers
: Third-quarter profit soared 43% to $70 million, or 98 cents a share. Revenue inched up 2% to $646 million. Church & Dwight's operating margin ascended from 15% to 18%. A quick ratio of 1.1 indicates adequate liquidity. A debt-to-equity ratio of 0.5 reflects conservative leverage.
The stock
: Church & Dwight climbed 11% during the past year, trailing major U.S. indices. The stock trades at a price-to-earnings ratio of 19, a premium to household products peers. The shares offer a 0.9% dividend yield.