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Five Value Stocks That Defy Market Decline

TreeHouse Foods, Lincoln Educational Services, DaVita, Church & Dwight and General Mills are rated 'buy.'
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BOSTON (TheStreet) -- Investors who want to increase their equity exposure on the stock-market pullback should seek cheap shares. The following five stocks are poised to gain.

5. TreeHouse Foods

(THS) - Get Report

sells pickles and non-dairy coffee creamer. The company is scheduled to report fourth-quarter results on Thursday.

The numbers

: Third-quarter profit more than doubled to $28 million, or 85 cents a share, as revenue inched up 1.1% to $379 million. TreeHouse's operating margin extended from 6.6% to 8.1%. A quick ratio of 0.6 indicates poor liquidity. A 0.7 debt-to-equity ratio reflects moderate leverage.

The stock

: TreeHouse rose 42% 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.

4. 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, as revenue grew 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 21% during the past year, less than major U.S. indices. The stock trades at a price-to-earnings ratio of 13, a discount to diversified consumer-services peers. Lincoln doesn't pay dividends.

3. DaVita

(DVA) - Get Report

operates dialysis centers. The company is scheduled to report fourth-quarter results on Wednesday.

The numbers

TheStreet Recommends

: Third-quarter profit increased 18% to $111 million, or $1.06 a share, as revenue rose 8.8% to $1.6 billion. DaVita's operating margin inched up from 15% to 16%. The company holds $602 million of cash, equating to a quick ratio of 1.8. Its 1.8 debt-to-equity ratio reflects a hefty debt burden.

The stock

: DaVita appreciated 25% during the past year, matching the

S&P 500 Index

. The stock trades at a price-to-earnings ratio of 15, a discount to health-care-services peers. DaVita doesn't pay dividends.

2. Church & Dwight

(CHD) - Get Report

sells household products. The company is scheduled to report fourth-quarter results tomorrow.

The numbers

: Third-quarter profit soared 43% to $70 million, or 98 cents a share, as 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 demonstrates conservative leverage.

The stock

: Church & Dwight climbed 16% 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.

1. 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, as 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 a debt-heavy capital structure.

The stock

: General Mills advanced 16% during the past year, less than major U.S. indices. The stock trades at a price-to-earnings ratio of 14, a discount to food products peers. The shares offer a 2.9% dividend yield.

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