Five Cheap Stocks on the Rise - TheStreet

BOSTON (TheStreet) -- The stock rally has made cheap stocks harder to find, but here are five companies whose shares are positioned to gain.

5. W.W. Grainger (GWW) - Get Report sells facility maintenance products.

The numbers: Third-quarter net income increased 3% to $145 million, or $1.88 a share. Revenue fell 14% to $1.6 billion. Grainger's gross margin was unchanged at 42%, but its operating margin narrowed from 13% to 12%. The company has a strong financial position, with $672 million of cash and $535 million of debt.

The stock: Grainger has risen 24% this year, beating the Dow Jones Industrial Average and S&P 500. The stock trades at a price-to-earnings ratio of 17, a discount to the market and distributor peers. The shares have a 1.9% dividend yield. #44. J.M. Smucker (SJM) - Get Report sells jams and jellies.

The numbers: Fiscal second-quarter net income almost tripled to $140 million as earnings per share climbed 26% to $1.18, hurt by a higher share count. Revenue grew 52% to $1.3 billion. J.M. Smucker's gross margin rose from 31% to 39%, and its operating margin jumped from 11% to 18%. Its balance sheet is liquid, with $410 million of cash. A debt-to-equity ratio of 0.3 indicates modest leverage.

The stock: J.M. Smucker has risen 40% this year, beating major U.S. indices. The stock trades at a price-to-earnings ratio of 18, a discount to the market and packaged food peers. The shares have a 2.3% dividend yield. #33. Dollar Tree (DLTR) - Get Report operates discount variety stores.

The numbers: Fiscal third-quarter net income increased 58% to $68 million, or 76 cents a share. Revenue grew 12% to $1.2 billion. Dollar Tree's gross margin remained steady at 38%, but its operating margin expanded from 6% to 9%. The company holds $342 million of cash and $268 million of debt.

The stock: Dollar Tree has advanced 16% this year, less than major U.S. indices. The stock trades at a price-to-earnings ratio of 15, a discount to the market and competing retailers. Dollar Tree doesn't pay dividends.#22. 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 gross margin rose from 63% to 65%, and its operating margin increased from 10% to 16%. The company has a strong financial position, with $38 million of cash and $37 million of debt.

The stock: Lincoln has advanced 60% this year, beating major U.S. indices. The stock trades at a price-to-earnings ratio of 14, a discount to the market and education peers. Lincoln doesn't pay dividends. #11. 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 gross margin rose from 43% to 49%, and its operating margin widened 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 has risen 8% this year, lagging behind major U.S. indices. The stock trades at a price-to-earnings ratio of 18, a discount to the market, but on par with household products peers. The shares have a 0.9% dividend yield.

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