The "rolling bear market" has left few stocks "unscathed" this year, but the consumer discretionary sector seemed to be the "last man standing" of the 10 S&P 500 sectors, according to MKM Partners.

"The interesting dynamic is that while Consumer Discretionary is still the best sector year-to-date (+10.29%), nearly half of the S&P 1500 Discretionary sector is down at least 20% from its 52-week high," MKM Partners chief market technician Jonathan Krinsky wrote in a technical note to clients. "In many ways, that is a microcosm for the overall market, in which the equal weight S&P 500 just hit a fresh 2.5 year low vs. the SPX. So to that we say: 'Welcome to the Jungle', as the thick cover of leaves may be hiding some dangers still lurking."

In the note, Krinsky highlighted 15 "sell ideas" within the consumer discretionary sector. He also named four stocks to buy, across sectors. 

"While names like Amazon, Home Depot, Starbucks and Nike have boosted the Cap-Weighted Discretionary Index above Staples, an equal-weight look shows that Consumer Discretionary is actually underperforming Staples. While it is nothing like we saw in late 2007, it is noteworthy, in our view," he further wrote. "While we continue to think the overall 'market' has limited upside potential in the near-term, we can always find stocks that we feel will at least work on a relative basis, if not an absolute basis."

Here's MKM Partner's list, along with ratings from TheStreet Ratings for additional perspective.

TheStreet Ratings uses a quantitative approach to rating over 4,300 stocks to predict return potential for the next year. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings.

Buying an S&P 500 stock that TheStreet Ratings rated a "buy" yielded a 16.56% return in 2014 beating the S&P 500 Total Return Index by 304 basis points. Buying a Russell 2000 stock that TheStreet Ratings rated a "buy" yielded a 9.5% return in 2014, beating the Russell 2000 index, including dividends reinvested, by 460 basis points last year.

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1. Bob Evans Farms Inc. (BOBE)
Industry: Consumer Goods & Services/Restaurants
Year-to-date return: -15.7%

Bob Evans Farms, Inc. owns and operates full-service restaurants under the Bob Evans Restaurants brand name in the United States. The company conducts its operations through Bob Evans Restaurants and BEF Foods segments.

TheStreet Said: TheStreet Ratings team rates BOB EVANS FARMS as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

We rate BOB EVANS FARMS (BOBE) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in net income, good cash flow from operations and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and poor profit margins.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 521.3% when compared to the same quarter one year prior, rising from -$1.02 million to $4.28 million.
  • Net operating cash flow has significantly increased by 107.86% to $40.15 million when compared to the same quarter last year. In addition, BOB EVANS FARMS has also vastly surpassed the industry average cash flow growth rate of -59.32%.
  • BOB EVANS FARMS reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BOB EVANS FARMS reported lower earnings of $0.70 versus $1.18 in the prior year. This year, the market expects an improvement in earnings ($1.94 versus $0.70).
  • Currently the debt-to-equity ratio of 1.52 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with this, the company manages to maintain a quick ratio of 0.29, which clearly demonstrates the inability to cover short-term cash needs.
  • BOBE has underperformed the S&P 500 Index, declining 10.65% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
  • You can view the full analysis from the report here: BOBE

 

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2. Carter's Inc. (CRI - Get Report)
Industry: Consumer Goods & Services/Apparel, Accessories & Luxury Goods
Year-to-date return: 0.21%

Carter's, Inc. and its subsidiaries design, source, and market branded childrenswear under the Carter's, Child of Mine, Just One You, Precious Firsts, OshKosh, and other brands.

TheStreet Said: TheStreet Ratings team rates CARTER'S INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate CARTER'S INC (CRI) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • CARTER'S INC has improved earnings per share by 41.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CARTER'S INC increased its bottom line by earning $3.63 versus $2.77 in the prior year. This year, the market expects an improvement in earnings ($4.56 versus $3.63).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Textiles, Apparel & Luxury Goods industry average. The net income increased by 39.4% when compared to the same quarter one year prior, rising from $25.90 million to $36.11 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 14.5%. Since the same quarter one year prior, revenues slightly increased by 6.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market, CARTER'S INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • You can view the full analysis from the report here: CRI

 

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3. Dollar General Corp. (DG - Get Report)
Industry: Consumer Goods & Services/General Merchandise Stores
Year-to-date return: -7%

Dollar General Corporation, a discount retailer, provides various merchandise products in the southern, southwestern, midwestern, and eastern United States.

TheStreet Said: TheStreet Ratings team rates DOLLAR GENERAL CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

We rate DOLLAR GENERAL CORP (DG) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, notable return on equity and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • DG's revenue growth has slightly outpaced the industry average of 7.5%. Since the same quarter one year prior, revenues slightly increased by 7.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • DOLLAR GENERAL CORP has improved earnings per share by 14.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DOLLAR GENERAL CORP increased its bottom line by earning $3.50 versus $3.17 in the prior year. This year, the market expects an improvement in earnings ($3.93 versus $3.50).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Multiline Retail industry and the overall market, DOLLAR GENERAL CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • The current debt-to-equity ratio, 0.53, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.09 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • You can view the full analysis from the report here: DG

 

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4. DineEquity Inc. (DIN - Get Report)
Industry: Consumer Goods & Services/Restaurants
Year-to-date return: -16%

DineEquity, Inc., together with its subsidiaries, owns, franchises, and operates full-service restaurants in the United States and internationally.

TheStreet Said: TheStreet Ratings team rates DINEEQUITY INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

We rate DINEEQUITY INC (DIN) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and disappointing return on equity.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • DIN's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 6.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 40.3% when compared to the same quarter one year prior, rising from $19.17 million to $26.90 million.
  • DINEEQUITY INC has improved earnings per share by 40.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, DINEEQUITY INC reported lower earnings of $1.89 versus $3.71 in the prior year. This year, the market expects an improvement in earnings ($5.87 versus $1.89).
  • The debt-to-equity ratio is very high at 5.16 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, DIN's quick ratio is somewhat strong at 1.08, demonstrating the ability to handle short-term liquidity needs.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market on the basis of return on equity, DINEEQUITY INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • You can view the full analysis from the report here: DIN

 

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5. Dollar Tree Inc. (DLTR - Get Report)
Industry: Consumer Goods & Services/General Merchandise Stores
Year-to-date return: -11.1%

Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise at the fixed price of $1.00.

TheStreet Said: TheStreet Ratings team rates DOLLAR TREE INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

We rate DOLLAR TREE INC (DLTR) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 7.5%. Since the same quarter one year prior, revenues rose by 48.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • DOLLAR TREE INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, DOLLAR TREE INC increased its bottom line by earning $2.90 versus $2.75 in the prior year. For the next year, the market is expecting a contraction of 3.1% in earnings ($2.81 versus $2.90).
  • The gross profit margin for DOLLAR TREE INC is currently lower than what is desirable, coming in at 31.37%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -3.25% trails that of the industry average.
  • Net operating cash flow has significantly decreased to -$175.50 million or 205.02% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • You can view the full analysis from the report here: DLTR

 

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6. Domino's Pizza Inc. (DPZ - Get Report)
Industry: Consumer Goods & Services/Restaurants
Year-to-date return: 10.5%

Domino's Pizza, Inc., through its subsidiaries, operates as a pizza delivery company in the United States and internationally. The company operates through three segments: Domestic Stores, Supply Chain, and International Franchise.

TheStreet Said: TheStreet Ratings team rates DOMINO'S PIZZA INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

We rate DOMINO'S PIZZA INC (DPZ) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, growth in earnings per share, increase in net income and solid stock price performance. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • DPZ's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 8.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • DOMINO'S PIZZA INC has improved earnings per share by 6.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DOMINO'S PIZZA INC increased its bottom line by earning $2.86 versus $2.47 in the prior year. This year, the market expects an improvement in earnings ($3.46 versus $2.86).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Hotels, Restaurants & Leisure industry average. The net income increased by 6.2% when compared to the same quarter one year prior, going from $35.62 million to $37.83 million.
  • Net operating cash flow has slightly increased to $63.71 million or 9.67% when compared to the same quarter last year. In addition, DOMINO'S PIZZA INC has also vastly surpassed the industry average cash flow growth rate of -59.32%.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • You can view the full analysis from the report here: DPZ

 

 

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7. Brinker International Inc. (EAT - Get Report)
Industry: Consumer Goods & Services/Restaurants
Year-to-date return: -20.2%

Brinker International, Inc., together with its subsidiaries, engages in the ownership, development, operation, and franchise of casual dining restaurants worldwide.

TheStreet Said: TheStreet Ratings team rates BRINKER INTL INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

We rate BRINKER INTL INC (EAT) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share and increase in net income. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • EAT's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 7.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • BRINKER INTL INC has improved earnings per share by 10.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, BRINKER INTL INC increased its bottom line by earning $3.07 versus $2.25 in the prior year. This year, the market expects an improvement in earnings ($3.60 versus $3.07).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Hotels, Restaurants & Leisure industry average. The net income increased by 1.4% when compared to the same quarter one year prior, going from $32.74 million to $33.21 million.
  • In its most recent trading session, EAT has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
  • Net operating cash flow has decreased to $45.55 million or 35.75% when compared to the same quarter last year. Despite a decrease in cash flow BRINKER INTL INC is still fairing well by exceeding its industry average cash flow growth rate of -59.32%.
  • You can view the full analysis from the report here: EAT

 

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8. Fiesta Restaurant Group Inc. (FRGI - Get Report)
Industry: Consumer Goods & Services/Restaurants
Year-to-date return: -34%

Fiesta Restaurant Group, Inc., through its subsidiaries, owns, operates, and franchises fast-casual restaurants. It operates its fast-casual restaurants under the Pollo Tropical and Taco Cabana brand name.

TheStreet Said: TheStreet Ratings team rates FIESTA RESTAURANT GROUP INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate FIESTA RESTAURANT GROUP INC (FRGI) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, reasonable valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 0.5%. Since the same quarter one year prior, revenues rose by 11.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • FIESTA RESTAURANT GROUP INC has improved earnings per share by 20.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, FIESTA RESTAURANT GROUP INC increased its bottom line by earning $1.35 versus $0.40 in the prior year. This year, the market expects an improvement in earnings ($1.62 versus $1.35).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Hotels, Restaurants & Leisure industry average. The net income increased by 20.8% when compared to the same quarter one year prior, going from $9.31 million to $11.25 million.
  • Net operating cash flow has increased to $21.38 million or 12.24% when compared to the same quarter last year. In addition, FIESTA RESTAURANT GROUP INC has also vastly surpassed the industry average cash flow growth rate of -59.32%.
  • You can view the full analysis from the report here: FRGI

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9. Hanesbrands Inc. (HBI - Get Report)
Industry: Consumer Goods & Services/Apparel, Accessories & Luxury Goods
Year-to-date return: -3%

Hanesbrands Inc., a consumer goods company, designs, manufactures, sources, and sells a range of basic apparels for men, women, and children in the United States. The company operates through four segments: Innerwear, Activewear, Direct to Consumer, and International.

TheStreet Said: TheStreet Ratings team rates HANESBRANDS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

We rate HANESBRANDS INC (HBI) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, increase in stock price during the past year and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 14.5%. Since the same quarter one year prior, revenues rose by 13.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • 40.78% is the gross profit margin for HANESBRANDS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.23% trails the industry average.
  • HANESBRANDS INC's earnings per share declined by 39.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HANESBRANDS INC increased its bottom line by earning $0.99 versus $0.81 in the prior year. This year, the market expects an improvement in earnings ($1.64 versus $0.99).
  • After a year of stock price fluctuations, the net result is that HBI's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market, HANESBRANDS INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • You can view the full analysis from the report here: HBI

 

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10. Jack in the Box Inc. (JACK - Get Report)
Industry: Consumer Goods & Services/Restaurants
Year-to-date return: -6.5%

Jack in the Box Inc. operates and franchises Jack in the Box quick-service restaurants and Qdoba Mexican Grill fast-casual restaurants in the United States.

TheStreet Said: TheStreet Ratings team rates JACK IN THE BOX INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate JACK IN THE BOX INC (JACK) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, good cash flow from operations, impressive record of earnings per share growth and increase in net income. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • JACK's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 3.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • JACK IN THE BOX INC has improved earnings per share by 17.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, JACK IN THE BOX INC increased its bottom line by earning $2.26 versus $1.84 in the prior year. This year, the market expects an improvement in earnings ($3.02 versus $2.26).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Hotels, Restaurants & Leisure industry average. The net income increased by 8.6% when compared to the same quarter one year prior, going from $24.70 million to $26.83 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, JACK IN THE BOX INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $74.23 million or 17.87% when compared to the same quarter last year. In addition, JACK IN THE BOX INC has also vastly surpassed the industry average cash flow growth rate of -59.32%.
  • You can view the full analysis from the report here: JACK

 

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11. Jarden Corp. (JAH)
Industry: Consumer Goods & Services/Housewares & Specialties
Year-to-date return: -2.9%

Jarden Corporation manufactures, markets, and distributes consumer products worldwide.

TheStreet Said: TheStreet Ratings team rates JARDEN CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

We rate JARDEN CORP (JAH) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, compelling growth in net income, revenue growth, solid stock price performance and reasonable valuation levels. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • JARDEN CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, JARDEN CORP increased its bottom line by earning $1.29 versus $1.21 in the prior year. This year, the market expects an improvement in earnings ($2.76 versus $1.29).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Household Durables industry. The net income increased by 64.9% when compared to the same quarter one year prior, rising from $52.10 million to $85.90 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.0%. Since the same quarter one year prior, revenues slightly increased by 1.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • You can view the full analysis from the report here: JAH

 

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12. Nordstrom Inc. (JWN - Get Report)
Industry: Consumer Goods & Services/Department Stores
Year-to-date return: -18.1%

Nordstrom, Inc., a fashion specialty retailer, offers apparel, shoes, cosmetics, and accessories for men, women, and children in the United States and Canada. It operates through two segments, Retail and Credit.

TheStreet Said: TheStreet Ratings team rates NORDSTROM INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate NORDSTROM INC (JWN) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, growth in earnings per share, expanding profit margins and increase in net income. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • JWN's revenue growth has slightly outpaced the industry average of 7.5%. Since the same quarter one year prior, revenues slightly increased by 9.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has increased to $207.00 million or 36.18% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 6.53%.
  • NORDSTROM INC has improved earnings per share by 14.7% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, NORDSTROM INC's EPS of $3.72 remained unchanged from the prior years' EPS of $3.72. This year, the market expects an improvement in earnings ($3.78 versus $3.72).
  • 40.91% is the gross profit margin for NORDSTROM INC which we consider to be strong. Regardless of JWN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, JWN's net profit margin of 5.70% compares favorably to the industry average.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Multiline Retail industry and the overall market, NORDSTROM INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • You can view the full analysis from the report here: JWN

 

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13. Overstock.com (OSTK - Get Report)
Industry: Consumer Goods & Services/Internet Retail
Year-to-date return: -33%

Overstock.com Inc. operates as an online retailer primarily in the United States. It operates through two segments, Direct and Partner.

TheStreet Said: TheStreet Ratings team rates OVERSTOCK.COM INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

We rate OVERSTOCK.COM INC (OSTK) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • OSTK's revenue growth trails the industry average of 46.3%. Since the same quarter one year prior, revenues rose by 16.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • OSTK's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that OSTK's debt-to-equity ratio is low, the quick ratio, which is currently 0.67, displays a potential problem in covering short-term cash needs.
  • OVERSTOCK.COM INC's earnings per share declined by 12.5% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, OVERSTOCK.COM INC reported lower earnings of $0.37 versus $3.62 in the prior year. This year, the market expects an improvement in earnings ($0.61 versus $0.37).
  • The gross profit margin for OVERSTOCK.COM INC is rather low; currently it is at 19.00%. Regardless of OSTK's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 0.42% trails the industry average.
  • You can view the full analysis from the report here: OSTK

 

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14. Tilly's Inc. (TLYS - Get Report)
Industry: Consumer Goods & Services/Apparel Retail
Year-to-date return: -24.9%

Tilly's, Inc. retails casual clothing, footwear, and accessories for teens and young adults in the United States.

TheStreet Said: TheStreet Ratings team rates TILLY'S INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

We rate TILLY'S INC (TLYS) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, unimpressive growth in net income and disappointing return on equity.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.8%. Since the same quarter one year prior, revenues slightly increased by 5.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • TLYS's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.17, which illustrates the ability to avoid short-term cash problems.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The gross profit margin for TILLY'S INC is currently lower than what is desirable, coming in at 32.49%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.43% trails that of the industry average.
  • Net operating cash flow has significantly decreased to $3.63 million or 68.78% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • You can view the full analysis from the report here: TLYS

 

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15. Williams-Sonoma Inc. (WSM - Get Report)
Industry: Consumer Goods & Services/Homefurnishing Retail
Year-to-date return: -4.8%

Williams-Sonoma Inc. operates as a multi-channel specialty retailer of home products. The company operates in two segments, E-commerce and Retail.

TheStreet Said: TheStreet Ratings team rates WILLIAMS-SONOMA INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

We rate WILLIAMS-SONOMA INC (WSM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, revenue growth, reasonable valuation levels and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • WILLIAMS-SONOMA INC has improved earnings per share by 9.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, WILLIAMS-SONOMA INC increased its bottom line by earning $3.26 versus $2.85 in the prior year. This year, the market expects an improvement in earnings ($3.45 versus $3.26).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Specialty Retail industry average. The net income increased by 5.8% when compared to the same quarter one year prior, going from $50.75 million to $53.67 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.8%. Since the same quarter one year prior, revenues slightly increased by 8.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has increased to $103.88 million or 28.96% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -10.77%.
  • You can view the full analysis from the report here: WSM

 

Here are four stocks to buy instead, according to MKM Partners. Note: Not all of these stocks are consumer discretionary stocks.

 

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1. Cisco Systems Inc. (CSCO - Get Report)
Industry: Technology/Communications Equipment
Year-to-date return: 5.5%

Cisco Systems, Inc. designs, manufactures, and sells Internet Protocol (IP) based networking products and services related to the communications and information technology industry worldwide.

TheStreet Said: TheStreet Ratings team rates CISCO SYSTEMS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

We rate CISCO SYSTEMS INC (CSCO) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, attractive valuation levels and solid stock price performance. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 10.4%. Since the same quarter one year prior, revenues slightly increased by 3.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.42, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 2.97, which clearly demonstrates the ability to cover short-term cash needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Communications Equipment industry and the overall market, CISCO SYSTEMS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • You can view the full analysis from the report here: CSCO

 

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2. Priceline Group Inc. (PCLN)
Industry: Consumer Goods & Services/Internet Retail
Year-to-date return: 19.9%

The Priceline Group Inc. provides online travel and travel related reservation and search service.

TheStreet Said: TheStreet Ratings team rates PRICELINE GROUP INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

We rate PRICELINE GROUP INC (PCLN) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth significantly trails the industry average of 46.3%. Since the same quarter one year prior, revenues slightly increased by 7.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.63, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, PCLN has a quick ratio of 2.11, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Internet & Catalog Retail industry and the overall market, PRICELINE GROUP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for PRICELINE GROUP INC is currently very high, coming in at 91.78%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 22.67% significantly outperformed against the industry average.
  • Net operating cash flow has slightly increased to $702.38 million or 1.79% when compared to the same quarter last year. Despite an increase in cash flow of 1.79%, PRICELINE GROUP INC is still growing at a significantly lower rate than the industry average of 53.27%.
  • You can view the full analysis from the report here: PCLN

 

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3. Nielsen Holdings Plc (NLSN - Get Report)
Industry: Industrials/Research & Consulting Services
Year-to-date return: 8%

Nielsen Holdings plc operates as an information and measurement company. The company provides media and marketing information, analytics, and manufacturer and retailer expertise about what and where consumers buy, read, watch, and listen.

TheStreet Said: TheStreet Ratings team rates NIELSEN HOLDINGS NV as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

We rate NIELSEN HOLDINGS NV (NLSN) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, expanding profit margins, good cash flow from operations, solid stock price performance and impressive record of earnings per share growth. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Professional Services industry. The net income increased by 56.0% when compared to the same quarter one year prior, rising from $91.00 million to $142.00 million.
  • The gross profit margin for NIELSEN HOLDINGS NV is rather high; currently it is at 59.83%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 9.27% is above that of the industry average.
  • Net operating cash flow has increased to $452.00 million or 15.30% when compared to the same quarter last year. Despite an increase in cash flow, NIELSEN HOLDINGS NV's average is still marginally south of the industry average growth rate of 18.51%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • NIELSEN HOLDINGS NV reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NIELSEN HOLDINGS NV reported lower earnings of $1.00 versus $1.13 in the prior year. This year, the market expects an improvement in earnings ($2.62 versus $1.00).
  • You can view the full analysis from the report here: NLSN

 

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4. Vonage Holdings Corp. (VG - Get Report)
Industry: Telecom/Alternative Carriers
Year-to-date return: 63.8%

Vonage Holdings Corp. provides unified communications as a service solutions connecting people through cloud-connected devices worldwide.

TheStreet Said: TheStreet Ratings team rates VONAGE HOLDINGS CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate VONAGE HOLDINGS CORP (VG) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • VG's revenue growth has slightly outpaced the industry average of 0.3%. Since the same quarter one year prior, revenues slightly increased by 1.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Telecommunication Services industry. The net income increased by 51.3% when compared to the same quarter one year prior, rising from $5.52 million to $8.35 million.
  • Net operating cash flow has increased to $35.24 million or 46.32% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 4.52%.
  • The current debt-to-equity ratio, 0.48, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that VG's debt-to-equity ratio is low, the quick ratio, which is currently 0.50, displays a potential problem in covering short-term cash needs.
  • Powered by its strong earnings growth of 33.33% and other important driving factors, this stock has surged by 86.85% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • You can view the full analysis from the report here: VG