The American Indices S&P 500 and NASDAQ ended Monday at their all time highs signalling that expansion in the U.S. economy is underway as stock market index is deemed to be one of the leading economic indicators. Improved corporate earnings and several positive economic data points from the U.S. last week also confirmed the economy is expanding.
With equity indices trading at new highs, we have shortlisted 12 U.S. stocks across sectors with beta of more than 1 which exhibit strong cyclicality and also appear to be undervalued offering an attractive choice of investment. We note that these stocks are currently trading at relatively low forward Price-to-Earning (P/E) with relatively low PEG ratio, which are considered attractive investment metrics from a valuation standpoint. Moreover, these stocks are estimated to register strong earnings growth during 2014 and provide high return on equity (ROE). Meanwhile, these stocks are rated a ‘Buy’ by a majority of the analysts covering these stocks with consensus 12-month price targets indicating significant upside potential up to 60% from current levels, according to consensus estimates provided by Bloomberg.
|
Company Name |
Exchange |
Ticker |
Market Cap |
Last Price |
Average Volume |
Price Change |
EPS Growth (2014E) |
Current PE Ratio |
Forward PE Ratio |
Return on Equity |
Beta |
Buy Rating |
Implied Upside |
|
Alliance Fiber Optic Products Inc |
NASDAQ |
AFOP |
267.7 |
14.38 |
666,669 |
-31.2% |
30.3% |
12.6 |
11.1 |
27.4% |
1.41 |
75% |
59.9% |
|
Ultra Clean Holdings Inc |
NASDAQ |
UCTT |
292.8 |
9.92 |
273,761 |
20.2% |
57.2% |
13.6 |
11.9 |
12.3% |
1.07 |
100% |
48.2% |
|
Fortress Investment Group |
NYSE |
FIG |
3,208.2 |
7.39 |
1,036,181 |
7.3% |
30.5% |
9.9 |
7.1 |
34.5% |
1.66 |
80% |
36.3% |
|
Drew Industries Inc |
NYSE |
DW |
1,023.4 |
43.30 |
111,377 |
-10.3% |
26.4% |
16.8 |
15.9 |
17.7% |
1.10 |
80% |
33.4% |
|
Perfect World Co Ltd |
NASDAQ |
PWRD |
1,064.0 |
21.48 |
368,838 |
20.1% |
23.4% |
11.0 |
9.6 |
13.6% |
1.30 |
75% |
32.1% |
|
Ruth’s Hospitality Group |
NASDAQ |
RUTH |
395.4 |
11.09 |
211,471 |
-10.3% |
6.4% |
16.5 |
14.9 |
22.4% |
1.15 |
100% |
29.2% |
|
Mentor Graphics Corp |
NASDAQ |
MENT |
2,428.7 |
21.32 |
629,630 |
-2.3% |
7.9% |
16.2 |
12.2 |
12.8% |
1.20 |
89% |
26.6% |
|
TriMas Corp |
NASDAQ |
TRS |
1,474.1 |
32.57 |
212,224 |
-8.2% |
6.0% |
17.3 |
14.9 |
17.3% |
1.28 |
80% |
24.7% |
|
EMCOR Group Inc |
NYSE |
EME |
2,846.8 |
42.47 |
238,830 |
-5.6% |
18.9% |
17.9 |
16.1 |
10.5% |
1.09 |
75% |
23.9% |
|
Wilshire Bancorp Inc |
NASDAQ |
WIBC |
758.7 |
9.69 |
307,995 |
-4.4% |
17.1% |
13.7 |
12.5 |
12.2% |
1.09 |
86% |
16.1% |
|
SciClone Pharmaceuticals |
NASDAQ |
SCLN |
352.5 |
6.90 |
281,475 |
35.0% |
60.0% |
15.0 |
12.3 |
15.0% |
1.43 |
100% |
15.9% |
|
Crane Co |
NYSE |
CR |
4,181.4 |
70.89 |
297,467 |
-3.5% |
11.6% |
17.3 |
15.2 |
18.5% |
1.20 |
83% |
11.4% |
Source: Bloomberg
Company Description:
Alliance Fiber Optic Products Inc (NASDAQ: AFOP)
Alliance Fiber Optic Products, Inc. designs, manufactures, and markets a variety of high performance fiber optic components and modular solutions for leading and emerging communications equipment manufacturers. The company offers a broad product line of passive optical components including interconnect systems and couplers and splitters.
Ultra Clean Holdings Inc (NASDAQ: UCTT)
Ultra Clean Holdings, Inc. develops and supplies critical subsystems for the semiconductor capital equipment industry, focusing on gas delivery systems. These gas delivery systems enable the precise delivery of specialty gases used in a majority of the key steps in the semiconductor manufacturing process.
Fortress Investment Group LLC (NYSE: FIG)
Fortress Investment Group LLC is an alternative asset manager. The company raises, invests and manages private equity funds, hedge funds and publically traded alternative investment vehicles.
Drew Industries Inc (NYSE: DW)
Drew Industries Incorporated, through its subsidiaries, supplies a variety of components for manufactured homes and recreational vehicles. The company’s products include aluminum and vinyl windows and doors, as well as steel chassis and parts, axles, galvanized roofing, and refurbished axles and tires for manufactured homes and recreational vehicles.
Perfect World Co Ltd (NASDAQ: PWRD)
Perfect World Co. Ltd. develops online games. The company researches, designs, develops, and operates online role playing, web, social, and 3D casual online games. Perfect World offers its products and services mainly in China.
Ruth’s Hospitality Group Inc (NASDAQ: RUTH)
Ruth’s Hospitality Group Inc. operates a chain of upscale steak houses. The company’s restaurants are located throughout the United States and in several international locations.
Mentor Graphics Corp (NASDAQ: MENT)
Mentor Graphics Corporation manufactures, markets, and supports software and hardware electronic design automation products. The company provides related services which enable engineers to design, analyze, simulate, model, implement, and verify the components of electronic systems.
TriMas Corp (NASDAQ: TRS)
TriMas Corporation is a diversified manufacturer of proprietary products. The company manufactures trailer products, recreational accessories, packaging systems, energy products and industrial specialty products for the commercial, manufacturing, and consumer markets.
EMCOR Group Inc (NYSE: EME)
EMCOR Group, Inc. provides mechanical and electrical construction and facilities services around the world. The company specializes in the design, installation, integration, and start-up of distribution systems for electrical power, lighting systems, low-voltage systems such as fire and security alarms, voice and data communication systems, ventilation systems, and plumbing and piping systems.
Wilshire Bancorp Inc (NASDAQ: WIBC)
Wilshire Bancorp, Inc. is the holding company of Wilshire State Bank, which serves businesses and consumers in Los Angeles and Orange Counties in California and also has loan offices in Northern California, Washington, Oklahoma, Nevada and Texas. The Bank specializes in making Small Business Administration and other loans to minority-owned businesses.
SciClone Pharmaceuticals Inc (NASDAQ: SCLN)
SciClone Pharmaceuticals, Inc. is a global biopharmaceutical company that acquires, develops, and commercializes specialist-oriented drugs. The company’s products are for treating chronic and life-threatening diseases such as cancer, hepatitis B, hepatitis C, cystic fibrosis, and immune system disorders.
Crane Co (NYSE: CR)
Crane Co. manufactures engineered industrial products. The company’s products include vending machines, airplane braking devices, pumps, valves, and other industrial goods. Crane serves the aerospace manufacturing, power generation, hydrocarbon processing, commercial and residential building, plumbing, and food and beverage production industries.
