However hard the market slams a stock, there's always the chance it'll come bouncing right back. We'll consult our Motley Fool CAPS community to find shares on the rebound, examining one specific sector in search of companies with rising CAPS ratings.
Among the 343 stocks listed under "consumer goods" in the CAPS screener, we've unearthed more than a few with five-star ratings. That means some of our 145,000 CAPS members are confident that these stocks will beat the market in the months ahead. Let's see what members are saying about the five below:
|
Company |
CAPS Rating Today |
Recent Price |
52-Week Price Change |
Estimated Long-Term Growth Rate |
|---|---|---|---|---|
|
Cal-Maine Foods (NASDAQ:CALM) |
***** |
$28.57 |
13% |
NA |
|
Heinz (NYSE:HNZ) |
***** |
$43.23 |
11% |
7% |
|
PACCAR (NASDAQ:PCAR) |
***** |
$38.38 |
38% |
10% |
|
Tata Motors (NYSE:TTM) |
***** |
$13.82 |
204% |
35% |
|
Wonder Auto Technology (NASDAQ:WATG) |
***** |
$11.48 |
205% |
18% |
Sources: Motley Fool CAPS; Yahoo! Finance.
While the broader market averages have staged a pretty bold recovery since their depths in March, the average consumer goods stock has had a pretty strong run, too, with values up more than 86% from a year ago. Shoemaker Crocs (NASDAQ:CROX) defied the naysayers and jumped more than 300% in the past year, but even that was easily beaten by specialty bed maker Select Comfort (NASDAQ:SCSS), which returned from the pits of penny-stock territory to rise more than 1,000%.
Let's take a closer look at why some investors think a couple of these other companies won't be jumping from the frying pan into the fire.
Some spring in its step
Having increased in value just 13% over the past year, shares of Cal-Maine Foods still appear to be a good value. They're barely above where they started the year, and the country's largest egg producer could be ready for a run.
Cal-Maine sold 193 million dozen eggs in its latest quarter, a 13% increase over last year. Yet the selling price of $0.922 per dozen was 19% lower than the year-ago period, leading to a 9% drop in revenue and a dramatic drop of 55% in gross profit. However, retail sales of shell eggs historically have been greatest during the fall and winter months, and prices tend to be highest just before the holidays, so we might expect to see Cal-Maine bouncing back. Egg prices can be highly volatile, and producers have tended to increase their capacity as a means to offset declines in prices.
CAPS member foolishfoolhead1 writes that Cal-Maine is benefiting from healthy demand, All-Star ceejayoh likes the company's fundamentals, and All-Star member 00100 likes the way it generates cash:
Upthumb. Excellent cash flow. ... Good payout. 16% sales growth over 5 years. 1.2 Quick ratio. Low to nominal debt ratio. High gross margins. Good valuation.
Out of gas?
The U.S. auto industry may look like a bucket of bolts being held together with baling wire and duct tape, but China's car market still seems primed for growth. Maybe it's symbolic that a Chinese industrial manufacturer is now majority owner of the conspicuous Hummer.
And with China's car industry growing by leaps and bounds, it's going to need parts suppliers, which seems to put Wonder Auto Technology smack-dab in the middle of a whirlwind. The proceeds from a recent $59 million follow-on stock offering will be used to expand capacity, underscoring the growth that management expects.
CAPS member barnettech says Wonder Auto Technology isn't the perfect investment, but it's still a pretty good one:
The number of drivers in the world will triple with the growth of emerging markets. Will you be smart enough to invest now? [Wonder's] fundamentals aren't perfect but they are very very nice.
Sometimes being in the right place at the right time is better than having all your ducks in a row, and as the saying goes, it's sometimes better to be lucky than good. I agree that China is the center of projected auto growth, and I've marked Wonder Auto Technology to outperform the market on its CAPS page. Add your opinion to the page, or let me know in the comments box below whether you think the company is good to go.
The ball's in your court
There are many factors that go into whether a stock is a buy or a sell, so it pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page. Head over to CAPS today and share your thoughts with other members about whether you think these stocks are ready to bound higher.
