Sunday, 24. September 2017  
05.03.2017 06:06
Author: Nic Wright

STOCK SCREEN: U.S. Reflation Trade Stocks With Solid Upside To Intrinsic Value

 

Reflation trades generally fared poorly in February. But with EPS $125 within reach for the S&P 500 in 2017 (equivalent to +15% y/y, with over half the EPS gain from Financials and Energy), reflation trade stocks could easily resume leadership if investor’s deflation concerns abate.

 

At the margin, there are still many potentially negative catalysts for reflation ahead with French elections, Greece and pricing of increased geo-political risks associated with Trump, just to mention the most obvious. That said, the shift from monetary to fiscal expansion and an increase in inflation expectations was underway before Trump was elected. Although there is likely to be volatility in the short term, it is probably too early to be calling an end to reflation.

 

In this context, we screen for cyclical U.S. value stocks that seem most attractive according to our AVM’s Intrinsic Stock Value estimates.

 

Here are the filter criteria:

1. Market capitalization above 1bn.

2. Market Sensitivity above average

3. Cheap according to our AVM’s Mean Multiple and Graham approach.

 

Here is our list of stocks matching all criteria in alphabetical order. Company names in the table below are linked to the ANALYZER, our single stock analysis tool. Intrinsic Value Model assumptions can be adapted in the MODELER, our modeling and forecasting environment:

CLICK COMPANY NAME FOR DETAILED STOCK VALUE ANALYSIS

INDUSTRY

LAST PRICE

MARKET CAP.

MEAN MULTIPLE UPSIDE [%]

GRAHAM UPSIDE [%]

PRICE / EARNINGS

 ALLIANCE HOLDINGS GP LP

 Coal

29.43

1762

41.0

70.6

8.4

 ALLIANCE RESOURCE PARTNERS

 Coal

23.50

1753

13.6

71.1

8.6

 CTRIP.COM INTERNATIONAL-ADR

 Internet

48.54

24155

516.7

117.4

16.7

 DISCOVERY COMMUNICATIONS-A

 Media

29.27

11213

23.2

48.3

8.9

 FIRST SOLAR INC

 Alternative Energy

37.90

3943

164.8

28.4

8.1

 FORD MOTOR CO

 Car Manufacturers

12.47

49561

24.1

24.8

7.6

 FORWARD AIR CORP

 Transportation

49.75

1504

54.5

9.0

26.5

 LEUCADIA NATIONAL CORP

 Holding Companies

25.69

9249

314.8

4.1

123.8

 LIFEPOINT HEALTH INC

 Healthcare Services

64.10

2560

38.9

56.9

16.4

 MAGELLAN HEALTH INC

 Healthcare Services

74.35

1755

13.1

82.0

20.5

 NAVIENT CORP

 Div. Financial Services

15.38

4476

22.0

178.0

8.7

 STAPLES INC

 Retail

9.28

6037

75.8

49.7

10.5

 STEVEN MADDEN LTD

 Apparel

37.15

2252

6.9

14.6

18.6

 SUPER MICRO COMPUTER INC

 Computers

27.00

1304

21.0

15.1

15.3

 VIACOM INC-CLASS A

 Media

46.65

17556

7.8

21.4

11.5