Saturday, 16. December 2017  
14.06.2017 11:42

STOCK SCREEN: U.S. Industrials With Solid Intrinsic Value Upside For A Prolonged Cycle

 

Recession probability models, including our own, currently suggest that the odds of a recession in the US over the next 12 months are less than 10%, which compares favorably to the long term average of recession probability.

 

Fundamentally the economic conditions that would trigger a recession in the U.S. within 6 to 12 months seem not to be in place. While there is some evidence of excess in particular sectors, like in the US used car market where valuations have already been lowered massively looking at Hertz as an example, these imbalances should not be significant risks from a macro perspective.

 

Traditional cyclical sectors as housing, capex, and consumer durables more broadly seem in good shape with reasonably solid balance sheets. In looking for ideas this week, we screen the industrial sector in the U.S. for stocks with solid upside to our AVM’s intrinsic value estimate.

 

Here are the filter criteria we used:

 

1. Market Capitalization above 1bn.

2. Market Sensitivity above average.

3. Above 10 percent Upside based on our AVM’s Mean Multiple 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

COUNTRY

INDUSTRY

LAST PRICE

MARKET CAP.

MEAN MULTIPLE UPSIDE [%]

PRICE / EARNINGS

PRICE / BOOK

 BUILDERS FIRSTSOURCE INC

 United States

 Building Materials

13.93

1565

32.9

13.4

4.8

 CORNING INC

 United States

 Electronics

28.77

26475

13.3

14.9

1.7

 STERICYCLE INC

 United States

 Environmental Control

83.76

7142

80.7

17.0

2.4