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No Coupon Necessary to Buy THESE Consumer Stocks at a Big Discount

Jun 21, 2019

Better Data for Better Investment DecisionsBetter Data for Better Investment Decisions
Better Data for Better Investment DecisionsBetter Data for Better Investment Decisions 
 

 

  • Today we are conducting an analysis of trading multiples in US consumer stocks in the Russell 1000. With US stocks trading near all-time highs, we think it makes sense to look at “cheap” stocks relative to historic levels to identify stocks that may offer some value while so many trade at a premium.  
     
  • In this analysis, we are looking at the most expensive stocks in the Russell 1000 based on their Next Twelve Months (NTM) P/E, EBIT/EV, and their Trailing Twelve Month (TTM) FCF/EV.
     
  • We chose these 3 factors because they are unique and differentiated in their methods of measuring valuation. The final 10 stocks highlighted in the table are based on an aggregate overall ranking score.
     
  • Bright Horizons Family Solutions Inc. (BFAM) is highlighted as one of the cheapest US consumer stocks in the Russell 1000 while it maintains “Top Buy” ratings in our US Large-Cap and US Consumer Discretionary stock models, making it our highest conviction long idea in this post! 
     
  • Dunkin’ Brands Group, Inc. (DNKN) is another "cheap" stock highlighted that receives a “Top Buy” rating in the Quantamize US Consumer Discretionary stock model.

 

Most Expensive Stock in the Russell 1000

Name Ticker Industry NTM Price/
Earnings
TTM Free Cash Flow/
Total Enterprise Value
NTM EBIT/
Total Enterprise Value
Primary
Rating
Secondary
Rating
H&R Block, Inc. HRB Specialized Consumer Services 6.50x 24.52% 12.79% Attractive Attractive
frontdoor, inc. FTDR Specialized Consumer Services 7.90x 8.13% 10.86% Attractive -
General Motors Company GM Automobile Manufacturers 8.59x 9.12% 10.66% Neutral Attractive
Carnival Corporation CCL Hotels, Resorts and Cruise Lines 6.34x 8.96% 9.07% Unattractive Attractive
V.F. Corporation VFC Apparel, Accessories and Luxury Goods 10.18x 10.28% 11.71% Top Short Attractive
Bright Horizons Family Solutions Inc. BFAM Education Services 9.91x 10.65% 10.33% Top Buy Top Buy
Aramark ARMK Restaurants 8.82x 8.10% 10.54% Neutral Neutral
Dunkin' Brands Group, Inc. DNKN Restaurants 14.00x 15.74% 21.38% Neutral Top Buy
LKQ Corporation LKQ Distributors 12.05x 11.73% 10.45% Attractive Attractive
The Gap, Inc. GPS Apparel Retail 12.10x 99.45% 9.43% Neutral Neutral

 

We Crunch the Numbers, You Make the Trade.We Crunch the Numbers, You Make the Trade.
We Crunch the Numbers, You Make the Trade.We Crunch the Numbers, You Make the Trade.

 

Select Highlights: 

  • H&R Block, Inc. (HRB) is the provider of assisted income tax return preparation, do-it-yourself tax solutions, and other services related to income tax returns primarily for the general public. 
     
  • General Motors Company (GM) designs, manufactures, and sells cars, trucks, crossovers, and automobile parts across the globe through its GM North American, GM International, GM Cruise, and GM Financial business segments.  
     
  • Carnival Corporation (CCL) is a leisure travel company that operates across the globe through brands such as Carnival Cruise Line, Princess Cruises, P&O Cruises, and more.  
     
  • Aramark (ARMK) is the global provider of food, facilities management, and uniform services to customers in the education, sports, healthcare, and leisure industries.  
     
  • The Gap, Inc. (GPS) operates as an apparel retail company that sells apparel, accessories, and personal care products for men, woman, and children under brands such as Athleta, Banana Republic, and Old Navy.

 

Global Top Stock IdeasTOP LONG & TOP SHORT STOCK IDEAS FOR GLOBAL MARKETSMONTHLY TOP IDEAS FROM OUR MULTI-FACTOR QUANTITATIVE MODELS
Global Top Stock IdeasTOP LONG & TOP SHORT STOCK IDEAS FOR GLOBAL MARKETSMONTHLY TOP IDEAS FROM OUR MULTI-FACTOR QUANTITATIVE MODELS