8 Oversold Stocks with High Cash and Conservative Accounting Practices

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Temporary fluctuations in a stock’s price are overshadowed in the long term by company fundamentals. This is why it is important to consider things such as cash holdings and quality of earnings when determining whether a stock is fairly priced.

With this in mind, we wanted to look at the fundamentals of today’s oversold stocks. We chose to look at the P/CF ratio as an indicator of cash holdings, and we used forensic accounting firm Audit Integrity’s AGR score to measure accounting risk. (Scores closer to 100 are increasingly less risky.) We found 8 oversold stocks with high cash holdings (P/CF < 5) and low accounting risk, all of which are listed below.

Do you think these names are oversold? Use this list as a starting-off point for your own analysis.

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1. Access a thorough description of all companies mentioned

2. Compare analyst ratings for all stocks mentioned below 

3. Visualize market cap changes for the top stocks mentioned

List sorted by AGR score. 

1. Telephone & Data Systems Inc. (TDS): Wireless Communications Industry. Market cap of $3.45B. P/CF ratio at 4.48. RSI(14) at 39.58. According to Audit Integrity, the company follows Conservative accounting practices, with an AGR score of 100. TDS has a relatively low correlation to the market (beta = 0.77), which may be appealing to risk-averse investors. The stock has lost 2.91% over the last year. (View investor sentiment on TDS)

2. James River Coal Co. (JRCC): Industrial Metals & Minerals Industry. Market cap of $768.13M. P/CF ratio at 4.26. RSI(14) at 38.9. According to Audit Integrity, the company follows Conservative accounting practices, with an AGR score of 96. JRCC might be undervalued at current levels, with a PEG ratio at 0.79, and P/FCF ratio at 10.43. It's been a rough couple of days for the stock, losing 6.22% over the last week. (View investor sentiment on JRCC)

3. Southwest Airlines Co. (LUV): Regional Airlines Industry. Market cap of $8.69B. P/CF ratio at 2.46. RSI(14) at 35.22. According to Audit Integrity, the company follows Conservative accounting practices, with an AGR score of 96. The stock has lost 15.29% over the last year. (View investor sentiment on LUV)

4. Korn/Ferry International (KFY): Staffing & Outsourcing Services Industry. Market cap of $975.10M. P/CF ratio at 4.84. RSI(14) at 33.86. According to Audit Integrity, the company follows Conservative accounting practices, with an AGR score of 94. The stock has gained 16.56% over the last year.

5. Coherent Inc. (COHR): Scientific & Technical Instruments Industry. Market cap of $1.40B. P/CF ratio at 4.71. RSI(14) at 38.97. According to Audit Integrity, the company follows Conservative accounting practices, with an AGR score of 92. After a solid performance over the last year, COHR has pulled back during recent sessions. The stock is 5.11% below its SMA20 and 7.15% below its SMA50, but remains 17.53% above its SMA200. The stock has gained 68.46% over the last year.

6. Jabil Circuit Inc. (JBL): Printed Circuit Boards Industry. Market cap of $4.19B. P/CF ratio at 4.64. RSI(14) at 35.08. According to Audit Integrity, the company follows Conservative accounting practices, with an AGR score of 91. This is a risky stock that is significantly more volatile than the overall market (beta = 2.16). After a solid performance over the last year, JBL has pulled back during recent sessions. The stock is 6.92% below its SMA20 and 9.28% below its SMA50, but remains 12.77% above its SMA200. The stock has gained 22.17% over the last year.

7. Assurant Inc. (AIZ): Accident & Health Insurance Industry. Market cap of $3.75B. P/CF ratio at 3.26. RSI(14) at 35.78. According to Audit Integrity, the company follows Conservative accounting practices, with an AGR score of 89. The stock has gained 10.59% over the last year.

8. Granite Construction Incorporated (GVA): Heavy Construction Industry. Market cap of $1.03B. P/CF ratio at 2.35. RSI(14) at 34.76. According to Audit Integrity, the company follows Conservative accounting practices, with an AGR score of 87. GVA has a relatively low correlation to the market (beta = 0.56), which may be appealing to risk-averse investors. The stock is a short squeeze candidate, with a short float at 16.03% (equivalent to 15.03 days of average volume). The stock has lost 14.27% over the last year.

AGR score sourced from Audit Integrity, all other data sourced from Finviz. Data sourced on April 18th.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks


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