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Validea's Top Five Consumer Cyclical Stocks Based On John Neff - 9/29/2019

The following are the top rated Consumer Cyclical stocks according to Validea's Low PE Investor model based on the published strategy of John Neff. This strategy looks for firms with persistent earnings growth that trade at a discount relative to their earnings growth and dividend yield.

BORGWARNER INC. (BWA) is a mid-cap value stock in the Auto & Truck Parts industry. The rating according to our strategy based on John Neff is 79% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: BorgWarner Inc. is engaged in providing technology solutions for combustion, hybrid and electric vehicles. The Company's segments include Engine and Drivetrain. The Engine segment's products include turbochargers, timing devices and chains, emissions systems and thermal systems. The Engine segment develops and manufactures products for gasoline and diesel engines, and alternative powertrains. The Drivetrain segment's products include transmission components and systems, all-wheel drive (AWD) torque transfer systems and rotating electrical devices. The Company's products are manufactured and sold across the world, primarily to original equipment manufacturers (OEMs) of light vehicles (passenger cars, sport-utility vehicles (SUVs), vans and light trucks). The Company's products are also sold to other OEMs of commercial vehicles (medium-duty trucks, heavy-duty trucks and buses) and off-highway vehicles (agricultural and construction machinery and marine applications.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

P/E RATIO: PASS
EPS GROWTH: PASS
FUTURE EPS GROWTH: FAIL
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS
EPS PERSISTENCE: FAIL

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

DANA INC (DAN) is a mid-cap value stock in the Auto & Truck Parts industry. The rating according to our strategy based on John Neff is 79% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Dana Incorporated, formerly Dana Holding Corporation, is a global provider of technology driveline, sealing and thermal-management products. The Company operates in four segments: Light Vehicle Driveline Technologies (Light Vehicle), Commercial Vehicle Driveline Technologies (Commercial Vehicle), Off-Highway Driveline Technologies (Off-Highway) and Power Technologies. It has operations in North America, South America, Europe and Asia pacific. Its Light Vehicle segment offers products, such as front axles, rear axles, driveshafts/propshafts, differentials, torque couplings and modular assemblies. Its Commercial Vehicle segment offers products, such as steer axles, drive axles, drive shafts and tire inflation systems. Its Off-Highway segment offers products, such as front axles, rear axles, drive shafts, transmissions, torque converters, tire inflation systems and electronic controls. Its Power Technologies segment offers products, including gaskets and cover modules.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

P/E RATIO: PASS P/E RATIO: PASS
EPS GROWTH: PASS EPS GROWTH: FAIL
FUTURE EPS GROWTH: FAIL FUTURE EPS GROWTH: PASS
SALES GROWTH: PASS SALES GROWTH: PASS
TOTAL RETURN/PE: PASS TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS FREE CASH FLOW: PASS
EPS PERSISTENCE: FAIL EPS PERSISTENCE: FAIL

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

ALLISON TRANSMISSION HOLDINGS INC (ALSN) is a mid-cap value stock in the Auto & Truck Parts industry. The rating according to our strategy based on John Neff is 62% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Allison Transmission Holdings, Inc. and its subsidiaries design and manufacture commercial and defense fully-automatic transmissions. The Company manufactures fully-automatic transmissions for medium- and heavy-duty commercial vehicles, and medium-and heavy-tactical United States defense vehicles. The Company's transmissions are used in a range of applications, including on-highway trucks (distribution, refuse, construction, fire and emergency), buses (primarily school, transit and hybrid-transit), motorhomes, off-highway vehicles and equipment (energy, mining and construction) and defense vehicles (wheeled and tracked). The Company's transmissions are sold under the Allison Transmission brand name and remanufactured transmissions are sold under the ReTran brand name. The Company has developed over 100 different models that were used in more than 2,500 different vehicle configurations and were compatible with over 500 combinations of engines, as of December 31, 2016.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

P/E RATIO: PASS P/E RATIO: PASS P/E RATIO: FAIL
EPS GROWTH: PASS EPS GROWTH: FAIL EPS GROWTH: FAIL
FUTURE EPS GROWTH: FAIL FUTURE EPS GROWTH: PASS FUTURE EPS GROWTH: PASS
SALES GROWTH: PASS SALES GROWTH: PASS SALES GROWTH: PASS
TOTAL RETURN/PE: PASS TOTAL RETURN/PE: PASS TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS FREE CASH FLOW: PASS FREE CASH FLOW: PASS
EPS PERSISTENCE: FAIL EPS PERSISTENCE: FAIL EPS PERSISTENCE: PASS

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

ACUITY BRANDS, INC. (AYI) is a mid-cap growth stock in the Furniture & Fixtures industry. The rating according to our strategy based on John Neff is 62% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Acuity Brands, Inc. is a provider of lighting solutions for commercial, institutional, industrial, infrastructure and residential applications throughout North America. The Company offers a portfolio of indoor and outdoor lighting and building management solutions for commercial, industrial, infrastructure and residential applications. The portfolio of lighting solutions include lighting products utilizing fluorescent, light emitting diode (LED), organic LED (OLED), high intensity discharge, metal halide, and incandescent light sources to illuminate a number of applications. The solutions portfolio of the Company includes modular wiring, LED drivers, sensors, glass and inverters sold primarily to original equipment manufacturers (OEMs). Its lighting and building management solutions are marketed under various brand names, including Lithonia Lighting and Holophane. Through its subsidiary, IOTA Engineering, L.L.C., the Company provides emergency lighting products and power equipment.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

P/E RATIO: PASS P/E RATIO: PASS P/E RATIO: FAIL P/E RATIO: FAIL
EPS GROWTH: PASS EPS GROWTH: FAIL EPS GROWTH: FAIL EPS GROWTH: PASS
FUTURE EPS GROWTH: FAIL FUTURE EPS GROWTH: PASS FUTURE EPS GROWTH: PASS FUTURE EPS GROWTH: PASS
SALES GROWTH: PASS SALES GROWTH: PASS SALES GROWTH: PASS SALES GROWTH: PASS
TOTAL RETURN/PE: PASS TOTAL RETURN/PE: PASS TOTAL RETURN/PE: PASS TOTAL RETURN/PE: FAIL
FREE CASH FLOW: PASS FREE CASH FLOW: PASS FREE CASH FLOW: PASS FREE CASH FLOW: PASS
EPS PERSISTENCE: FAIL EPS PERSISTENCE: FAIL EPS PERSISTENCE: PASS EPS PERSISTENCE: PASS

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

COLUMBIA SPORTSWEAR COMPANY (COLM) is a mid-cap growth stock in the Apparel/Accessories industry. The rating according to our strategy based on John Neff is 62% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Columbia Sportswear Company is an apparel and footwear company. The Company designs, sources, markets and distributes outdoor lifestyle apparel, footwear, accessories and equipment under the Columbia, Mountain Hardwear, Sorel, prAna and other brands. Its geographic segments are the United States, Latin America and Asia Pacific (LAAP), Europe, Middle East and Africa (EMEA), and Canada. The Company develops and manages its merchandise in categories, including apparel, accessories and equipment, and footwear. It distributes its products through a mix of wholesale distribution channels, its own direct-to-consumer channels (retail stores and e-commerce), independent distributors and licensees. As of December 31, 2016, its products were sold in approximately 90 countries. In 59 of those countries, it sells to independent distributors to whom it has granted distribution rights. Contract manufacturers located outside the United States manufacture all of its products.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

P/E RATIO: PASS P/E RATIO: PASS P/E RATIO: FAIL P/E RATIO: FAIL P/E RATIO: FAIL
EPS GROWTH: PASS EPS GROWTH: FAIL EPS GROWTH: FAIL EPS GROWTH: PASS EPS GROWTH: PASS
FUTURE EPS GROWTH: FAIL FUTURE EPS GROWTH: PASS FUTURE EPS GROWTH: PASS FUTURE EPS GROWTH: PASS FUTURE EPS GROWTH: PASS
SALES GROWTH: PASS SALES GROWTH: PASS SALES GROWTH: PASS SALES GROWTH: PASS SALES GROWTH: PASS
TOTAL RETURN/PE: PASS TOTAL RETURN/PE: PASS TOTAL RETURN/PE: PASS TOTAL RETURN/PE: FAIL TOTAL RETURN/PE: FAIL
FREE CASH FLOW: PASS FREE CASH FLOW: PASS FREE CASH FLOW: PASS FREE CASH FLOW: PASS FREE CASH FLOW: PASS
EPS PERSISTENCE: FAIL EPS PERSISTENCE: FAIL EPS PERSISTENCE: PASS EPS PERSISTENCE: PASS EPS PERSISTENCE: PASS

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

Since its inception, Validea's strategy based on John Neff has returned 313.68% vs. 167.19% for the S&P 500. For more details on this strategy, click here

About John Neff: While known as the manager with whom many top managers entrusted their own money, Neff was far from the smooth-talking, high-profile Wall Streeter you might expect. He was mild-mannered and low-key, and the same might be said of the Windsor Fund that he managed for more than three decades. In fact, Neff himself described the fund as "relatively prosaic, dull, [and] conservative." There was nothing dull about his results, however. From 1964 to 1995, Neff guided Windsor to a 13.7 percent average annual return, easily outpacing the S&P 500's 10.6 percent return during that time. That 3.1 percentage point difference is huge over time -- a $10,000 investment in Windsor (with dividends reinvested) at the start of Neff's tenure would have ended up as more than $564,000 by the time he retired, more than twice what the same investment in the S&P would have yielded (about $233,000). Considering the length of his tenure, that track record may be the best ever for a manager of such a large fund.

About Validea: Validea is an investment research service that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here

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

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