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5 Manufacturing Stocks with 25% Upside Potential

Growth In US Manufacturing

Two surveys released on Tuesday highlighted that December US manufacturing activity grew at its fastest rate in about two years. The surveys also highlighted that “new orders” grew at its fastest rate since 2009 suggesting that US manufacturers will continue to see increasing demand over the coming months. It was also reported that the increase was primarily driven from buyers within the US.

Opportunity for Investors?

This stock screen was used to find manufacturing companies that appear be trading at a discount to intrinsic value.

Note that while improving demand is typically a good sign for US manufactures, the strengthening of the US dollar could make it more difficult for these companies to sell products overseas. Due to demand being primarily driven domestically in addition to the strong dollar, the screened stocks were then filtered to find manufacturing companies that generate the majority of their revenues within the United States.

5 Undervalued US Manufacturers with 25% Upside Potential fair value data shows that there are only 5 US manufacturing stocks that have 25% or more margin of safety: Vera Bradley (Nasdaq:VRA), Cooper Tire & Rubber (NYSE:CTB), Farmer Bros (Nasdaq:FARM), Allergan (NYSE:AGN) and Motorcar Parts of America (Nasdaq:MPAA).

Vera Bradley manufactures and sells handbags, accessories, luggage and travel items for women. The company's shares last traded at $12.43 as of Wednesday, approximately 58% of its 52 week high. fair value data implies that the stock is currently 45% undervalued while Wall Street's consensus price target of $14.40 implies 16% upside.

continue reading 5 Undervalued US Manufacturers with 25% Upside.

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