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Validea’s Top Ten Consumer Cyclical Stocks Based On Joel Greenblatt – 3/26/2023

The following are the top rated Consumer Cyclical stocks according to Validea’s Earnings Yield Investor model based on the published strategy of Joel Greenblatt. This value model looks for companies with high return on capital and earnings yields.

ARHAUS INC (ARHS) is a small-cap value stock in the Furniture & Fixtures industry. The rating according to our strategy based on Joel Greenblatt is 80% 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: Arhaus, Inc. is a lifestyle brand and omnichannel retailer of premium home furnishings. The Company through its proprietary model designs and sources products from manufacturers and artisans. It has approximately 75 showroom and design centers locations across the United States. The Company’s in-home designers, who work with clients in the showroom and travel to its clients’ residences and offer personalized solutions. The Company’s online capabilities provide research and discovery and allow clients to begin or complete transactions online. Its online design services professionals and virtual tools complement its e-commerce platform by engaging clients and providing them with expert design advice and capabilities. The Company distributes two large catalogs each year, a January and a September edition, in both an online and physical format. It also distributes catalogs for specific categories, such as outdoor furnishings, special collections, and certain holidays.

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.

EARNINGS YIELD: NEUTRAL
RETURN ON TANGIBLE CAPITAL: NEUTRAL
FINAL RANKING: FAIL

Detailed Analysis of ARHAUS INC

ARHS Guru Analysis

ARHS Fundamental Analysis

LESLIE’S INC (LESL) is a small-cap value stock in the Recreational Products industry. The rating according to our strategy based on Joel Greenblatt is 30% 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: Leslie’s Inc. is a pool and spa aftermarket company. The Company serves the aftermarket needs of residential and professional consumers with an assortment of essential pool and spa care products. It markets and sells pool and spa supplies and related products and services, which primarily consist of maintenance items such as chemicals, equipment and parts, and cleaning accessories, as well as safety, recreational, and fitness-related products. It operates an integrated ecosystem of over 975 physical locations. It also offers essential services, such as equipment installation and repair for residential consumers and professional pool operators. The Company also provides complimentary, commercial-grade in-store water testing and analysis via its proprietary AccuBlue system, which improves consumer engagement, conversion, basket size, and loyalty.

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.

EARNINGS YIELD: NEUTRAL
RETURN ON TANGIBLE CAPITAL: NEUTRAL
FINAL RANKING: FAIL

Detailed Analysis of LESLIE’S INC

LESL Guru Analysis

LESL Fundamental Analysis

WABASH NATIONAL CORPORATION (WNC) is a small-cap value stock in the Auto & Truck Manufacturers industry. The rating according to our strategy based on Joel Greenblatt is 30% 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: Wabash National Corporation provides connected solutions for the transportation, logistics and distribution industries. It designs and manufactures a diverse range of products, including dry freight and refrigerated trailers, platform trailers, tank trailers, dry and refrigerated truck bodies, structural composite panels and products, trailer aerodynamic solutions, and specialty food grade processing equipment. Its segments include Transportation Solutions (TS) and Parts & Services (P&S). The TS segment comprises the design and manufacturing operations for the Company’s transportation-related equipment and products. This includes dry and refrigerated van trailers, platform trailers, tank trailers and truck-mounted tanks, truck-mounted dry and refrigerated truck bodies, and EcoNex technology products. The P&S segment is comprised of aftermarket parts and services; Wabash Parts LLC; food, dairy, and beverage equipment; as well as the upfitting component of its truck bodies business.

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.

EARNINGS YIELD: NEUTRAL
RETURN ON TANGIBLE CAPITAL: NEUTRAL
FINAL RANKING: FAIL

Detailed Analysis of WABASH NATIONAL CORPORATION

WNC Guru Analysis

WNC Fundamental Analysis

HILLENBRAND, INC. (HI) is a mid-cap growth stock in the Furniture & Fixtures industry. The rating according to our strategy based on Joel Greenblatt is 10% 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: Hillenbrand, Inc. is a global industrial company that provides engineered, mission-critical processing equipment and solutions. The Company’s segments include Advanced Process Solutions, and Molding Technology Solutions. The Advanced Process Solutions segment is a global provider of compounding, extrusion, and material handling, screening and separating equipment and systems, and services. The segment is focused on engineered industrial processing solutions and aftermarket parts and services for a range of end markets and applications, including food, plastics, chemicals, and recycling. The Molding Technology Solutions segment is engaged in engineered and customized equipment and systems and services in plastic technology and processing. Its product portfolio includes injection molding and extrusion equipment and hot runner systems and process controller technology. The Company’s portfolio includes brands, such as Coperion, Milacron Injection Molding & Extrusion, and Mold-Masters.

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.

EARNINGS YIELD: NEUTRAL
RETURN ON TANGIBLE CAPITAL: NEUTRAL
FINAL RANKING: FAIL

Detailed Analysis of HILLENBRAND, INC.

HI Guru Analysis

HI Fundamental Analysis

ADIDAS AG – ADR (ADDYY) is a large-cap growth stock in the Footwear industry. The rating according to our strategy based on Joel Greenblatt is 0% 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: Adidas AG is a Germany-based company that designs, develops, produces and markets a range of athletic and sports lifestyle products. The Company’s segments include Europe, North America, Asia-Pacific, Russia/CIS, Latin America; Emerging Markets, adidas Golf, Runtastic and Other centrally managed business. Each segment includes wholesale, retail and e-commerce business activities relating to the distribution and sale of products of the adidas brand to retail customers and end consumers. The Company has over 2,500 own-retail stores , mono-branded franchise stores, shop-in-shops, joint ventures with retail partners and co-branded stores and an e-commerce channel, which is available to customers in over 50 countries. The adidas branded products include footwear, apparel and hardware, such as bags and balls.

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.

Detailed Analysis of ADIDAS AG – ADR

ADDYY Guru Analysis

ADDYY Fundamental Analysis

ADVANCE AUTO PARTS, INC. (AAP) is a mid-cap value stock in the Auto & Truck Parts industry. The rating according to our strategy based on Joel Greenblatt is 0% 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: Advance Auto Parts, Inc. is an automotive aftermarket parts provider in North America, serving both professional installers and do-it-yourself (DIY) customers. Its stores and branches offer a selection of brand names, original equipment manufacturers (OEM), and brand-owned automotive replacement parts, accessories, batteries and maintenance items for domestic and imported cars, vans, sport utility vehicles, and light and heavy-duty trucks. It operates approximately 4,747 stores and 313 branches within the United States, Canada, Puerto Rico, and the United States Virgin Islands. The Company operates through four trade names: Advance Auto Parts, Autopart International, Carquest, and Worldpac. Its Advance Auto Parts focus on both professional and DIY customers. The stores carry a variety of products serving aftermarket auto part needs for both domestic and import vehicles. Its Autopart International operates in the North-eastern and Mid-Atlantic regions of the United States.

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.

EARNINGS YIELD: NEUTRAL
RETURN ON TANGIBLE CAPITAL: NEUTRAL
FINAL RANKING: FAIL

Detailed Analysis of ADVANCE AUTO PARTS, INC.

AAP Guru Analysis

AAP Fundamental Analysis

GRIFFON CORPORATION (GFF) is a small-cap value stock in the Appliance & Tool industry. The rating according to our strategy based on Joel Greenblatt is 0% 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: Griffon Corporation is a diversified management and holding company, which conducts its business through its subsidiaries. The Company’s segments include Consumer and Professional Products (CPP) and Home and Building Products (HBP). CPP segment manufactures branded consumer and professional tools; residential, industrial and commercial fans; home storage and organization products, and products that enhance indoor and outdoor lifestyles. Its brand portfolio for long-handled tools, outdoor decor, and landscaping product includes AMES, True Temper, Garant, Harper, UnionTools, Westmix, Cyclone, Southern Patio, Northcote Pottery, Nylex, Hills, Kelkay, Tuscan Path, La Hacienda, Kelso, Dynamic Design, Apta and Quatro Design. HBP segment conducts its operations through Clopay, which is a manufacturer and marketer of garage doors and rolling steel doors in North America. Its garage doors and rolling steel doors are sold under the Clopay, Ideal, Holmes, Cornell and Cookson brands.

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.

Detailed Analysis of GRIFFON CORPORATION

GFF Guru Analysis

GFF Fundamental Analysis

FISKER INC (FSR) is a small-cap value stock in the Auto & Truck Manufacturers industry. The rating according to our strategy based on Joel Greenblatt is 0% 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: Fisker Inc. is building a technology-enabled, asset-light automotive business model for automotive industry. The Company is focused on vehicle development and sales and services. The Company is involved in designing and developing electric vehicles. Its Fisker Flexible Platform Agnostic Design (FF-PAD) a process that allows the design and development of a vehicle to be adapted to any given EV platform in the specific segment size. Its segments include White space segment, Value segment, and Conservative premium segment. It intends to offer third-party insurance and self-insurance mechanisms to its customers to provide insurance against certain risks, including auto liability and physical damage, general liability and products liability. It intends to market and sell its vehicles directly to customers using its digital platforms, including the Flexee App and Website. The Company has not generated any revenue.

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.

Detailed Analysis of FISKER INC

FSR Guru Analysis

FSR Fundamental Analysis

FEDERAL SIGNAL CORP (FSS) is a mid-cap growth stock in the Auto & Truck Manufacturers industry. The rating according to our strategy based on Joel Greenblatt is 0% 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: Federal Signal Corporation manufactures and supplies a suite of products and integrated solutions for municipal, governmental, industrial, and commercial customers. It operates through two segments: the Environmental Solutions Group and the Safety and Security Systems Group. The Environmental Solutions Group is a manufacturer and supplier of a full range of street sweepers, sewer cleaners, industrial vacuum loaders, safe-digging trucks, high-performance water blasting equipment, road-marking and line-removal equipment, dump truck bodies, trailers, and metal extraction support equipment. It manufactures vehicles and equipment in the United States and Canada that are sold under the Elgin, Vactor, Guzzler, and TRUVAC brand names. The Safety and Security Systems Group is a manufacturer and supplier of comprehensive systems and products that law enforcement, fire rescue, emergency medical services, campuses, military facilities, and industrial sites use to protect people and property.

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.

EARNINGS YIELD: NEUTRAL
RETURN ON TANGIBLE CAPITAL: NEUTRAL
FINAL RANKING: FAIL

Detailed Analysis of FEDERAL SIGNAL CORP

FSS Guru Analysis

FSS Fundamental Analysis

DORMAN PRODUCTS INC (DORM) is a mid-cap growth stock in the Auto & Truck Parts industry. The rating according to our strategy based on Joel Greenblatt is 0% 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: Dorman Products, Inc. is a supplier of replacement and upgrade parts in the motor vehicle aftermarket industry, serving passenger cars, light, medium, and heavy-duty trucks, as well as specialty vehicles, including utility terrain vehicles (UTVs) and all-terrain vehicles (ATVs). The Company is an aftermarket supplier of parts that are traditionally available to professional installers and consumers only from original equipment manufacturers or salvage yards. These parts include leaf springs, intake manifolds, exhaust manifolds, window regulators, radiator fan assemblies, tire pressure monitor sensors, exhaust gas recirculation (EGR) coolers, UTV windshields, and complex electronics modules. Its product classes include powertrain, chassis, motor vehicle body, and hardware. Its products are sold primarily through aftermarket retailers, including through their online platforms; dealers; national, regional and local warehouse distributors and specialty markets; and salvage yards.

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.

EARNINGS YIELD: NEUTRAL
RETURN ON TANGIBLE CAPITAL: NEUTRAL
FINAL RANKING: FAIL

Detailed Analysis of DORMAN PRODUCTS INC

DORM Guru Analysis

DORM Fundamental Analysis

Joel Greenblatt Portfolio

Top Joel Greenblatt Stocks

About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two — and only two — fundamental variables. The “Magic Formula,” as he called it, produced back-tested returns of 30.8 percent per year from 1988 through 2004, more than doubling the S&P 500’s 12.4 percent return during that time. Greenblatt also produced exceptional returns as managing partner at Gotham Capital, a New York City-based hedge fund he founded. The firm averaged a remarkable 40 percent annualized return over more than two decades.

About Validea: Validea is aninvestment researchservice 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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