Validea’s Top Five Consumer Cyclical Stocks Based On Joseph Piotroski – 12/25/2022
The following are the top rated Consumer Cyclical stocks according to Validea’s Book/Market Investor model based on the published strategy of Joseph Piotroski. This value-quant strategy screens for high book-to-market stocks, and then separates out financially sound firms by looking at a host of improving financial criteria.
MERCEDES BENZ GROUP AG (MBGAF) is a large-cap value stock in the Auto & Truck Manufacturers industry. The rating according to our strategy based on Joseph Piotroski is 100{a57a8b399caa4911091be19c47013a92763fdea5dcb0fe03ef6810df8f2f239d} based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80{a57a8b399caa4911091be19c47013a92763fdea5dcb0fe03ef6810df8f2f239d} or above typically indicates that the strategy has some interest in the stock and a score above 90{a57a8b399caa4911091be19c47013a92763fdea5dcb0fe03ef6810df8f2f239d} typically indicates strong interest.
Company Description: Mercedes-Benz Group AG, formerly Daimler AG (Daimler), is a Germany-based automotive engineering company. The Company engages in the development, production and distribution of cars and vans in Germany, and the management of the Daimler Group. The segments include Mercedes-Benz Cars, Mercedes-Benz Vans and Daimler Financial Services. The Mercedes-Benz Cars segment includes vehicles of the Mercedes-Benz brand, including the brands, Mercedes-AMG and Mercedes-Maybach, and small cars under the smart brand, as well as the Mercedes me brand. The Mercedes-Benz Vans sells vans under the brand name Mercedes-Benz and the Freightliner brand. The Daimler Mobility AG offers e.g. financing, leasing, car subscription and car rental, fleet management, digital services, as well as mobility services. The Daimler financial services also supports the sales of its automotive brands worldwide.
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.
| BOOK/MARKET RATIO: | PASS |
| RETURN ON ASSETS: | PASS |
| CHANGE IN RETURN ON ASSETS: | PASS |
| CASH FLOW FROM OPERATIONS: | PASS |
| CASH COMPARED TO NET INCOME: | PASS |
| CHANGE IN LONG TERM DEBT/ASSETS | PASS |
| CHANGE IN CURRENT RATIO: | PASS |
| CHANGE IN SHARES OUTSTANDING: | PASS |
| CHANGE IN GROSS MARGIN: | PASS |
| CHANGE IN ASSET TURNOVER: | PASS |
Detailed Analysis of MERCEDES BENZ GROUP AG
CONTINENTAL AG (ADR) (CTTAY) is a large-cap value stock in the Tires industry. The rating according to our strategy based on Joseph Piotroski is 90{a57a8b399caa4911091be19c47013a92763fdea5dcb0fe03ef6810df8f2f239d} based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80{a57a8b399caa4911091be19c47013a92763fdea5dcb0fe03ef6810df8f2f239d} or above typically indicates that the strategy has some interest in the stock and a score above 90{a57a8b399caa4911091be19c47013a92763fdea5dcb0fe03ef6810df8f2f239d} typically indicates strong interest.
Company Description: Continental AG is a Germany-based company offering mobility solutions to automotive sector. The Company operates in four group sectors: Automotive, Tires, ContiTech and Contract Manufacturing. Automotive sector comprises technologies for passive safety, brake, chassis, motion and motion control systems. The sector is further divided into five business areas: Architecture and Networking, Autonomous Mobility, Safety and Motion, Smart Mobility and User Experience. Tires sector offers digital monitoring and tire management systems and other services. It is divided into Original Equipment, Replacement APAC, Replacement EMEA, Replacement The Americas and Specialty Tires business areas. ContiTech group sector develops and manufactures cross-material, environmentally friendly and intelligent products, and systems. It is divided into six business areas. Contract Manufacturing segment handles contract manufacturing for Vitesco Technologies and includes one business area.
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.
| BOOK/MARKET RATIO: | PASS |
| RETURN ON ASSETS: | PASS |
| CHANGE IN RETURN ON ASSETS: | PASS |
| CASH FLOW FROM OPERATIONS: | PASS |
| CASH COMPARED TO NET INCOME: | PASS |
| CHANGE IN LONG TERM DEBT/ASSETS | PASS |
| CHANGE IN CURRENT RATIO: | PASS |
| CHANGE IN SHARES OUTSTANDING: | PASS |
| CHANGE IN GROSS MARGIN: | FAIL |
| CHANGE IN ASSET TURNOVER: | PASS |
Detailed Analysis of CONTINENTAL AG (ADR)
GOODYEAR TIRE & RUBBER CO (GT) is a mid-cap value stock in the Tires industry. The rating according to our strategy based on Joseph Piotroski is 90{a57a8b399caa4911091be19c47013a92763fdea5dcb0fe03ef6810df8f2f239d} based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80{a57a8b399caa4911091be19c47013a92763fdea5dcb0fe03ef6810df8f2f239d} or above typically indicates that the strategy has some interest in the stock and a score above 90{a57a8b399caa4911091be19c47013a92763fdea5dcb0fe03ef6810df8f2f239d} typically indicates strong interest.
Company Description: The Goodyear Tire & Rubber Company is engaged in developing, manufacturing, marketing and distributing tires for various applications. The Company also manufactures and markets rubber-related chemicals. It is an operator of commercial truck service and tire retreading centers. It operates approximately 1,000 retail outlets where it offers its products for sale to consumer and commercial customers and provides repair and other services. The Company’s operating segments represent its regional tire businesses: Americas; Europe, Middle East and Africa (EMEA), and Asia Pacific. The Company manufactures and markets various lines of rubber tires for automobiles, trucks, buses, aircraft, motorcycles, earthmoving and mining equipment, farm implements, industrial equipment, and various other applications. The Company’s brands include Goodyear, Cooper, Dunlop, Sava, Kelly Tires and Debica. It manufactures products in approximately 57 manufacturing facilities in over 23 countries worldwide.
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.
| BOOK/MARKET RATIO: | PASS |
| RETURN ON ASSETS: | PASS |
| CHANGE IN RETURN ON ASSETS: | PASS |
| CASH FLOW FROM OPERATIONS: | PASS |
| CASH COMPARED TO NET INCOME: | PASS |
| CHANGE IN LONG TERM DEBT/ASSETS | PASS |
| CHANGE IN CURRENT RATIO: | PASS |
| CHANGE IN SHARES OUTSTANDING: | FAIL |
| CHANGE IN GROSS MARGIN: | PASS |
| CHANGE IN ASSET TURNOVER: | PASS |
Detailed Analysis of GOODYEAR TIRE & RUBBER CO
MOHAWK INDUSTRIES INC (MHK) is a mid-cap growth stock in the Textiles – Non Apparel industry. The rating according to our strategy based on Joseph Piotroski is 90{a57a8b399caa4911091be19c47013a92763fdea5dcb0fe03ef6810df8f2f239d} based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80{a57a8b399caa4911091be19c47013a92763fdea5dcb0fe03ef6810df8f2f239d} or above typically indicates that the strategy has some interest in the stock and a score above 90{a57a8b399caa4911091be19c47013a92763fdea5dcb0fe03ef6810df8f2f239d} typically indicates strong interest.
Company Description: Mohawk Industries, Inc. is a flooring manufacturer that creates products to enhance residential and commercial spaces around the world. The Company’s segments include Global Ceramic, Flooring North America (Flooring NA) and Flooring Rest of the World (Flooring ROW). The Global Ceramic segment designs, manufactures, sources and markets a line of ceramic tile, porcelain tile, natural stone, quartz, porcelain slab countertops and other products, which it distributes primarily in North America, Europe, South America and Russia. The Flooring NA segment designs, manufactures, sources and markets its floor covering product lines, including carpets, rugs, carpet pads, laminate, resilient and wood flooring, which it distributes through its network of regional distribution centers and satellite warehouses. The Flooring ROW segment designs, manufactures, sources, licenses and markets its wood flooring, laminate, roofing elements, insulation boards, medium-density fiberboard and chipboard.
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.
| BOOK/MARKET RATIO: | PASS |
| RETURN ON ASSETS: | PASS |
| CHANGE IN RETURN ON ASSETS: | PASS |
| CASH FLOW FROM OPERATIONS: | PASS |
| CASH COMPARED TO NET INCOME: | PASS |
| CHANGE IN LONG TERM DEBT/ASSETS | PASS |
| CHANGE IN CURRENT RATIO: | FAIL |
| CHANGE IN SHARES OUTSTANDING: | PASS |
| CHANGE IN GROSS MARGIN: | PASS |
| CHANGE IN ASSET TURNOVER: | PASS |
Detailed Analysis of MOHAWK INDUSTRIES INC
GENERAL MOTORS COMPANY (GM) is a large-cap value stock in the Auto & Truck Manufacturers industry. The rating according to our strategy based on Joseph Piotroski is 80{a57a8b399caa4911091be19c47013a92763fdea5dcb0fe03ef6810df8f2f239d} based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80{a57a8b399caa4911091be19c47013a92763fdea5dcb0fe03ef6810df8f2f239d} or above typically indicates that the strategy has some interest in the stock and a score above 90{a57a8b399caa4911091be19c47013a92763fdea5dcb0fe03ef6810df8f2f239d} typically indicates strong interest.
Company Description: General Motors Company designs, builds and sells trucks, crossovers, cars and automobile parts and provides software-enabled services and subscriptions worldwide. The Company provides automotive financing services through its General Motors Financial Company, Inc. (GM Financial) segment. GM North America (GMNA) and GM International (GMI) develops, manufactures and/or markets vehicles under the Buick, Cadillac, Chevrolet and GMC brands. The Company’s segments include GMNA, GMI, Cruise and GM Financial. Its Cruise segment is engaged in the development and commercialization of autonomous vehicle technology. It offers OnStar and connected services to approximately 22 million connected vehicles globally through subscription-based and complimentary services. It is also developing hydrogen fuel cell applications across transportation and industries, including mobile power generation, class seven/eight truck, locomotive, aerospace 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.
| BOOK/MARKET RATIO: | PASS |
| RETURN ON ASSETS: | PASS |
| CHANGE IN RETURN ON ASSETS: | PASS |
| CASH FLOW FROM OPERATIONS: | PASS |
| CASH COMPARED TO NET INCOME: | PASS |
| CHANGE IN LONG TERM DEBT/ASSETS | PASS |
| CHANGE IN CURRENT RATIO: | PASS |
| CHANGE IN SHARES OUTSTANDING: | FAIL |
| CHANGE IN GROSS MARGIN: | PASS |
| CHANGE IN ASSET TURNOVER: | FAIL |
Detailed Analysis of GENERAL MOTORS COMPANY
More details on Validea’s Joseph Piotroski strategy
About Joseph Piotroski: Piotroski isn’t your typical Wall Street big shot. In fact, he’s not even a professional investor. He’s a good old numbers-crunching accountant and college professor. But in 2000, shortly after he started teaching at the University of Chicago’s Graduate School of Business, Piotroski published a groundbreaking paper in the Journal of Accounting Research entitled “Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers”. In it, Piotroski laid out an accounting-based stock-selection/shorting method that produced a 23 percent average annual back-tested return from 1976 through 1996 — more than double the S&P 500’s gain during that time. Piotroski’s findings were reported in major financial publiations like SmartMoney. Today, he teaches accounting at Stanford University’s Graduate School of Business.
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
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