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Validea’s Top Ten Consumer Cyclical Stocks Based On Warren Buffett – 2/26/2023

Validea’s Top Ten Consumer Cyclical Stocks Based On Warren Buffett – 2/26/2023

The following are the top rated Consumer Cyclical stocks according to Validea’s Patient Investor model based on the published strategy of Warren Buffett. This strategy seeks out firms with long-term, predictable profitability and low debt that trade at reasonable valuations.

POOL CORPORATION (POOL) is a large-cap growth stock in the Recreational Products industry. The rating according to our strategy based on Warren Buffett is 100{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} or above typically indicates that the strategy has some interest in the stock and a score above 90{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} typically indicates strong interest.

Company Description: Pool Corporation is a distributor of swimming pool supplies, equipment and related leisure products. The Company is a distributor of irrigation and landscape products in the United States. The Company operates sales centers in North America, Europe and Australia through its distribution networks, which includes SCP Distributors (SCP), Superior Pool Products (Superior), Horizon Distributors (Horizon), National Pool Tile (NPT) and Sun Wholesale Supply, Inc. (Sun Wholesale). The Company’s NPT network primarily serves the swimming pool market but does provide some overlap with the irrigation and landscape industries as it offers its brand of pool tile, composite pool finish products and hardscapes. It also offers virtual tools for homeowners to select and design their pool and outdoor environments, working with their chosen contractors to install these products. The Company offers its products to swimming pool remodelers and builders, specialty retailers, and among others.

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 PREDICTABILITY: PASS
DEBT SERVICE: PASS
RETURN ON EQUITY: PASS
RETURN ON TOTAL CAPITAL: PASS
FREE CASH FLOW: PASS
USE OF RETAINED EARNINGS: PASS
SHARE REPURCHASE: PASS
INITIAL RATE OF RETURN: PASS
EXPECTED RETURN: PASS

Detailed Analysis of POOL CORPORATION

POOL Guru Analysis

POOL Fundamental Analysis

TECHTRONIC INDUSTRIES CO. LTD. (ADR) (TTNDY) is a large-cap growth stock in the Appliance & Tool industry. The rating according to our strategy based on Warren Buffett is 93{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} or above typically indicates that the strategy has some interest in the stock and a score above 90{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} typically indicates strong interest.

Company Description: Techtronic Industries Co Ltd is an investment holding company principally engaged in power equipment products businesses. The Company mainly operates through two segments. The Power Equipment segment is engaged in the sales of power tools, power tool accessories, outdoor products and outdoor products accessories. Its power equipment products are sold under MILWAUKEE, EMPIRE, AEG, RYOBI, HOMELITE, Imperial Blades, and STILETTO brands, or through original equipment manufacturer (OEM) customers. The Floorcare and Cleaning segment is engaged in the sales of floor care products and floor care accessories. Its floorcare and cleaning products are sold under HOOVER, DIRT DEVIL, VAX and ORECK brands, or through OEM customers.

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 PREDICTABILITY: PASS
DEBT SERVICE: PASS
RETURN ON EQUITY: PASS
RETURN ON TOTAL CAPITAL: PASS
FREE CASH FLOW: FAIL
USE OF RETAINED EARNINGS: PASS
SHARE REPURCHASE: PASS
INITIAL RATE OF RETURN: PASS
EXPECTED RETURN: PASS

Detailed Analysis of TECHTRONIC INDUSTRIES CO. LTD. (ADR)

TTNDY Guru Analysis

TTNDY Fundamental Analysis

ILLINOIS TOOL WORKS INC. (ITW) is a large-cap growth stock in the Auto & Truck Parts industry. The rating according to our strategy based on Warren Buffett is 89{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} or above typically indicates that the strategy has some interest in the stock and a score above 90{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} typically indicates strong interest.

Company Description: Illinois Tool Works Inc. is a manufacturer of industrial products and equipment. The Company’s segments include Automotive OEM, Test & Measurement and Electronics, Welding, Construction Products, and Specialty Products. The Automotive OEM segment produces components and fasteners. The Test & Measurement and Electronics segment produce equipment, consumables, and related software for testing and measuring materials and structures, as well as equipment and consumables used in the production of electronic subassemblies and microelectronics. The Welding segment produces arc welding equipment, consumables and accessories for a wide array of industrial and commercial applications. Construction Products segment supplies engineered fastening systems and solutions. The Company’s Specialty Products segment produces beverage packaging equipment and consumables product coding and marking equipment and consumables, and appliance components and fasteners.

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 PREDICTABILITY: PASS
DEBT SERVICE: PASS
RETURN ON EQUITY: PASS
RETURN ON TOTAL CAPITAL: PASS
FREE CASH FLOW: PASS
USE OF RETAINED EARNINGS: PASS
SHARE REPURCHASE: PASS
INITIAL RATE OF RETURN: PASS
EXPECTED RETURN: PASS

Detailed Analysis of ILLINOIS TOOL WORKS INC.

ITW Guru Analysis

ITW Fundamental Analysis

FOX FACTORY HOLDING CORP (FOXF) is a mid-cap growth stock in the Auto & Truck Parts industry. The rating according to our strategy based on Warren Buffett is 86{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} or above typically indicates that the strategy has some interest in the stock and a score above 90{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} typically indicates strong interest.

Company Description: Fox Factory Holding Corp. designs, engineers, manufactures and markets performance-defining products and systems for customers worldwide. The Company’s performance-defining products and systems are used primarily on bicycles, side-by-side vehicles, on-road vehicles with and without off-road capabilities, off-road vehicles and trucks, all-terrain vehicles (ATVs), snowmobiles, specialty vehicles and applications, motorcycles and commercial trucks. Its products include 32, 34 and 36 Factory Series FLOAT FIT4, which reduces overall fork weight, provides external adjustability with its fourth-generation FOX Isolated Technology closed-cartridge damper, and includes the self-adjusting negative chamber air spring for quieter operation and ease of adjustment. X2 technology is used in its Factory Series FLOAT and DH rear shocks, which allows the rider to independently tune high- and low-speed compression and high- and low-speed rebound. Its brands include FOX, FOX RACING SHOX and RACE FACE.

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 PREDICTABILITY: PASS
DEBT SERVICE: PASS
RETURN ON EQUITY: PASS
RETURN ON TOTAL CAPITAL: FAIL
FREE CASH FLOW: PASS
USE OF RETAINED EARNINGS: PASS
SHARE REPURCHASE: PASS
INITIAL RATE OF RETURN: PASS
EXPECTED RETURN: PASS

Detailed Analysis of FOX FACTORY HOLDING CORP

FOXF Guru Analysis

FOXF Fundamental Analysis

NIKE INC (NKE) is a large-cap growth stock in the Footwear industry. The rating according to our strategy based on Warren Buffett is 85{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} or above typically indicates that the strategy has some interest in the stock and a score above 90{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} typically indicates strong interest.

Company Description: NIKE, Inc. is engaged in the designing, marketing and distributing of athletic footwear, apparel, equipment and accessories and services for sports and fitness activities. The Company’s operating segments include North America; Europe, Middle East & Africa (EMEA); Greater China; and Asia Pacific & Latin America (APLA). It sells a line of equipment and accessories under the NIKE Brand name, including bags, socks, sport balls, eyewear, timepieces, digital devices, bats, gloves, protective equipment and other equipment designed for sports activities. It also designs products specifically for the Jordan Brand and Converse. The Jordan Brand designs, distributes and licenses athletic and casual footwear, apparel and accessories predominantly focused on basketball performance and culture using the Jumpman trademark. It also designs, distributes and licenses casual sneakers, apparel and accessories under the Chuck Taylor, All Star, One Star, Star Chevron and Jack Purcell trademarks.

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 PREDICTABILITY: PASS
DEBT SERVICE: PASS
RETURN ON EQUITY: PASS
RETURN ON TOTAL CAPITAL: PASS
FREE CASH FLOW: PASS
USE OF RETAINED EARNINGS: PASS
SHARE REPURCHASE: NEUTRAL
INITIAL RATE OF RETURN: PASS
EXPECTED RETURN: FAIL

Detailed Analysis of NIKE INC

NKE Guru Analysis

NKE Fundamental Analysis

ACUITY BRANDS INC (AYI) is a mid-cap growth stock in the Furniture & Fixtures industry. The rating according to our strategy based on Warren Buffett is 79{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} or above typically indicates that the strategy has some interest in the stock and a score above 90{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} typically indicates strong interest.

Company Description: Acuity Brands, Inc. is an industrial technology company. The company uses technology to solve problems in spaces and light. Its segments include Acuity Brands Lighting and Lighting Controls (ABL) and the Intelligent Spaces Group (ISG). ABL’s portfolio of lighting solutions includes commercial, architectural, and specialty lighting in addition to lighting controls and components that can be combined to create integrated lighting control systems. It offers devices, such as luminaires that utilize light emitting diode (LED) technology designed to optimize energy efficiency and comfort for various indoor and outdoor applications. Lithonia Lighting, Holophane, Peerless, Gotham are its ABL brands. ISG offers a building management platform and location-aware applications. Its building management platform includes products for controlling heating, ventilation, and air conditioning (HVAC), lighting, shades, and building access that deliver end-to-end optimization of building systems.

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 PREDICTABILITY: PASS
DEBT SERVICE: PASS
RETURN ON EQUITY: PASS
RETURN ON TOTAL CAPITAL: PASS
FREE CASH FLOW: PASS
USE OF RETAINED EARNINGS: PASS
SHARE REPURCHASE: PASS
INITIAL RATE OF RETURN: PASS
EXPECTED RETURN: PASS

Detailed Analysis of ACUITY BRANDS INC

AYI Guru Analysis

AYI Fundamental Analysis

SNAP-ON INCORPORATED (SNA) is a large-cap value stock in the Appliance & Tool industry. The rating according to our strategy based on Warren Buffett is 79{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} or above typically indicates that the strategy has some interest in the stock and a score above 90{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} typically indicates strong interest.

Company Description: Snap-on Incorporated is a manufacturer and marketer of tools, equipment, diagnostics, repair information and systems solutions. The Company’s segments include the Commercial and Industrial Group, which serves a range of industrial and commercial customers worldwide, including customers in the aerospace, natural resources, government, power generation, transportation and technical education market segments, through direct and distributor channels; the Snap-on Tools Group, which provides vehicle service and repair technicians through its worldwide mobile tool distribution channel; Repair Systems and Information Group, which consists of business operations serving other professional vehicle repair customers worldwide, owners and managers of independent repair shops and original equipment manufacturer dealerships, through direct and distributor channels, and Financial Services, which consists of the business operations of its finance subsidiaries.

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 PREDICTABILITY: PASS
DEBT SERVICE: PASS
RETURN ON EQUITY: PASS
RETURN ON TOTAL CAPITAL: PASS
FREE CASH FLOW: PASS
USE OF RETAINED EARNINGS: PASS
SHARE REPURCHASE: PASS
INITIAL RATE OF RETURN: PASS
EXPECTED RETURN: FAIL

Detailed Analysis of SNAP-ON INCORPORATED

SNA Guru Analysis

SNA Fundamental Analysis

GENTEX CORPORATION (GNTX) is a mid-cap growth stock in the Auto & Truck Parts industry. The rating according to our strategy based on Warren Buffett is 72{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} or above typically indicates that the strategy has some interest in the stock and a score above 90{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} typically indicates strong interest.

Company Description: Gentex Corporation is a designer, developer, manufacturer, marketer, and supplier of digital vision, connected car, dimmable glass, and fire protection products. The Company provides automatic-dimming and non-automatic-dimming rearview mirrors and electronics for the automotive industry; dimmable aircraft windows for the aviation industry; and commercial smoke alarms and signaling devices for the fire protection industry. The Company’s business segment involves designing, developing, manufacturing, and marketing interior and exterior automatic-dimming automotive rearview mirrors that utilizes electrochromic technology to dim in proportion to the amount of headlight glare from trailing vehicle headlamps. Within this business segment, the Company also designs, develops and manufactures various electronics that are value added features to the interior and exterior automotive rearview mirrors as well as electronics for interior visors, overhead consoles, and other locations in the vehicle.

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 PREDICTABILITY: PASS
DEBT SERVICE: PASS
RETURN ON EQUITY: PASS
RETURN ON TOTAL CAPITAL: PASS
FREE CASH FLOW: PASS
USE OF RETAINED EARNINGS: FAIL
SHARE REPURCHASE: PASS
INITIAL RATE OF RETURN: PASS
EXPECTED RETURN: FAIL

Detailed Analysis of GENTEX CORPORATION

GNTX Guru Analysis

GNTX Fundamental Analysis

AUTOZONE INC (AZO) is a large-cap growth stock in the Auto & Truck Parts industry. The rating according to our strategy based on Warren Buffett is 68{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} or above typically indicates that the strategy has some interest in the stock and a score above 90{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} typically indicates strong interest.

Company Description: AutoZone, Inc. is a retailer and distributor of automotive replacement parts and accessories in the Americas. The Company’s Auto Parts Stores segment is the retailer and distributor of automotive parts and accessories through the Company’s, stores in the United States, Mexico, and Brazil. Each store carries an extensive product line for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. Its other segments include ALLDATA, which produces, sells and maintains diagnostic, repair and shop management software used in the automotive repair industry and E-commerce, which includes direct sales to customers through www.autozone.com for sales that are not fulfilled by local stores. The Company has approximately 6,168 stores in the United States, 703 in Mexico, and 72 in Brazil for a total store count of 6,943.

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 PREDICTABILITY: PASS
DEBT SERVICE: PASS
RETURN ON EQUITY: FAIL
RETURN ON TOTAL CAPITAL: PASS
FREE CASH FLOW: PASS
USE OF RETAINED EARNINGS: PASS
SHARE REPURCHASE: PASS
INITIAL RATE OF RETURN: PASS
EXPECTED RETURN: FAIL

Detailed Analysis of AUTOZONE INC

AZO Guru Analysis

AZO Fundamental Analysis

LKQ CORP (LKQ) is a large-cap value stock in the Auto & Truck Parts industry. The rating according to our strategy based on Warren Buffett is 68{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} or above typically indicates that the strategy has some interest in the stock and a score above 90{7b5a5d0e414f5ae9befbbfe0565391237b22ed5a572478ce6579290fab1e7f91} typically indicates strong interest.

Company Description: LKQ Corporation is a holding company, which distributes vehicle products, including replacement parts, components, and systems used in the repair and maintenance of vehicles, and specialty products and accessories, and automotive glass products. Its segments include Wholesale- North America, Europe and Specialty. North America segment offers vehicle replacement products, including sheet metal collision parts, such as doors, hoods, and fenders; bumper covers; head and tail lamps; automotive glass products, such as windshields; mirrors and grilles; wheels, and large mechanical items, such as engines and transmissions. Europe segment offers small mechanical products, such as brake pads, discs and sensors; clutches; electrical products, such as spark plugs and batteries; filters, and oil and automotive fluids. Specialty segment serves truck and off-road; speed and performance; recreational vehicles; towing; wheels, tires and performance handling; marine, and miscellaneous accessories.

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 PREDICTABILITY: PASS
DEBT SERVICE: PASS
RETURN ON EQUITY: PASS
RETURN ON TOTAL CAPITAL: FAIL
FREE CASH FLOW: PASS
USE OF RETAINED EARNINGS: PASS
SHARE REPURCHASE: PASS
INITIAL RATE OF RETURN: PASS
EXPECTED RETURN: PASS

Detailed Analysis of LKQ CORP

LKQ Guru Analysis

LKQ Fundamental Analysis

Warren Buffett Portfolio

Top Warren Buffett Stocks

About Warren Buffett: Warren Buffett is considered by many to be the greatest investor of all time. As the chairman of Berkshire Hathaway, Buffett has consistently outperformed the S&P 500 for decades, and in the process has become one of the world’s richest men. (Forbes puts his net worth at $37 billion.) Despite his fortune, Buffett is known for living a modest lifestyle, by billionaire standards. His primary residence remains the gray stucco Nebraska home he purchased for $31,500 nearly 50 years ago, according to Forbes, and his folksy Midwestern manner and penchant for simple pleasures — a cherry Coke, a good burger, and a good book are all near the top of the list — have been well-documented.

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.