• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing
  3. / Transportation

6 Picks for Main Street Investors

Stocks that 'Joe Six-Pack' might be interested in.
By JOHN REESE
Mar 09, 2017 | 08:00 AM EST
Stocks quotes in this article: MO, GM, CHRW, PAG, LCII, LAD

President Trump's promise to "Make America great again" -- by creating jobs, pushing for tax reforms and deregulation, and renegotiating trade agreements with a view toward strengthening domestic businesses -- has brought Main Street back into focus.

According to the 2017 Business Leaders Outlook survey from JPMorgan Chase, optimism is at its highest level (and pessimism at its lowest) since 2010. Michael Hartnett, chief investment strategist for Bank of America Merrill Lynch, recently told WealthTrack's Consuelo Mack that the past decade of slow growth, low interest rates and nonexistent inflation was "great for what the rich people buy and own." But now, he says, we are in a "new era" where conditions are rotating in favor of mainstream-type assets that appeal more to the hypothetical "Joe Six-Pack" investor who is focused on domestic businesses.

This shift even has advertisers and marketers rethinking how they hire, collect data and target consumers, according to a Wall Street Journal article from last November. The wave of support that middle-American voters gave Trump suggests that perhaps those firms trying to gauge consumer preferences are a bit out of touch, and that the demographic they should be targeting is the "rural, economically frustrated, elite-distrusting, anti-globalization voters."

Even if these folks aren't typically the first in line at Starbucks, they would probably gladly join the boycott of the coffee roaster that followed CEO Howard Schultz's promise to hire 10,000 refugees over the next five years in the 75 countries where Starbucks operates.

There are other businesses, however, that stand to benefit from the Joe Six-Pack, everyman mindset that is gaining a head of steam in the current economic and political landscape. Using stock screening models inspired by some of the most celebrated and successful investors of all time, I have identified the following six stocks that might fit nicely into Joe Six-Pack's cooler:

Altria (MO) , through its subsidiaries including Philip Morris USA Inc., makes and sells cigarettes and other tobacco products. The company scores strongly under our Warren Buffett-inspired screening model due to its earnings predictability and 10-year average earnings per share of 17%. Debt could be retired by earnings in less than two years, a requirement under this model, and management's use of retained earnings reflects a stellar return of 67.1%.

General Motors (GM) earns a perfect score under our James O'Shaughnessy-based investment methodology due to its size (market cap of $56.56 billion) and exceptional cash flow per share of $13.11 (versus the market mean of $1.55). Trailing 12-month sales of $166.38 billion exceed the market mean by more than 1.5 times, and the dividend yield of 4.03% is a plus.

C.H. Robinsons Worldwide (CHRW) is a third-party logistics company that provides freight transportation services and logistics solutions. Our Buffett-based model likes the company's ability to pay off debt with earnings in about one year as well as its 10-year average return-on-equity of 37% (versus the minimum requirement of 15%). The company also shows predictable earnings, a plus under this model.

Penske Automotive (PAG) operates automotive and commercial vehicle dealerships in the U.S. and Western Europe. Our O'Shaughnessy-inspired stock screen likes the company's price-sales ratio of 0.21, well below the maximum allowed of 1.5, as well as its persistent and consistently expanding earnings per share over the last five years. Our investment strategy based on the tenets of John Neff favors the company's historical EPS growth (based on three-, four- and five-year averages) of 15.3%, which falls comfortably in the preferred range of between 7% and 20%.

LCI Industries (LCII) , through its subsidiaries, supplies components for the manufacturers of recreational vehicles and adjacent industries. Our Peter Lynch-based stock screen favors the company's price-earnings ratio to growth in earnings per share (PEG ratio) of 0.65 (versus the maximum allowed of 1.0), and gives high marks to the company's extremely low leverage (debt-to-equity of 9.08%).

Lithia Motors (LAD) is a retailer of new and used vehicles and services. Our Martin Zweig-inspired investment strategy likes LAD's price-earnings ratio of 12.44 as compared to the current average market PE of 18. This model likes to see a company's revenue growth be on par with earnings growth, and the company meets this criterion with revenue growth of 27.52% and earnings growth of 29.74%.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Reese was long GM and LCII, although positions may change at any time.

TAGS: Investing | U.S. Equity | Consumer Discretionary | Transportation | Consumer | Stocks

More from Transportation

American Airlines Is Having Trouble Taking Off Ahead of Earnings

Bruce Kamich
Jan 25, 2023 2:18 PM EST

It looks like the airline will have to return to the gate, so trade carefully.

I'm Tearing Up My Southwest Boarding Pass Ahead of Earnings

Bruce Kamich
Jan 25, 2023 11:45 AM EST

The airline is set to report its latest quarterly numbers Thursday.

Will J.B. Hunt Keep on Truckin' to the Upside?

Bruce Kamich
Jan 18, 2023 2:35 PM EST

Let's see what the charts are indicating.

United Airlines Could Bump Some Traders From Their Seats

Bruce Kamich
Jan 18, 2023 1:58 PM EST

A serious top reversal looks to be in play now.

Bearish Bets: 3 Stocks You Should Consider Shorting This Week

Bob Lang
Jan 15, 2023 10:30 AM EST

These recently downgraded names are displaying both quantitative and technical deterioration.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 11:48 AM EST REAL MONEY

    Watch Doug Kass on the Daily Rundown!

    In today's Action Alerts PLUS Daily Rundown, Doug ...
  • 11:03 AM EST JAMES "REV SHARK" DEPORRE

    This Weekend On Real Money

    It's time to start using this power to build great...
  • 03:06 PM EST BOB LANG

    LEAPS Webinar

    This week, I offered a free webinar session talkin...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2023 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login