3 Stocks With Magic PEG Ratios

Party City operates 730 corporate stores and 183 franchised stores for a total store count of 913.

Party City isn't seeing the consumer slowdown like other retailers. Party goods normally see steady demand and the company said they are "generally unaffected by economic conditions."

Apparently, if you're going to throw a 40th birthday party, you're going to do it no matter what.

Revenue jumped 4.8% in the second quarter with comparable sales up 3.8% driven by strong summer/graduation sales and larger than average purchases.

Additionally, Easter was shifted to the first quarter this year which boosted the quarter as the company shuts its stores on Easter Sunday.

Earnings are expected to rise 21% this year and 12% again next year.

Magic PEG ratio = 1.00
P/S ratio = 0.9
Zacks Rank #2 (Buy)

3. Tower International, Inc. (TOWR - Snapshot Report)

Tower makes engineered automotive structural metal components and assemblies including frames and chassis structures for cars and trucks.

It has a global business although it intends to sell its remaining business interests in China and Brazil shortly.

The company is benefiting from higher US truck demand. In the second quarter earnings report, it maintained its full year guidance.

Still, investors are worried about North American auto weakness and that there is peak auto. That's why the shares are so cheap.

Analysts aren't as pessimistic, as they see another 13% earnings growth in 2017.

Magic PEG ratio = 0.7
P/S ratio = 0.2
Zacks Rank #2 (Buy)

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Disclosure: Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the  more

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