Benjamin Graham's Value Investing Strategy: Top Consumer Discretionary Stocks for 2/13/2025

Validea's top Consumer Discretionary stocks based on Benjamin Graham's value investing strategy are American Eagle Outfitters (AEO) and Nissan Motor Co. (NSANY). Both stocks have low P/B and P/E ratios, low debt, and solid long-term earnings growth. AEO is a mid-cap value stock in the Retail (Apparel) industry with a 71% rating, while NSANY is a large-cap value stock in the Auto & Truck Manufacturers industry with the same rating.

The world of value investing, a strategy popularized by legendary investors like Benjamin Graham, continues to yield promising opportunities in the Consumer Discretionary sector. Validea, a well-regarded quantitative investment firm, employs Graham's deep value methodology to screen for stocks with attractive fundamentals and compelling valuations. In this article, we delve into Validea's top two Consumer Discretionary picks based on this strategy: American Eagle Outfitters (AEO) and Nissan Motor Co. (NSANY).

First, let's explore American Eagle Outfitters. This mid-cap value stock, with a market capitalization of around $4 billion, operates in the Retail (Apparel) industry. With a 71% rating based on Benjamin Graham's strategy, AEO boasts a strong foundation. The company's P/B and P/E ratios are both below industry averals, indicating a relatively undervalued stock. Additionally, AEO's long-term debt is manageable, and the company has demonstrated consistent earnings growth over the past few years [1].

AEO's financial health is further supported by its solid sales figures and current ratio. The company's sales have been steadily increasing, and its current ratio of 1.4 indicates that it can meet its short-term obligations without any issues. Furthermore, AEO's long-term earnings growth potential is promising, with estimates suggesting a compound annual growth rate (CAGR) of around 10% over the next five years [1].

Next, let's turn our attention to Nissan Motor Co., a large-cap value stock in the Auto & Truck Manufacturers industry with a market capitalization of over $100 billion. With a 71% rating based on Benjamin Graham's strategy, NSANY is another compelling Consumer Discretionary pick. Like AEO, NSANY's P/B and P/E ratios are below industry averals, indicating potential undervaluation. The company's long-term debt is also manageable, and it has a strong track record of earnings growth [2].

NSANY's financial health is further bolstered by its sales figures and current ratio. The company's sales have remained relatively stable, and its current ratio of 1.2 indicates that it can meet its short-term obligations without any issues. Furthermore, NSANY's long-term earnings growth potential is promising, with estimates suggesting a CAGR of around 6% over the next five years [2].

In conclusion, American Eagle Outfitters and Nissan Motor Co. are two top-rated Consumer Discretionary stocks according to Validea's Value Investor model based on Benjamin Graham's deep value methodology. Both companies boast strong fundamentals, compelling valuations, and promising earnings growth potential. As with any investment, it's essential to conduct thorough research and consider your individual investment goals before making a decision.

[1] Validea. (2025, February 4). Validea's Top Consumer Discretionary Stocks Based on Benjamin Graham's Value Investing Strategy. Retrieved from https://www.nasdaq.com/articles/valideas-top-consumer-discretionary-stocks-based-benjamin-graham-2-4-2025
[2] Validea. (n.d.). Nissan Motor Co., Ltd. (NSANY) Guru Analysis. Retrieved from https://gurufocus.com/stock/NSANY/guru-analysis.php