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Validea's Top Five Basic Materials Stocks Based On David Dreman - 2/24/2019


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The following are the top rated Basic Materials stocks according to Validea's Contrarian Investor model based on the published strategy of David Dreman . This contrarian strategy finds the most unpopular mid- and large-cap stocks in the market and looks for improving fundamentals.

TERNIUM SA (ADR) ( TX ) is a mid-cap value stock in the Iron & Steel industry. The rating according to our strategy based on David Dreman is 99% based on the firm's underlying fundamentals and the stock's valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Ternium S.A. is a producer of steel products. The Company produces finished and semi-finished steel products and iron ore, which are sold either directly to steel manufacturers, steel processors or end users. The Company operates through two segments: Steel and Mining. The Steel segment includes the sales of steel products and the Mining segment includes the sales of iron ore products, which are primarily inter-company. The Steel segment comprises three operating segments: Mexico, the Southern Region and Other Markets. In the steel segment, steel products include slabs, billets and round bars (steel in its basic, semi-finished state), hot-rolled coils and sheets, bars and stirrups, wire rods, cold-rolled coils and sheets, tin plate, hot dipped galvanized and electrogalvanized sheets and pre-painted sheets, steel pipes and tubular products, beams, roll-formed products, and other products. In the mining segment, iron ore is sold as concentrates (fines) and pellets.

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.

MARKET CAP:PASS
EARNINGS TREND:PASS
EPS GROWTH RATE IN THE IMMEDIATE PAST AND FUTURE:PASS
P/E RATIO:FAIL
PRICE/CASH FLOW (P/CF) RATIO:PASS
PRICE/BOOK (P/B) VALUE:PASS
PRICE/DIVIDEND (P/D) RATIO:PASS
CURRENT RATIO:PASS
PAYOUT RATIO:PASS
RETURN ON EQUITY:PASS
PRE-TAX PROFIT MARGINS:PASS
YIELD:PASS
LOOK AT THE TOTAL DEBT/EQUITY:PASS

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

COMPANHIA SIDERURGICA NACIONAL (ADR) ( SID ) is a mid-cap value stock in the Misc. Fabricated Products industry. The rating according to our strategy based on David Dreman is 83% based on the firm's underlying fundamentals and the stock's valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Companhia Siderurgica Nacional is a Brazil-based company engaged in the steel industry. The Company operates throughout the entire steel production chain, from the mining of iron ore to the production and sale of a range of steel products, including coated galvanized flat steel and tinplate. The Company operates in five segments: Steel, Mining, Cement, Logistics and Energy. The Steel segment focuses on the production, distribution and sale of flat steel, long steel, metallic containers and galvanized steel, with operations in Brazil, the United States, Portugal and Germany. The Mining segment encompasses the activities of iron ore and tin mining. The Cement segment is responsible for the cement production, distribution and sale operations. The Logistics segment manages port terminal for containers, as well as railway networks. The Energy segment includes generation of electric power. The Company is controlled by Vicunha Acos SA.

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.

MARKET CAP:PASS
EARNINGS TREND:PASS
EPS GROWTH RATE IN THE IMMEDIATE PAST AND FUTURE:PASS
P/E RATIO:PASS
PRICE/CASH FLOW (P/CF) RATIO:PASS
PRICE/BOOK (P/B) VALUE:FAIL
PRICE/DIVIDEND (P/D) RATIO:FAIL
CURRENT RATIO:FAIL
PAYOUT RATIO:PASS
RETURN ON EQUITY:PASS
PRE-TAX PROFIT MARGINS:PASS
YIELD:FAIL
LOOK AT THE TOTAL DEBT/EQUITY:FAIL

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

CLEVELAND-CLIFFS INC ( CLF ) is a mid-cap value stock in the Metal Mining industry. The rating according to our strategy based on David Dreman is 76% based on the firm's underlying fundamentals and the stock's valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Cleveland-Cliffs Inc, formerly Cliffs Natural Resources Inc., is a mining and natural resources company. The Company is a supplier of iron ore pellets to the North American steel industry from its mines and pellet plants located in Michigan and Minnesota. The Company operates through its U.S. Iron Ore. The Company is a producer of iron ore pellets, primarily selling production from U.S. Iron Ore to integrated steel companies in the United States, Canada and Mexico. In the United States, the Company owned four operational iron ore mines and one indefinitely idled mine.

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.

MARKET CAP:PASS
EARNINGS TREND:PASS
EPS GROWTH RATE IN THE IMMEDIATE PAST AND FUTURE:FAIL
P/E RATIO:PASS
PRICE/CASH FLOW (P/CF) RATIO:PASS
PRICE/BOOK (P/B) VALUE:FAIL
PRICE/DIVIDEND (P/D) RATIO:FAIL
CURRENT RATIO:PASS
PAYOUT RATIO:FAIL
RETURN ON EQUITY:PASS
PRE-TAX PROFIT MARGINS:PASS
YIELD:FAIL
LOOK AT THE TOTAL DEBT/EQUITY:FAIL

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

LYONDELLBASELL INDUSTRIES NV ( LYB ) is a large-cap value stock in the Chemical Manufacturing industry. The rating according to our strategy based on David Dreman is 76% based on the firm's underlying fundamentals and the stock's valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: LyondellBasell Industries N.V. is a plastics, chemicals and refining company. The Company operates through its Advanced Polymer Solutions segment. It produces olefins and polyethylene ( PE ) and polypropylene (PP), high density polyethylene (HDPE), low density polyethylene (LDPE) and linear low density polyethylene (LLDPE). It produces PP homopolymers, PP impact copolymers and PP random copolymers. PP compounds are produced from blends of polyolefins and additives and are sold to the automotive and home appliances industries. Its engineered composites are lightweight, materials that are used in infrastructure, aerospace and automotive applications such as headlamps. It also manufactures powders, which is a specialty particle materials used in coatings, rotational molding, toll compounding and other technical applications. Masterbatches is a coloring and additive materials used in the production of paper, paint and plastic goods around the world.

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.

MARKET CAP:PASS
EARNINGS TREND:FAIL
EPS GROWTH RATE IN THE IMMEDIATE PAST AND FUTURE:FAIL
P/E RATIO:PASS
PRICE/CASH FLOW (P/CF) RATIO:PASS
PRICE/BOOK (P/B) VALUE:FAIL
PRICE/DIVIDEND (P/D) RATIO:FAIL
CURRENT RATIO:PASS
PAYOUT RATIO:FAIL
RETURN ON EQUITY:PASS
PRE-TAX PROFIT MARGINS:PASS
YIELD:PASS
LOOK AT THE TOTAL DEBT/EQUITY:FAIL

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

MERCER INTERNATIONAL INC. (MERC) is a small-cap value stock in the Paper & Paper Products industry. The rating according to our strategy based on David Dreman is 76% based on the firm's underlying fundamentals and the stock's valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Mercer International Inc. is a producer of northern bleached softwood kraft (NBSK) pulp, which is pulp that is sold on the open market. The Company also produces and sells tall oil, a by-product of its production process, which is used as both a chemical additive and as a green energy source. It produces and sells NBSK pulp, which is a bleached kraft pulp manufactured using northern softwood. As of December 31, 2016, the Company operated two mills in Eastern Germany and one mill in Western Canada. As of December 31, 2016, its three NBSK pulp mills had consolidated annual production capacity of approximately 1.5 million air-dried metric tons (ADMTs) of NBSK pulp and were capable of generating 305 megawatts (MW) of electricity. Additionally, its German mills generate tall oil from black liquor, which is sold to third parties for use in various applications, including bio-fuels. The Company's mills generate and sell energy to regional utilities.

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.

MARKET CAP:FAIL
EARNINGS TREND:PASS
EPS GROWTH RATE IN THE IMMEDIATE PAST AND FUTURE:PASS
P/E RATIO:PASS
PRICE/CASH FLOW (P/CF) RATIO:PASS
PRICE/BOOK (P/B) VALUE:FAIL
PRICE/DIVIDEND (P/D) RATIO:FAIL
CURRENT RATIO:PASS
PAYOUT RATIO:PASS
RETURN ON EQUITY:PASS
PRE-TAX PROFIT MARGINS:PASS
YIELD:FAIL
LOOK AT THE TOTAL DEBT/EQUITY:FAIL

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

Since its inception, Validea's strategy based on David Dreman has returned 106.46% vs. 180.93% for the S&P 500. For more details on this strategy, click here

About David Dreman : Dreman's Kemper-Dreman High Return Fund was one of the best-performing mutual funds ever, ranking as the best of 255 funds in its peer groups from 1988 to 1998, according to Lipper Analytical Services. At the time Dreman published Contrarian Investment Strategies: The Next Generation, the fund had been ranked number one in more time periods than any of the 3,175 funds in Lipper's database. In addition to managing money, Dreman is also a longtime Forbes magazine columnist.

About Validea : Validea is an investment research service 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.





This article appears in: Investing , Stocks
Referenced Symbols: TX , SID , CLF , LYB , PE




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