Markets

Validea David Dreman Strategy Daily Upgrade Report - 5/3/2019

The following are today's upgrades for 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.

ARES CAPITAL CORPORATION (ARCC) is a mid-cap value stock in the Misc. Financial Services industry. The rating according to our strategy based on David Dreman changed from 76% to 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: Ares Capital Corporation is a specialty finance company. The Company operates as a closed-end, non-diversified management investment company. The Company's investment objective is to generate both current income and capital appreciation through debt and equity investments. It invests primarily in the United States middle-market companies. It may from time to time invest in larger or smaller (in particular, for investments in early-stage and/or venture capital-backed) companies. It invests primarily in first lien senior secured loans (including unitranche loans, which are loans that combine both senior and mezzanine debt, generally in a first lien position), second lien senior secured loans, and mezzanine debt, which in some cases includes an equity component. It invests in various industries, such as automotive services, business services, consumer products, and containers and packaging. Ares Capital Management LLC serves as its investment advisor.

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: FAIL
PRICE/BOOK (P/B) VALUE: FAIL
PRICE/DIVIDEND (P/D) RATIO: PASS
PAYOUT RATIO: PASS
RETURN ON EQUITY: FAIL
PRE-TAX PROFIT MARGINS: PASS
YIELD: PASS

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

AERCAP HOLDINGS N.V. (AER) is a mid-cap value stock in the Rental & Leasing industry. The rating according to our strategy based on David Dreman changed from 63% to 70% 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: AerCap Holdings N.V. is an independent aircraft leasing company. The Company focuses on acquiring in-demand aircraft, funding them, hedging interest rate risk and using its platform to deploy these assets. It operates its business on a global basis, leasing aircraft to customers in various geographical regions. The Company is engaged in leasing, financing, sales and management of commercial aircraft and engines. It owned 1,022 aircraft, managed 95 aircraft and had approximately 420 new aircraft on order, which included 204 Airbus A320neo Family aircraft, 109 Boeing 737MAX aircraft, 50 Embraer E-Jets E2 aircraft, 38 Boeing 787 aircraft and 19 Airbus A350 aircraft, as of December 31, 2016. As of December 31, 2016, its owned and managed aircraft were leased to approximately 200 customers in approximately 80 countries. AeroTurbine, Inc. is the subsidiary of the Company.

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

SANTANDER CONSUMER USA HOLDINGS INC (SC) is a mid-cap value stock in the Consumer Financial Services industry. The rating according to our strategy based on David Dreman changed from 69% to 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: Santander Consumer USA Holdings Inc. is the holding company for Santander Consumer USA Inc., and subsidiaries, a consumer finance company focused on vehicle finance and third party servicing. The Company operates through Consumer Finance segment. Its Consumer Finance business is focused on vehicle financial products and services, including retail installment contracts, vehicle leases, and dealer loans, as well as financial products and services related to motorcycles, recreational vehicles (RVs), and marine vehicles. It also includes its personal loan and point-of-sale financing operations. The Company's primary business is the indirect origination and securitization of retail installment contracts, principally through manufacturer-franchised dealers in connection with their sale of new and used vehicles to retail consumers. The Company offers auto financing products and services to Fiat Chrysler Automobiles US LLC (FCA) customers and dealers under the Chrysler Capital brand.

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

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

MURPHY OIL CORPORATION (MUR) is a mid-cap growth stock in the Oil & Gas Operations industry. The rating according to our strategy based on David Dreman changed from 61% to 69% 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: Murphy Oil Corporation (Murphy) is an oil and gas exploration and production company. The Company's exploration and production business explores for and produces crude oil, natural gas and natural gas liquids across the world. Its exploration and production activities are subdivided into four geographic segments: the United States, Canada, Malaysia and all other countries. It explores for and produces crude oil, natural gas and natural gas liquids around the world. This business maintains upstream operating offices in several locations around the world, including Houston, Texas, Calgary, Alberta, and Kuala Lumpur, Malaysia. As of December 31, 2016, Murphy's principal exploration and production activities were conducted in the United States by Murphy Exploration & Production Company-USA (Murphy Expro USA), in Malaysia, Australia, Brunei, and Vietnam by Murphy Exploration & Production Company-International (Murphy Expro International) and its subsidiaries, and in Western Canada.

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 MARKET CAP: PASS MARKET CAP: PASS MARKET CAP: PASS
EARNINGS TREND: PASS EARNINGS TREND: PASS EARNINGS TREND: PASS EARNINGS TREND: FAIL
EPS GROWTH RATE IN THE IMMEDIATE PAST AND FUTURE: FAIL EPS GROWTH RATE IN THE IMMEDIATE PAST AND FUTURE: FAIL EPS GROWTH RATE IN THE IMMEDIATE PAST AND FUTURE: PASS EPS GROWTH RATE IN THE IMMEDIATE PAST AND FUTURE: PASS
P/E RATIO: PASS P/E RATIO: PASS P/E RATIO: PASS P/E RATIO: FAIL
PRICE/CASH FLOW (P/CF) RATIO: FAIL PRICE/CASH FLOW (P/CF) RATIO: PASS PRICE/CASH FLOW (P/CF) RATIO: PASS PRICE/CASH FLOW (P/CF) RATIO: PASS
PRICE/BOOK (P/B) VALUE: FAIL PRICE/BOOK (P/B) VALUE: PASS PRICE/BOOK (P/B) VALUE: FAIL PRICE/BOOK (P/B) VALUE: PASS
PRICE/DIVIDEND (P/D) RATIO: PASS PRICE/DIVIDEND (P/D) RATIO: FAIL PRICE/DIVIDEND (P/D) RATIO: FAIL PRICE/DIVIDEND (P/D) RATIO: FAIL
PAYOUT RATIO: PASS CURRENT RATIO: FAIL PAYOUT RATIO: FAIL CURRENT RATIO: FAIL
RETURN ON EQUITY: FAIL PAYOUT RATIO: PASS RETURN ON EQUITY: FAIL PAYOUT RATIO: FAIL
PRE-TAX PROFIT MARGINS: PASS RETURN ON EQUITY: FAIL PRE-TAX PROFIT MARGINS: PASS RETURN ON EQUITY: FAIL
YIELD: PASS PRE-TAX PROFIT MARGINS: PASS YIELD: PASS PRE-TAX PROFIT MARGINS: PASS
YIELD: FAIL YIELD: PASS
LOOK AT THE TOTAL DEBT/EQUITY: 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 103.50% vs. 193.49% 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.