Markets

Validea Peter Lynch Strategy Daily Upgrade Report - 10/3/2019

The following are today's upgrades for Validea's P/E/Growth Investor model based on the published strategy of Peter Lynch. This strategy looks for stocks trading at a reasonable price relative to earnings growth that also possess strong balance sheets.

NORFOLK SOUTHERN CORP. (NSC) is a large-cap growth stock in the Railroads industry. The rating according to our strategy based on Peter Lynch changed from 0% to 91% 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: Norfolk Southern Corporation is a holding company engaged in the rail transportation business. As of December 31, 2016, the Company operated approximately 19,500 miles of road primarily in the East and Midwest. The Company is engaged in the rail transportation of raw materials, intermediate products and finished goods primarily in the Southeast, East and Midwest. The Company, through interchange with rail carriers, to and from the rest of the United States. The Company also transports overseas freight through various Atlantic and Gulf Coast ports. It provides logistics services and offers the intermodal network in the eastern half of the United States. The Company's system reaches various manufacturing plants, electric generating facilities, mines, distribution centers and other businesses located in its service area. The Company's intermodal market group consists of shipments moving in trailers, domestic and international containers, and RoadRailer equipment.

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.

INVENTORY TO SALES: PASS
YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS
EARNINGS PER SHARE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL

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

TIMKEN CO (TKR) is a mid-cap value stock in the Misc. Capital Goods industry. The rating according to our strategy based on Peter Lynch changed from 72% to 74% 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: The Timken Company offers a portfolio of engineered bearings and power transmission products. The Timken bearing portfolio features a broad range of engineered bearing products, including tapered, spherical and cylindrical roller bearings; thrust and ball bearings; and housed units. Its power transmission products include linear motion products, gear drives, lubrication systems, belts, chain, couplings, aerospace drive system, industrial clutches and brakes, and other products. The Company's portfolio features various brands including Timken, Fafnir, Philadelphia Gear, Drives, Cone Drive, Rollon, Lovejoy and Groeneveld. The Company operates in over 35 countries.

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.

INVENTORY TO SALES: PASS P/E/GROWTH RATIO: PASS
YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS SALES AND P/E RATIO: PASS
EARNINGS PER SHARE: PASS INVENTORY TO SALES: PASS
TOTAL DEBT/EQUITY RATIO: PASS EPS GROWTH RATE: PASS
FREE CASH FLOW: NEUTRAL TOTAL DEBT/EQUITY RATIO: FAIL
NET CASH POSITION: NEUTRAL FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL

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

STRYKER CORPORATION (SYK) is a large-cap growth stock in the Medical Equipment & Supplies industry. The rating according to our strategy based on Peter Lynch changed from 0% to 74% 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: Stryker Corporation is a medical technology company. The Company offers a range of medical technologies, including orthopedic, medical and surgical, and neurotechnology and spine products. The Company's segments include Orthopaedics; MedSurg; Neurotechnology and Spine, and Corporate and Other. The Orthopaedics segment includes reconstructive (hip and knee) and trauma implant systems and other related products. The MedSurg segment includes surgical equipment and surgical navigation systems; endoscopic and communications systems; patient handling, emergency medical equipment, intensive care disposable products; reprocessed and remanufactured medical devices, and other related products. The Neurotechnology and Spine segment includes neurovascular products, spinal implant systems and other related products. The Company's products include implants, which are used in joint replacement and trauma surgeries, and other products that are used in a range of medical specialties.

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.

INVENTORY TO SALES: PASS P/E/GROWTH RATIO: PASS P/E/GROWTH RATIO: FAIL
YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS SALES AND P/E RATIO: PASS SALES AND P/E RATIO: PASS
EARNINGS PER SHARE: PASS INVENTORY TO SALES: PASS INVENTORY TO SALES: PASS
TOTAL DEBT/EQUITY RATIO: PASS EPS GROWTH RATE: PASS EPS GROWTH RATE: PASS
FREE CASH FLOW: NEUTRAL TOTAL DEBT/EQUITY RATIO: FAIL TOTAL DEBT/EQUITY RATIO: PASS
NET CASH POSITION: NEUTRAL FREE CASH FLOW: NEUTRAL FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL NET CASH POSITION: NEUTRAL

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

SIMPLY GOOD FOODS CO (SMPL) is a mid-cap growth stock in the Biotechnology & Drugs industry. The rating according to our strategy based on Peter Lynch changed from 87% to 91% 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: The Simply Good Foods Company is a holding company. The Company through its subsidiaries, is engaged in developing, marketing and selling of branded nutritional foods and snacking products. The Company offers a range of products such as nutrition bars, ready to drink (RTD) shakes, snacks and confectionery products. These all products marketed under the Atkins, SimplyProtein, Atkins Harvest Trail, Atkins Endulge, and Atkins Lift brand names. The Company offers three main types of nutrition bars including Atkins Harvest Trail Bars, Atkins Meal Bars And Atkins Snack Bars.The Company's Atkins harvest trail bars contain eight grams of protein and 9 to 10 grams of fiber, and are available in a variety of flavors, including blueberry vanilla and almond, dark chocolate sea salt caramel and vanilla fruit and nut. With 2 to 4 grams of net carbs, Atkins meal bars contain 13 to 17 grams of protein, and are available in 13 different flavors.

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.

INVENTORY TO SALES: PASS P/E/GROWTH RATIO: PASS P/E/GROWTH RATIO: FAIL P/E/GROWTH RATIO: PASS
YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS SALES AND P/E RATIO: PASS SALES AND P/E RATIO: PASS SALES AND P/E RATIO: NEUTRAL
EARNINGS PER SHARE: PASS INVENTORY TO SALES: PASS INVENTORY TO SALES: PASS INVENTORY TO SALES: PASS
TOTAL DEBT/EQUITY RATIO: PASS EPS GROWTH RATE: PASS EPS GROWTH RATE: PASS EPS GROWTH RATE: PASS
FREE CASH FLOW: NEUTRAL TOTAL DEBT/EQUITY RATIO: FAIL TOTAL DEBT/EQUITY RATIO: PASS TOTAL DEBT/EQUITY RATIO: PASS
NET CASH POSITION: NEUTRAL FREE CASH FLOW: NEUTRAL FREE CASH FLOW: NEUTRAL FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL NET CASH POSITION: NEUTRAL NET CASH POSITION: NEUTRAL

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

NASDAQ INC (NDAQ) is a large-cap growth stock in the Investment Services industry. The rating according to our strategy based on Peter Lynch changed from 0% to 91% 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: Nasdaq, Inc. (Nasdaq) is a holding company. The Company is a provider of trading, clearing, exchange technology, regulatory, securities listing, information and public company services. It manages, operates and provides its products and services through four segments: Market Services, Corporate Services, Information Services and Market Technology. Its global offerings include trading and clearing across various asset classes, trade management services, data products, financial indexes, capital formation solutions, corporate solutions, and market technology products and services. Its technology markets across the globe, supporting equity derivative trading, clearing and settlement, cash equity trading, fixed income trading and various other functions. Its Market Services segment include its equity derivative trading and clearing, cash equity trading, fixed income clearing corporation and trade management services businesses. Its Corporate Solutions business serves corporate clients.

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.

INVENTORY TO SALES: PASS P/E/GROWTH RATIO: PASS P/E/GROWTH RATIO: FAIL P/E/GROWTH RATIO: PASS YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS
YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS SALES AND P/E RATIO: PASS SALES AND P/E RATIO: PASS SALES AND P/E RATIO: NEUTRAL EARNINGS PER SHARE: PASS
EARNINGS PER SHARE: PASS INVENTORY TO SALES: PASS INVENTORY TO SALES: PASS INVENTORY TO SALES: PASS TOTAL DEBT/EQUITY RATIO: NEUTRAL
TOTAL DEBT/EQUITY RATIO: PASS EPS GROWTH RATE: PASS EPS GROWTH RATE: PASS EPS GROWTH RATE: PASS EQUITY/ASSETS RATIO: PASS
FREE CASH FLOW: NEUTRAL TOTAL DEBT/EQUITY RATIO: FAIL TOTAL DEBT/EQUITY RATIO: PASS TOTAL DEBT/EQUITY RATIO: PASS RETURN ON ASSETS: PASS
NET CASH POSITION: NEUTRAL FREE CASH FLOW: NEUTRAL FREE CASH FLOW: NEUTRAL FREE CASH FLOW: NEUTRAL FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL NET CASH POSITION: NEUTRAL NET CASH POSITION: NEUTRAL NET CASH POSITION: NEUTRAL

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

CELANESE CORPORATION (CE) is a large-cap value stock in the Chemical Manufacturing industry. The rating according to our strategy based on Peter Lynch changed from 72% to 74% 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: Celanese Corporation (Celanese) is a technology and specialty materials company. The Company's segments include Advanced Engineered Materials, Consumer Specialties, Industrial Specialties, Acetyl Intermediates and Other Activities. The Advanced Engineered Materials segment includes the Company's engineered materials business and certain affiliates. The Consumer Specialties segment includes the Company's cellulose derivatives and food ingredients businesses, which serve consumer-driven applications. The Industrial Specialties segment includes the Company's emulsion polymers and ethylene vinyl acetate (EVA) polymers businesses. The Acetyl Intermediates segment includes the Company's intermediate chemistry business, which produces and supplies acetyl products, including acetic acid, vinyl acetate monomer (VAM), acetic anhydride and acetate esters. The Company has operations in North America, Europe and Asia. As of December 31, 2016, the Company had 30 global production facilities.

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.

INVENTORY TO SALES: PASS P/E/GROWTH RATIO: PASS P/E/GROWTH RATIO: FAIL P/E/GROWTH RATIO: PASS YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS P/E/GROWTH RATIO: PASS
YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS SALES AND P/E RATIO: PASS SALES AND P/E RATIO: PASS SALES AND P/E RATIO: NEUTRAL EARNINGS PER SHARE: PASS SALES AND P/E RATIO: PASS
EARNINGS PER SHARE: PASS INVENTORY TO SALES: PASS INVENTORY TO SALES: PASS INVENTORY TO SALES: PASS TOTAL DEBT/EQUITY RATIO: NEUTRAL INVENTORY TO SALES: PASS
TOTAL DEBT/EQUITY RATIO: PASS EPS GROWTH RATE: PASS EPS GROWTH RATE: PASS EPS GROWTH RATE: PASS EQUITY/ASSETS RATIO: PASS EPS GROWTH RATE: PASS
FREE CASH FLOW: NEUTRAL TOTAL DEBT/EQUITY RATIO: FAIL TOTAL DEBT/EQUITY RATIO: PASS TOTAL DEBT/EQUITY RATIO: PASS RETURN ON ASSETS: PASS TOTAL DEBT/EQUITY RATIO: FAIL
NET CASH POSITION: NEUTRAL FREE CASH FLOW: NEUTRAL FREE CASH FLOW: NEUTRAL FREE CASH FLOW: NEUTRAL FREE CASH FLOW: NEUTRAL FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL NET CASH POSITION: NEUTRAL NET CASH POSITION: NEUTRAL NET CASH POSITION: NEUTRAL NET CASH POSITION: NEUTRAL

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

FEDERATED INVESTORS INC (FII) is a mid-cap value stock in the Investment Services industry. The rating according to our strategy based on Peter Lynch changed from 0% to 91% 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: Federated Investors, Inc. (Federated) is a provider of investment management products and related financial services. Federated operates through investment management business segment. It is engaged in sponsoring, marketing and providing investment-related services to various investment products, including mutual funds and Separate Accounts, which include separately managed accounts, institutional accounts, sub-advised funds and other managed products. It operates in one segment, the investment management business. As of December 31, 2016, Federated provided investment advisory services to 124 sponsored investment companies and other funds (Federated Funds). It markets these funds to banks, brokers and dealers and other financial intermediaries using them to meet the needs of their customers and clients, including retail investors, corporations and retirement plans. The Company offers a range of products and strategies, including money market, equity and fixed-income investments.

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.

INVENTORY TO SALES: PASS P/E/GROWTH RATIO: PASS P/E/GROWTH RATIO: FAIL P/E/GROWTH RATIO: PASS YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS P/E/GROWTH RATIO: PASS SALES: PASS
YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS SALES AND P/E RATIO: PASS SALES AND P/E RATIO: PASS SALES AND P/E RATIO: NEUTRAL EARNINGS PER SHARE: PASS SALES AND P/E RATIO: PASS YIELD COMPARED TO THE S&P 500: PASS
EARNINGS PER SHARE: PASS INVENTORY TO SALES: PASS INVENTORY TO SALES: PASS INVENTORY TO SALES: PASS TOTAL DEBT/EQUITY RATIO: NEUTRAL INVENTORY TO SALES: PASS YIELD ADJUSTED P/E/GROWTH (PEG) RATIO: PASS
TOTAL DEBT/EQUITY RATIO: PASS EPS GROWTH RATE: PASS EPS GROWTH RATE: PASS EPS GROWTH RATE: PASS EQUITY/ASSETS RATIO: PASS EPS GROWTH RATE: PASS TOTAL DEBT/EQUITY RATIO: NEUTRAL
FREE CASH FLOW: NEUTRAL TOTAL DEBT/EQUITY RATIO: FAIL TOTAL DEBT/EQUITY RATIO: PASS TOTAL DEBT/EQUITY RATIO: PASS RETURN ON ASSETS: PASS TOTAL DEBT/EQUITY RATIO: FAIL EQUITY/ASSETS RATIO: PASS
NET CASH POSITION: NEUTRAL FREE CASH FLOW: NEUTRAL FREE CASH FLOW: NEUTRAL FREE CASH FLOW: NEUTRAL FREE CASH FLOW: NEUTRAL FREE CASH FLOW: NEUTRAL RETURN ON ASSETS: PASS
NET CASH POSITION: NEUTRAL NET CASH POSITION: NEUTRAL NET CASH POSITION: NEUTRAL NET CASH POSITION: NEUTRAL NET CASH POSITION: NEUTRAL FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL

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

FIDUS INVESTMENT CORP (FDUS) is a small-cap value stock in the Investment Services industry. The rating according to our strategy based on Peter Lynch changed from 72% to 74% 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: Fidus Investment Corporation is a closed-end, non-diversified investment company. The Company provides customized debt and equity financing solutions to lower middle-market companies. The Company's investment objective is to provide attractive risk-adjusted returns by generating both current income from its debt investments and capital appreciation from its equity-related investments. The Company typically invests in mezzanine debt, which includes senior subordinated notes and junior secured loans. The Company structures some of its debt investments as senior secured or unitranche loans. The Company's equity securities typically consist of either a direct minority equity investment in common or preferred stock or membership/partnership interests of a portfolio company, or it may receive warrants to buy a minority equity interest in a portfolio company in connection with a debt investment. Its investment activities are managed by Fidus Investment Advisors, LLC, 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.

INVENTORY TO SALES: PASS P/E/GROWTH RATIO: PASS P/E/GROWTH RATIO: FAIL P/E/GROWTH RATIO: PASS YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS P/E/GROWTH RATIO: PASS SALES: PASS SALES: FAIL
YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS SALES AND P/E RATIO: PASS SALES AND P/E RATIO: PASS SALES AND P/E RATIO: NEUTRAL EARNINGS PER SHARE: PASS SALES AND P/E RATIO: PASS YIELD COMPARED TO THE S&P 500: PASS YIELD COMPARED TO THE S&P 500: PASS
EARNINGS PER SHARE: PASS INVENTORY TO SALES: PASS INVENTORY TO SALES: PASS INVENTORY TO SALES: PASS TOTAL DEBT/EQUITY RATIO: NEUTRAL INVENTORY TO SALES: PASS YIELD ADJUSTED P/E/GROWTH (PEG) RATIO: PASS YIELD ADJUSTED P/E/GROWTH (PEG) RATIO: PASS
TOTAL DEBT/EQUITY RATIO: PASS EPS GROWTH RATE: PASS EPS GROWTH RATE: PASS EPS GROWTH RATE: PASS EQUITY/ASSETS RATIO: PASS EPS GROWTH RATE: PASS TOTAL DEBT/EQUITY RATIO: NEUTRAL TOTAL DEBT/EQUITY RATIO: NEUTRAL
FREE CASH FLOW: NEUTRAL TOTAL DEBT/EQUITY RATIO: FAIL TOTAL DEBT/EQUITY RATIO: PASS TOTAL DEBT/EQUITY RATIO: PASS RETURN ON ASSETS: PASS TOTAL DEBT/EQUITY RATIO: FAIL EQUITY/ASSETS RATIO: PASS EQUITY/ASSETS RATIO: PASS
NET CASH POSITION: NEUTRAL FREE CASH FLOW: NEUTRAL FREE CASH FLOW: NEUTRAL FREE CASH FLOW: NEUTRAL FREE CASH FLOW: NEUTRAL FREE CASH FLOW: NEUTRAL RETURN ON ASSETS: PASS RETURN ON ASSETS: PASS
NET CASH POSITION: NEUTRAL NET CASH POSITION: NEUTRAL NET CASH POSITION: NEUTRAL NET CASH POSITION: NEUTRAL NET CASH POSITION: NEUTRAL FREE CASH FLOW: NEUTRAL FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL NET CASH POSITION: NEUTRAL

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

Since its inception, Validea's strategy based on Peter Lynch has returned 355.66% vs. 190.48% for the S&P 500. For more details on this strategy, click here

About Peter Lynch: Perhaps the greatest mutual fund manager of all-time, Lynch guided Fidelity Investment's Magellan Fund to a 29.2 percent average annual return from 1977 until his retirement in 1990, almost doubling the S&P 500's 15.8 percent yearly return over that time. Lynch's common sense approach and quick wit made him one of the most quoted investors on Wall Street. ("Go for a business that any idiot can run -- because sooner or later, any idiot probably is going to run it," is one of his many pearls of wisdom.) Lynch's bestseller One Up on Wall Street is something of a "stocks for the everyman/everywoman", breaking his approach down into easy-to-understand concepts.

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.