Markets

Validea Peter Lynch Strategy Daily Upgrade Report - 11/7/2019

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.

CALIFORNIA WATER SERVICE GROUP (CWT) is a mid-cap growth stock in the Water Utilities 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: California Water Service Group is a holding company. The Company operates through the supply and distribution of water and providing water-related utility services segment. The Company, through its subsidiaries, provides non-regulated services and non-regulated services to private companies and municipalities. The bulk of the business consists of the production, purchase, storage, treatment, testing, distribution and sale of water for domestic, industrial, public and irrigation uses, and for fire protection. It also provides non-regulated water-related services. The non-regulated services include water system operation, billing and meter reading services. Non-regulated operations also include the lease of communication antenna sites, lab services and promotion of other non-regulated services. The Company under its non-regulated contract arrangements, operates municipally owned water systems, privately owned water and recycled water distribution systems.

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.

P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
INVENTORY TO SALES: PASS
EPS GROWTH RATE: 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

M&T BANK CORPORATION (MTB) is a large-cap value stock in the Regional Banks 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: M&T Bank Corporation (M&T) is a bank holding company. As of December 31, 2016, M&T had two bank subsidiaries: Manufacturers and Traders Trust Company (M&T Bank) and Wilmington Trust, National Association (Wilmington Trust, N.A.). The Company, along with its subsidiaries, offers a range of retail and commercial banking, trust and wealth management, and investment services. Its segments are Business Banking, which provides a range of services to small businesses and professionals; Commercial Banking, which provides a range of credit products and banking services; Commercial Real Estate, which provides credit and deposit services; Discretionary Portfolio, which includes investment and trading account securities, residential real estate loans and other assets, and short-term and long-term borrowed funds; Residential Mortgage Banking, which originates and services residential mortgage loans, and Retail Banking, which services to consumers through various delivery channels.

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.

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

VIRTU FINANCIAL INC (VIRT) is a mid-cap growth stock in the Investment Services 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: Virtu Financial, Inc. is a holding company. The Company is a technology-enabled market maker and liquidity provider to the financial markets across the world. It is engaged in buying or selling a range of securities and other financial instruments and earning small bid/ask spreads across various transactions. It has a single, multi-asset, multi-currency technology platform, through which it provides quotations to buyers and sellers in equities, commodities, currencies, options, fixed income and other securities on exchanges, markets and liquidity pools in various countries around the world. It makes markets in a range of different assets classes, such as Americas Equities; Europe, the Middle East and Africa (EMEA) Equities; Asia Pacific (APAC) Equities; Global Commodities; Global Currencies, and Options, Fixed Income and Other Securities. It makes markets for global banks, brokers and other intermediaries, and indirectly provides services to retail and institutional investors.

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.

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

ALARMCOM HLDG INC (ALRM) is a mid-cap growth stock in the Communications Equipment 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: Alarm.com Holdings, Inc. is a platform solution for the connected property. The Company offers a suite of cloud-based solutions for the smart home and business, including interactive security, video monitoring, intelligent automation and energy management. The Company operates through two segments: Alarm.com and Other. The Alarm.com segment represents its cloud-based platform for the intelligently connected property solutions. The Other segment is focused on researching and developing home and commercial automation and energy management products and services for sale in adjacent markets. Its solutions are used in both smart homes and businesses. It is involved in designing and manufacturing various types of hardware that enable its solutions, including cellular communication modules, image sensor, video cameras and alarm.com smart thermostat. The Company offers a suite of high definition, Internet protocol (IP), video cameras to enable its video monitoring services.

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.

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

CNO FINANCIAL GROUP INC (CNO) is a mid-cap growth stock in the Insurance (Life) industry. The rating according to our strategy based on Peter Lynch changed from 0% to 81% 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: CNO Financial Group, Inc. is a holding company for a group of insurance companies operating throughout the United States that develops, markets and administers health insurance, annuity, individual life insurance and other insurance products. The Company's segments include Bankers Life, Washington National and Colonial Penn. It sells health insurance, annuity, individual life insurance and other insurance products through three primary distribution channels: career agents, independent producers and direct marketing. The Company offers products in various categories, including health, annuities and life insurance. The health products include Medicare supplement, long-term care, prescription drug plan and Medicare advantage, supplemental health products and other health products. The annuities products include fixed index annuities and other fixed interest annuities. The life insurance products include interest-sensitive life products and traditional life products.

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.

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

Since its inception, Validea's strategy based on Peter Lynch has returned 396.01% vs. 209.51% 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.