Markets

Validea Peter Lynch Strategy Daily Upgrade Report - 11/9/2019

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.

MODINE MANUFACTURING CO. (MOD) is a small-cap value stock in the Auto & Truck Parts 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: Modine Manufacturing Company, specializes in providing thermal management solutions. It is a provider of engineered heat transfer systems and heat transfer components for use in on-highway and off-highway original equipment manufacturer (OEM) vehicular applications, and for sale into an array of building, industrial and refrigeration markets. Its products include radiators and radiator cores, condensers, charge air coolers, heat-transfer modules and assemblies, coolers, ventilating and air conditioning (HVAC) equipment, and coils. Its segments are Vehicular Thermal Solutions (VTS), Commercial and Industrial Solutions (CIS) and Building HVAC (BHVAC). Its VTS segment provides engineered heat transfer systems and components for use in on- and off-highway original equipment. Its CIS Segment provides thermal management products, including customized coils and coolers. Its BHVAC segment consists of building heating, ventilating and air conditioning products throughout 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.

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

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

NUCOR CORPORATION (NUE) is a large-cap value stock in the Iron & Steel 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: Nucor Corporation (Nucor) manufactures steel and steel products. The Company produces direct reduced iron (DRI) for use in its steel mills. It operates in three segments: steel mills, steel products and raw materials. The steel mills segment produces and distributes sheet steel (hot-rolled, cold-rolled and galvanized), plate steel, structural steel (wide-flange beams, beam blanks, H-piling and sheet piling) and bar steel (blooms, billets, concrete reinforcing bar, merchant bar, wire rod and special bar quality). The steel products segment produces steel joists and joist girders, steel deck, fabricated concrete reinforcing steel and cold finished steel. The raw materials produces DRI; brokers ferrous and nonferrous metals, pig iron, HBI and DRI; supplies ferro-alloys, and processes ferrous and nonferrous scrap metal. It also processes ferrous and nonferrous metals and brokers ferrous and nonferrous metals, pig iron, hot briquetted iron (HBI) and DRI.

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: FAIL EPS GROWTH RATE: FAIL
FREE CASH FLOW: NEUTRAL TOTAL DEBT/EQUITY RATIO: PASS
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

CNH INDUSTRIAL NV (CNHI) is a large-cap value stock in the Constr. & Agric. Machinery 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: CNH Industrial N.V. is a capital goods company. The Company is engaged in the design, production, marketing, sale and financing of agricultural and construction equipment, commercial vehicles, buses and specialty vehicles for firefighting, defense and other uses, as well as engines, transmissions and axles for vehicles and engines under marine and power generation applications. Its segments include Agricultural Equipment, which designs, manufactures and distributes farm machinery and implements; Construction Equipment, which designs, manufactures and distributes construction equipment; Commercial Vehicles, which designs, produces and sells a range of light, medium and heavy vehicles for the transportation and distribution of goods; Powertrain, which designs, manufactures and offers a range of propulsion and transmission systems, and axles for on- and off-road applications, and Financial Services, which offers a range of financial services to dealers and customers.

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: PASS
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: FAIL EPS GROWTH RATE: FAIL EPS GROWTH RATE: PASS
FREE CASH FLOW: NEUTRAL TOTAL DEBT/EQUITY RATIO: PASS TOTAL DEBT/EQUITY RATIO: FAIL
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

NATIONAL BANK HOLDINGS CORP (NBHC) is a small-cap value stock in the Regional Banks 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: National Bank Holdings Corporation is a bank holding company. The Company's primary operations are conducted through its subsidiary, NBH Bank (the Bank), through which it provides a range of banking products to both commercial and consumer clients. Through NBH Bank, it operates under the brand names: Bank Midwest in Kansas and Missouri; Community Banks of Colorado in Colorado, and Hillcrest Bank in Texas. In addition to traditional banking activities, it provides an array of treasury management solutions to its clients, including online and mobile banking, wire transfers, automated clearing house services, electronic bill payment, lock box services, remote deposit capture services, merchant processing services, cash vault, controlled disbursements, positive pay and other auxiliary services (including account reconciliation, collections, repurchase accounts, zero balance accounts and sweep accounts).

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: 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 INVENTORY TO SALES: PASS INVENTORY TO SALES: PASS EPS GROWTH RATE: FAIL
TOTAL DEBT/EQUITY RATIO: FAIL EPS GROWTH RATE: FAIL EPS GROWTH RATE: PASS TOTAL DEBT/EQUITY RATIO: NEUTRAL
FREE CASH FLOW: NEUTRAL TOTAL DEBT/EQUITY RATIO: PASS TOTAL DEBT/EQUITY RATIO: FAIL EQUITY/ASSETS RATIO: PASS
NET CASH POSITION: NEUTRAL 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

BANK OF NEW YORK MELLON CORP (BK) is a large-cap value stock in the Regional Banks industry. The rating according to our strategy based on Peter Lynch changed from 15% to 100% 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 Bank of New York Mellon Corporation is a global investments company, which is focused on helping its clients manage and service their financial assets throughout the investment lifecycle. It provides financial services for institutions, corporations or individual investors. It allows clients to create, trade, hold, manage, service, distribute or restructure investments. It delivers Investment Management and Investment Services in 35 countries. It also has an Other segment, which includes the leasing portfolio, corporate treasury activities, derivatives and other trading, corporate and bank-owned life insurance and renewable energy investments, and business exits. As of September 30, 2018, the Company had $34.5 trillion in assets under custody and/or administration and $1.8 trillion in assets under management. It offers a range of actively managed equity and fixed income. It offers asset servicing, clearing services, issuer services and treasury services to its 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: PASS 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 EPS GROWTH RATE: FAIL TOTAL DEBT/EQUITY RATIO: NEUTRAL
TOTAL DEBT/EQUITY RATIO: FAIL EPS GROWTH RATE: FAIL EPS GROWTH RATE: PASS TOTAL DEBT/EQUITY RATIO: NEUTRAL EQUITY/ASSETS RATIO: PASS
FREE CASH FLOW: NEUTRAL TOTAL DEBT/EQUITY RATIO: PASS TOTAL DEBT/EQUITY RATIO: FAIL EQUITY/ASSETS RATIO: PASS RETURN ON ASSETS: PASS
NET CASH POSITION: NEUTRAL 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: BONUS PASS
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 398.49% vs. 211.15% 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.