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 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: 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: | FAIL |
| RETURN ON EQUITY: | PASS |
| PRE-TAX PROFIT MARGINS: | PASS |
| YIELD: | PASS |
| LOOK AT THE TOTAL DEBT/EQUITY: | PASS |
Detailed Analysis of TERNIUM SA (ADR)
SIBANYE STILLWATER LTD (ADR) (SBSW) is a large-cap value stock in the Metal Mining industry. The rating according to our strategy based on David Dreman is 90% 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: Sibanye-Stillwater Limited is a mining and metals processing company. The Company offers mining and processing operations and projects and investments across five continents. It is the primary producer of platinum, palladium, rhodium and gold. It produces other platinum group metals (PGMs), such as iridium and ruthenium, along with chrome, copper and nickel as by-products. It provides a portfolio of PGM operations in the United States (US), South Africa, and Zimbabwe; gold operations and projects in South Africa, and copper, gold and PGM exploration properties in North and South America. The Company's gold project in the Southern Africa region includes Beatrix, Cooke, Driefontein, Kloof, RDRGOLD, and Rand Refinery. Its Southern Africa PGM projects include Kroondal, Rustenburg, Mimosa, Marikana and Platinum Mile. Its PGM project in the Americas region includes Stillwater & East Boulder and Columbus Metallurgical Complex. It also offers a portfolio in green metal projects and operations.
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: | FAIL |
| PRICE/CASH FLOW (P/CF) RATIO: | PASS |
| PRICE/BOOK (P/B) VALUE: | FAIL |
| 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 |
Detailed Analysis of SIBANYE STILLWATER LTD (ADR)
GERDAU SA (ADR) (GGB) is a mid-cap value stock in the Iron & Steel 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: Gerdau SA is a Brazil-based manufacturer of steel products. The Company is engaged in the production and commercialization of steel products in general, through its mills located in Argentina, Brazil, Canada, Colombia, the United States, Mexico, Peru, the Dominican Republic, Uruguay and Venezuela. The Firm's product portfolio includes crude steel; finished products for the construction industry, such as rebar, wire-rods, structural shapes, hot-rolled coils and heavy plates; finished industrial products, such as commercial rolled-steel bars, light profiles and wires; agricultural products, such as stakes, smooth wire and barbed-wire; and special steel items. The Company's activities include also operations of iron ore mines located in the state of Minas Gerais.
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: | FAIL |
| PRICE/CASH FLOW (P/CF) RATIO: | PASS |
| PRICE/BOOK (P/B) VALUE: | FAIL |
| PRICE/DIVIDEND (P/D) RATIO: | PASS |
| CURRENT RATIO: | PASS |
| PAYOUT RATIO: | FAIL |
| RETURN ON EQUITY: | PASS |
| PRE-TAX PROFIT MARGINS: | PASS |
| YIELD: | PASS |
| LOOK AT THE TOTAL DEBT/EQUITY: | PASS |
Detailed Analysis of GERDAU SA (ADR)
STEEL DYNAMICS, INC. (STLD) is a large-cap value stock in the Iron & Steel industry. The rating according to our strategy based on David Dreman is 79% 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: Steel Dynamics, Inc. is a diversified domestic steel producer and metals recycler. The Company's segments include Steel Operations, Metals Recycling Operations, and Steel Fabrication Operations. The Steel Operations segment include the Company's six operating electric arc furnace steel mills, including Butler Flat Roll Division, Columbus Flat Roll Division, Structural and Rail Division, Engineered Bar Products Division, Roanoke Bar Division, and Steel of West Virginia, and its under construction Southwest-Sinton Flat Roll Division; steel coating and processing operations, Heartland Flat Roll Division, United Steel Supply (USS), and Vulcan Threaded Products, Inc. The Metals Recycling Operations Segment includes the OmniSource ferrous and nonferrous processing, transportation, brokerage, and scrap management services. The Steel Fabrication Operations Segment includes the New Millennium Building Systems joist and deck plants located throughout the United States, and in Northern Mexico.
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: | 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 |
Detailed Analysis of STEEL DYNAMICS, INC.
WESTLAKE CORP (WLK) is a large-cap value stock in the Chemicals - Plastics & Rubber industry. The rating according to our strategy based on David Dreman is 79% 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: Westlake Corporation, formerly Westlake Chemical Corporation, is a global manufacturer and supplier of materials and products. The Company provides the building blocks for essential solutions, from housing and construction, to packaging and healthcare, to automotive and consumer. It operates in two segments: Housing & Infrastructure Products and Performance & Essential Materials. Housing & Infrastructure Products segment manufactures finished goods used in residential and commercial construction applications, such as residential siding, trim and molding, pipe and fittings, architectural stone, cement, clay, metal and polymer composite roofing, outdoor living products, including decking and matting, and films. Performance & Essential Materials segment operates approximately 25 sites around the world that produce the fundamental chemical building blocks that are used to make essential products for the agricultural, food, medical, construction, automotive, electrical and cleaning sectors.
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: | 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: | PASS |
Detailed Analysis of WESTLAKE CORP
More details on Validea's David Dreman strategy
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 aninvestment researchservice 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.
