In this edition of Watchlist Wednesday, we highlight the top 5 contrarian stocks as displayed on the Contrarian Approach stock screen.
This screen is influenced by the strategies discussed by David Dreman in the book, Contrarian Investment Strategies.
– This article appeared first on The Stock Market Blueprint Blog.
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Contrarian Approach Description
Contrarian Approach is a simple screen which finds solid companies trading at low price ratios.
The screen is inspired by David Dreman’s contrarian investment philosophy. Dreman believes strongly in market overreactions and the principle of mean reversion.
His research and professional experience shows that a diversified list of financially strong, adequately sized companies, currently out-of-favor with the market, “provide superior returns over time.”
Click here to learn more about the Contrarian Approach stock screen.
Top 5 Contrarian Stocks
Here’s a breakdown of the top 5 contrarian stocks. These stocks have the lowest price ratios after meeting the following criteria:
– Market Capitalization > $1 Billion
– Current Ratio > 2
– Debt/Equity < 0.5
Universal Corp (NYSE:UVV): Involved in procuring, financing, processing, packing, storing, and shipping leaf tobacco for sale to, or for the account of, manufacturers of consumer tobacco products.
– Market Capitalization: $1.6 Billion
– Price to Earnings: 13.84
– Price to Book: 1.12
– Price to Free Cash Flow: 5.50
– Current Ratio: 6.27
– Debt/Equity: 0.31
– Closing Price on 12/6/16: $58.05
Follow Universal Corp (NYSE:UVV)
Follow Universal Corp (NYSE:UVV)
Benchmark Electronics, Inc. (NYSE:BHE): Provides integrated electronic manufacturing services in the Americas, Asia, and Europe.
– Market Capitalization: $1.4 Billion
– Price to Earnings: 17.40
– Price to Book: 1.08
– Price to Free Cash Flow: 5.49
– Current Ratio: 3.69
– Debt/Equity: 0.17
– Closing Price on 12/6/16: $29.15
Follow Benchmark Electronics Inc (NYSE:BHE)
Follow Benchmark Electronics Inc (NYSE:BHE)
Valero Energy Corporation (NYSE:VLO): Refines and markets petroleum such as gasoline, jet fuel, asphalt, petrochemicals and more.
– Market Capitalization: $3 Billion
– Price to Earnings: 13.41
– Price to Book: 1.46
– Price to Free Cash Flow: 13.56
– Current Ratio: 2.05
– Debt/Equity: 0.44
– Closing Price on 12/6/16: $64.72
Follow Valero Energy Corp (NYSE:VLO)
Follow Valero Energy Corp (NYSE:VLO)
Dril-Quip, Inc. (NYSE:DRQ): Designs, manufactures, sells, and services offshore drilling and production equipment for use in deepwater, harsh environment, and severe service applications worldwide.
– Market Capitalization: $2.3 Billion
– Price to Earnings: 16.16
– Price to Book: 1.64
– Price to Free Cash Flow: 9.45
– Current Ratio: 13.34
– Debt/Equity: 0.00
– Closing Price on 12/6/16: $60.40
Follow Innovex International Inc. (NYSE:INVX)
Follow Innovex International Inc. (NYSE:INVX)
Guess?, Inc. (NYSE:GES): Markets, distributes and licenses a lifestyle collection of contemporary apparel and accessories.
– Market Capitalization: $1.1 Billion
– Price to Earnings: 17.52
– Price to Book: 1.10
– Price to Free Cash Flow: 13.51
– Current Ratio: 2.90
– Debt/Equity: 0.02
– Closing Price on 12/6/16: $13.41
Follow Guess Inc (NYSE:GES)
Follow Guess Inc (NYSE:GES)
Implementation
Due to the nature of deep value strategies such as the Contrarian Approach, average investors will find numerous reasons not to buy (1) the above stocks.
Disciplined investors, on the other hand, will find success following such a simple investment strategy (2).
You can build your own portfolio using the stock screens on TheStockMarketBlueprint.com.
Check out our Shadow Stock Portfolios (3) to see real-world examples of implementing systematic investment strategies.
Sign in to your Premium account or start your free trial today to access the screens.
Note: Mitchell Mauer is the Founder of TheStockMarketBlueprint.com. The Stock Market Blueprint is a site that finds value stocks for investors building long-term wealth. The site’s investment philosophy is anchored in principles established by Benjamin Graham and his most reputable followers over the last 100 years.
Additional Links:
(1) https://www.thestockmarketblueprint.com/what-does-it-take-to-profit-in-the-stock-market/
(2) https://www.thestockmarketblueprint.com/investment-strategy-buy-stocks-blind/
(3) https://www.thestockmarketblueprint.com/shadow-stock-portfolios-blog/
