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.
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
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
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