Dreman Value’s Most Eye-Popping Moves of Q3 in Ford, Magna, More

Dreman Value Management LLC was founded in 1997. It follows contrarian value investment strategy. The firm undertakes bottom-up approach and mainly invests in shares with low P/E ratio. The firm’s invests heavily in finance stocks, which constitute more than a third of its portfolio. It also holds investments in the information technology and energy sectors.
Dreman Value Management has a well diversified portfolio and holds shares in various companies such as Johnson Controls International plc Ordinary Share (NYSE:JCI), Ford Motor Company (NYSE:F), Manulife Financial Corporation (USA) (NYSE:MFC), Magna International Inc. (NYSE:MGA) and Express Scripts Holding Company (NASDAQ:ESRX). This article discusses the fund’s strategy regarding these shares.

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Johnson Controls International plc Ordinary Share (NYSE:JCI) stock has gained 46% this year so far. The stock accounted for 1.27% of Dreman Value Management portfolio in the June quarter. For the quarter ended on 30th September, 2016, the investment fund disposed its holding of the stock and sold the entire holding of 46,283 shares. Of the hedge funds in our database, 32 funds held $1.088 billion worth of Johnson Controls’ shares in their portfolio at the end of the June quarter, which equaled to 3.80% of the outstanding shares. Johnson Controls International reported its adjusted earnings for the fourth quarter at $1.21 per share, beating market estimates of $1.02 per share. Its revenue at $10.2 billion, which also surpassed consensus estimates of $10.06 billion.

Ford Motor Company (NYSE:F) stock lost 5% this year so far. However, the company also offers dividend yield of 4.8%. Dreman Value Management trimmed its holding of the stock by 46% during the September quarter to 84,090 shares. The market value of the holding stood at $1.015 million and formed 0.62% of Dreman Value Management’s portfolio. 31 hedge funds from our database have positions in Ford Motor Company, with total holdings of about $685 million as on the end of June quarter, amounting to about 1.4% of the company’s outstanding stock. In terms of news concerning the company, Ford Motor Company recently announced that it plans to invest $195 million over the course of 5 years in India. Ford Motor Company will set up a technology and business center in city of Chennai in India. Seeing as the country will be a giant market in the future, Ford has already invested $2 billion in India so far.

Manulife Financial Corporation (USA) (NYSE:MFC) stock gained 22% in this year so far. Dreman Value Management boosted its holding of the stock by 60,418 shares during the quarter ended on 30th September, 2016. The fund held $889,000 worth of Manulife Financial Corporation stock at the end of the quarter, forming 0.54% of its portfolio. Dreman Value Management had 63,014 shares of the company in its portfolio at the end of the period. Among the funds we track, 16 funds held $189 million worth of Dreman Value Management’s stock in aggregate at the end of June, having amassed 0.70% of its outstanding stock. Manulife Financial Corporation Manulife Financial Corporation reported its third quarter adjusted profit at $0.37 per share. Its revenue for the quarter stood at $11.09 billion.

Magna International Inc. (NYSE:MGA) stock formed 0.53% of Dreman Value Management’s portfolio at the end of September quarter. The fund held 20,405 shares of the company with a market value of $876,000. The number of funds from our hedge fund database long Manga International was at 29 in the quarter ending June. The total value of their holdings stood at $428 million, in comparison to $660 million held by 32 funds at the end of previous quarter. Bulls are optimistic on the stock given the strong U.S. economy.

Express Scripts Holding Company (NASDAQ:ESRX) stock declined 13% this year as it also saw 54% decline in its holding by Dreman Value Management. The investment firm held 12,314 shares of Express Scripts Holding worth $869,000 as on the end of September quarter. 51 hedge funds we track held around $2.56 billion of Express Scripts Holding stock as of the end of June quarter, versus 57 funds holding stock worth $2.75 billion the previous quarter. Despite the poor performance year-to-date, Express Scripts recently received a rating upgrade from Deutsche Bank, which bumped up its rant from Sell to Hold. The investment bank’s price target on Express Scripts was also raised by $1 per share to $70.

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