Here’s a breakdown of the five best 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.
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.”
5 Best Contrarian Stocks
Here’s a breakdown of the 5 best contrarian stocks. These stocks have the lowest price ratios after meeting the following criteria:
- Market Capitalization > $1 Billion
- Current Ratio > 2
- Debt/Equity < 50%
Universal Corp. (UVV): Involved in procuring, financing, processing, packing, storing, and shipping leaf tobacco to manufacturers of consumer tobacco products.
- Market Capitalization: $1.80 Billion
- Price to Earnings: 15.86
- Price to Book: 1.28
- Price to Free Cash Flow: 5.50
- Current Ratio: 6.27
- Debt/Equity: 0.31
- Closing Price on 1/5/16: $63.85
Genesco, Inc. (GCO): Engages in the design, sourcing, marketing, and distribution of footwear, apparel, and accessories through retail stores.
- Market Capitalization: $1.26 Billion
- Price to Earnings: 14.18
- Price to Book: 1.46
- Price to Free Cash Flow: 8.93
- Current Ratio: 2.40
- Debt/Equity: 0.14
- Closing Price on 1/5/16: $60.20
Benchmark Electronics, Inc. (BHE): Provides integrated electronic manufacturing services in the Americas, Asia, and Europe.
- Market Capitalization: $1.53 Billion
- Price to Earnings: 18.56
- Price to Book: 1.15
- Price to Free Cash Flow: 5.49
- Current Ratio: 3.69
- Debt/Equity: 0.17
- Closing Price on 1/5/16: $30.60
Volero Energy Corp. (VLO): Refines and markets petroleum such as gasoline, jet fuel, asphalt, petrochemicals and more.
- Market Capitalization: $31.23 Billion
- Price to Earnings: 14.11
- Price to Book: 1.54
- Price to Free Cash Flow: 13.56
- Current Ratio: 2.05
- Debt/Equity: 0.44
- Closing Price on 1/5/16: $67.68
Dril-Quip, Inc. (DRQ): Designs, manufactures, sells, and services offshore drilling and production equipment for use in deepwater, harsh environment, and severe service applications worldwide.
- Market Capitalization: $2.36 Billion
- Price to Earnings: 16.87
- Price to Book: 1.72
- Price to Free Cash Flow: 9.45
- Current Ratio: 13.34
- Debt/Equity: 0.00
- Closing Price on 1/5/16: $62.80
You can build your own portfolio using the stock screens on The Stock Market Blueprint.
Check out our Shadow Stock Portfolios to see real-world examples of implementing systematic investment strategies.
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