David Dreman

Last Update: 2014-02-14

Number of Stocks: 417
Number of New Stocks: 150

Total Value: $1,324 Mil
Q/Q Turnover: 11%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

David Dreman' s Profile & Performance

Profile

David Dreman is the founder and Chairman of Dreman Value Management, LLC and also serves as the firm's Chief Investment Officer. A regular columnist for Forbes for 25 years, Mr. Dreman's recent best-selling book, "Contrarian Investment Strategies: The Next Generation?" was published in the spring of 1998.

Web Page:http://www.dreman.com/news/

Investing Philosophy

The Contrarian and the value guru, Dreman's investment philosophy is based on low P/E approach to stock selection. The philosophy at Dreman Value Management: "We invest in undervalued companies that exhibit strong fundamentals, above-market dividend yields and historic earnings growth, which our analysis indicates will persist. Our strategy is to own strong, fundamentally sound companies and to avoid speculative stocks or potential bankruptcies." They believe that the markets are not perfectly efficient, and that behavioral psychology influences investor actions and reactions.

Total Holding History

Performance of Large Cap Fund ¨C Institution

YearReturn (%)S&P500 (%)Excess Gain (%)
2011-3.852.08-5.9
200933.2426.466.8
2008-45.06-37-8.1
3-Year Cumulative-29.6 (-11%/year)-18.7 (-6.7%/year)-10.9 (-4.3%/year)
2007-2.775.61-8.4
200617.6215.791.8
5-Year Cumulative-19.5 (-4.2%/year)-0.5 (-0.1%/year)-19 (-4.1%/year)
20058.624.913.7
200412.65120.6

Top Ranked Articles

Stock Market Valuation: September 1, 2011
I started this monthly market valuation series in December 2009. The motivation for the article was to debunk the pundits stating that the market was overvalued because PE TTM was 87. This was ridiculous because earnings were deflated by the worst economic crisis since the great depression. However, the question was how to value the market from a purely quantitative methodology; while ignoring all the outside noise and macro predictions of where the economy is headed. I looked for several different metrics to evaluate the market which over time have proven to be effective and decided to look at all the metrics, instead of just focusing on the last 12 months of earnings. Read more...
Jacob Wolinsky Interviews Legendary Value Investor David Dreman
David Dreman’s bio from Dreman.com: Read more...
Stock Market Valuation: October 1, 2011
I started this monthly market valuation series in December 2009. The motivation for the article was that I was getting tired of hearing that the market was overvalued because P/E TTM was 87. This was ridiculous because earnings were deflated by the worst economic crash since the great depression. However, the question was how to value the market from a purely quantitative methodology, while ignoring all the outside noise and macro predictions of where the economy is headed. I looked for several different metrics to evaluate the market which over time have proven to be effective and decided to look at all the metrics, instead of just focusing on the last 12 months of earnings. Read more...
David Dreman: A Very Undervalued Value Investor
When people think of some of the greatest investors and thinkers of our time names like Warren Buffett, and George Soros come to mind. Many other investors are highly respected inside and outside the value investing world, Bruce Berkowitz being a good example. Read more...
Three Top Investors Bet Big on the Inevitable
The most powerful people in the financial world are doing anything they can to prevent it. Read more...
» More David Dreman Articles

Commentaries and Stories

  • Currently 5.00/5

Rating: 5.0/5 (2 votes)

Dividend Discount Model Indicates a Buy for Potash Corporation
Potash Corporation of Saskatchewan Inc. (POT) is the world's largest integrated fertilizer and related industrial and feed products company by capacity. The company aims to be the lead supplier of potash, nitrogen and phosphate products. More...

  • Currently 5.00/5

Rating: 5.0/5 (2 votes)

What We Expect for Jet Sales at the Gulfstream Business
General Dynamics Corp. (GD) is an aerospace and defense company. It has four business groups: Aerospace, Combat Systems, Marine Systems and Information Systems and Technology. The company’s key customer is the U.S. government. The company also has business with non-U.S. governments and corporate and individual buyers of business aircraft. More...

LONG, AEROSPACE, DEFENSE


  • Currently 0.00/5

Rating: 0.0/5 (0 votes)

Reynolds: New Product, More Profit
Governments around the world have been pushing through regulations on tobacco companies, in order to reduce consumption. Apart from obligating tobacco companies to include precautionary labels on cigarette packages, the U.S. Food and Drug Administration (FDA) is focused on banning menthol-flavoured cigarettes, while the European Parliament passed a regulation in February 2014 stating that e-cigs most prove their preventive qualities in order to be approved. Also, e-cigs with over 20 milligrams of nicotine per millilitre will now require authorization as a medicine. More...

TABACCO,CIGARETTES,E-CIGS,KOOL,CAMEL,PALL MALL


  • Currently 5.00/5

Rating: 5.0/5 (2 votes)

The Largest Satellite TV Operator in the U.S. Is Expanding Its Current Portfolio of Services
DirecTV (DTV) is engaged in providing digital television entertainment in the U.S. and Latin America. As of Dec. 31, 2012, the company operated two direct-to-home business units: DirecTV U.S. and DirecTV Latin America, which are differentiated by their geographic locations and are engaged in acquiring, promoting, selling and distributing digital entertainment programming primarily via satellite to residential and commercial subscribers. More...

LONG, TV, ENTERTAINMENT, SATELITE, COMMUNICATIONS, MEDIA


  • Currently 5.00/5

Rating: 5.0/5 (2 votes)

Xerox Embarked on a Series of Acquisitions
Xerox Corporation (XRX), with a market capitalization of $13.11 billion, is among the largest companies in the global document markets. It is a provider of business process and document management. The company is a Business Process Outsourcing (BPO) company engaged in managing transaction processes. More...

LONG, DOCUMENT, XEROX, PRINTING


  • Currently 5.00/5

Rating: 5.0/5 (2 votes)

Why Darden Restaurants Is a Sell in the Near-Term
Darden Restaurants Inc. (DRI) is the world's largest publicly held casual dining restaurant company. It owns and operates the Olive Garden®, Red Lobster®, LongHorn Steakhouse®, The Capital Grille®, Yard House®, Bahama Breeze®, Seasons 52®, Eddie V’s Prime Seafood® and Wildfish Seafood Grille® restaurant brands.Below Analysts' ExpectationsDarden Restaurants is the largest full-service restaurant company in the world. As of May 26 2013, the company operated 2,138 restaurants in the U.S. and Canada, all of which are owned by the company, except three restaurants located in Florida and three restaurants located in California that are owned by joint ventures managed by the company. As of the same date, the company had 37 franchised restaurants in Japan, the Middle East, Puerto Rico and Mexico pursuant to area development and franchise agreements. But unfortunately, sales declined at its best known brands. Darden´s performance was hurt by a sales drop at its Red Lobster chain, which it plans to separate the segment either through a spin-off or sale. This transaction could take place in 2015. Olive Garden also underperformed analysts' expectations for the major part of fiscal 2013.Inflation RiskOutlook for food inflation at Darden is higher than in the past, so food and beverage expenses ratio will be higher year over year. Commodity inflation will be between 2.5% to 3.0% in fiscal 2014 and most of the food inflation will come from proteins, particularly beef and seafood. Furthermore, energy costs are also likely to be up year over year. As a matter of fact, earnings for fiscal 2014 are probably declining in the range of 15% to 20%.Long-Term Drivers The Specialty Restaurant Group (SRG), which includes Bahama Breeze and The Capital Grille, has grown over the last couple of quarters. Eddie V's Restaurants and Yard House might be meaningful long-term drivers, as we think most of the growth in the next years will come from the acquisition of those restaurants.Analyst RecommendationThe firm is currently Zacks Rank # 3 - Hold, and it also has a longer-term recommendation of “Underperfom.” For investors looking for a Zacks Rank # 1 – Strong Buy, Ignite Restaurant Group Inc. (IRG) and The Wendy's Company (WEN) could be the options.P/E, Earnings and ROEIn terms of valuation, the stock sells at a trailing P/E of 18.5x, trading at a premium compared to the industry. Earnings per share (EPS) decreased by 42.3% in the most recent quarter compared to the same quarter a year ago. The company missed the Zacks Consensus Estimate for both earnings and revenues in fiscal second quarter 2014.Finally, I always like to see one of the most important financial ratios applying to stockholders, the best measure of performance for a firm's management: the return on equity. The ratio has decreased when compared to the same quarter one year prior. Let´s compare the current ratio with the peer group in the next table: Ticker Company Name ROE (%) DRI Darden Restaurants 20 WEN Wendy´s 2.36 EAT Brinker International, Inc. 109.37 BWLD Buffalo Wild Wings, Inc. 15.36 DNKN Dunkin Brands Group Inc 36.06 As we can see, the firm has a higher ROE than Wendy´s and Buffalo Wild Wings, Inc. (BWLD), but far less than the ones from Dunkin Brands Group Inc (DNKN) and Brinker International, Inc. (EAT).Final Comment As outlined in this article, the company underperformance in its core brands, Red Lobster and Olive Garden resulted in lower sales in the last quarter. Darden was not the only one facing trouble, other restaurants such as Dine Equity (DIN) and Yum! Brands (YUM) have also fallen short. On the other hand, we see we think Darden can continue to get benefitted from the acquisitions.With a closed price level that was not very different from its closing price of one year earlier, in this opportunity I would recommend investors to stay away from this stock. Hedge fund gurus have also been active in the company in fourth quarter 2013. Gurus like Jim Simons (Trades, Portfolio), David Dreman (Trades, Portfolio) and Westport Asset Management (Trades, Portfolio) have sold or reduced positions in it.Disclosure: Victor Selva holds no position in any stocks mentioned. More...

LONG, RESTAURANTS, CASUAL, DINING


  • Currently 5.00/5

Rating: 5.0/5 (2 votes)

ACE Went Through a Series of Acquisitions
ACE Limited (ACE) is an insurance and reinsurance organization. The company provides commercial insurance products and service offerings such as risk management programs, loss control and engineering and complex claims management. The company’s segments are: Insurance - North American, Insurance - Overseas General, Global Reinsurance, and Life. More...

LONG, INSURANCE, COMMERCIAL


  • Currently 5.00/5

Rating: 5.0/5 (3 votes)

Abbvie's Humira Continues to be a Powerful Catalyst for Growth
AbbVie Inc. (ABBV) is a research-based biopharmaceutical company that develops and markets therapies that address diseases. It also has a pipeline of medicines and company’s portfolio of proprietary products includes a line of adult and pediatric pharmaceuticals. More...

LONG, BIOPHARMACEUTICAL, PHARMA, BIO


  • Currently 5.00/5

Rating: 5.0/5 (3 votes)

Time to Be Long in a Science Company?
On Dec. 31, Michael Price (Trades, Portfolio) added E. I. du Pont de Nemours and Company (DD) at an average price between $56.94 and $64.65 and currently holds 320,000 shares of the stock with a current value of $21 million in his portfolio. More...

LONG, CHEMICALS, SCIENCE, AGRICULTURE


  • Currently 5.00/5

Rating: 5.0/5 (3 votes)

Do Gurus’ Transactions Predict Joy’s Strong Performance in the Long Term?
The mining sector continues to be under pressure since the last economic crisis as prices for mined commodities entered a downtrend in the second quarter of 2011. So far, prices for most precious and base metals, and steel raw materials seem to have stabilized throughout 2013. However, they are all far from recovering the lost ground as demand continues comparatively low, and activity in related industries slowly recovers. One of the most affected industries has been mining equipment, doubled whammed by a decline in new equipment purchases and original parts replacement. Joy Global (JOY) has not been the exception, but gurus have increased their holdings during the last quarter of 2013. Can you expect to be fortunate in the long term? More...

LONG, HEAVY, MACHINERY


  • Currently 0.00/5

Rating: 0.0/5 (0 votes)

Guru Stocks at 52-Week Lows: VZ, CHL, T, PBR, HMC
According to GuruFocus list of 52-week lows, these Guru stocks have reached their 52-week lows. More...

  • Currently 3.63/5

Rating: 3.6/5 (8 votes)

Is It Time to Change Your 'General Motors Machine'?
General Motors Company (GM) designs, builds and sells cars, trucks and automobile parts. The company also provides financing services through General Motors Financial Company Inc. The company’s automotive operations are conducted through four segments: GM North America (GMNA), GM Europe, GM International Operations and recently added GM South America. The company's focus is to boost its sales on the emerging markets (Brazil, China and India) and competitors include Ford Motor Co. (F) and Toyota Motor Corporation (TM). More...

LONG, AUTO, CARS, TRUCKS, MOTORS, PARTS


  • Currently 3.50/5

Rating: 3.5/5 (2 votes)

Guru Stocks at 52-Week Lows: CHL, KO, T, PBR, EC
According to GuruFocus list of 52-week lows, these Guru stocks have reached their 52-week lows. More...

  • Currently 0.00/5

Rating: 0.0/5 (0 votes)

Weekly Guru Bargains Highlights: VOD, EC, PBR
According to GuruFocus updates, these stocks have declined the most since Gurus have bought. More...

  • Currently 5.00/5

Rating: 5.0/5 (4 votes)

Thomson Reuters: An Unstable Industry Leader?
When Thomson Reuters Corporation (TRI) was formed in 2008, from the merger of Canada-based Thomson and UK-based Reuters Group, exceptional growth and profitability was expected. And although the company took on its leading role in the global information services industry, by providing data and content to a vast range of financial and professional markets worldwide, growth has been sluggish throughout fiscal 2013, raising concerns about the future. When investment gurus Joel Greenblatt (Trades, Portfolio) and David Dreman (Trades, Portfolio) then sold out their company shares, I began to wonder what was going on on the Reuters side of things. More...

PUBLISHING,REUTERS GROUP,GLOBAL INFORMATION SERVICES,EIKON,NEWS,NEWSPAPERS,FINANCE


  • Currently 5.00/5

Rating: 5.0/5 (5 votes)

Calculating United Tech's Fair Value Based on Future Growth Expectations
United Technologies Corp. (UTX) is a diversified business conglomerate serving various end-markets such as aerospace, defense and commercial construction. It has reported strong earnings per share improvement in fourth quarter 2013 compared to the same quarter a year ago. Additionally, the company has demonstrated a pattern of positive earnings per share growth over the past two years, as we can see in the next chart. We include the stock price because EPS often lead the stock price movement. More...

LONG, DIVERSIFIED, BUSINESS, CONGLOMERATE, AEROSPACE, DEFENSE, COMMERCIAL, CONSTRUCTION,


  • Currently 4.75/5

Rating: 4.8/5 (4 votes)

Diamond Hill Capital´s Returned More than 10% in the Recent Quarter
Over the past days hedge funds have been filing their form 13-F, which is a quarterly report of equity holdings by filed institutional investment managers with at least $100 million in equity assets under management, as required by the United States Securities and Exchange Commission (SEC). In this article, let´s concentrate in one particular hedge fund and try to see the principal holdings in its portfolio. I will look into Diamond Hill Capital (Trades, Portfolio) Management Inc. (DHIL). The fund is a registered investment adviser based in Columbus, Ohio and it is independent and publicly owned, listed on NASDAQ and included in the Russell 2000 Index. More...

LONG, FINANCE, FINANCIAL, FUND


  • Currently 4.17/5

Rating: 4.2/5 (6 votes)

A Strong Sell Despite a Buy Recommendation Due to Its Intrinsic Value
Philip Morris International Inc. (PM) manufactures and markets cigarettes outside the U.S. in 180 countries. The company´s plan is to introduce new packaging, new blends and other line extensions. A key driver of the company is the strong market share and the economies of scale. Also, the company has combated unfavorable tax regulations with price increases, showing a good price-elasticity. The firm's competitors include British American Tobacco plc (BTI) and Imperial Tobacco Group plc (ITYBY). More...

LONG, TOBACCO


  • Currently 2.33/5

Rating: 2.3/5 (3 votes)

Guru Stocks at 52-Week Lows: CHL, VOD, T, KO, HMC
According to GuruFocus list of 52-week lows, these Guru stocks have reached their 52-week lows. More...

  • Currently 5.00/5

Rating: 5.0/5 (2 votes)

Rovi Corp: Profitability in Times of Change
Rovi Corp (ROVI) has had several ups and downs in the technology market over the past few years. However, the last quarter showed positive financial results, and the new management team has taken upon itself the task of breathing fresh air into the firm. Therefore, the company is now undergoing a rebuilding period to improve its complex structure, which could put a temporary strain on operating margins. More...

LONG, TECH, ENTERTAINMENT, DIGITAL


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