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Dreman Low Price to Cash Flow Screen 182 Qualifying

David Dreman Low Price to Cashflow is a contrarian value strategy developed by the famous US investment manager and author David Dreman in his book Contrarian Investment Strategies. It uses a basic value filter of selecting the cheapest 40% of the market by Price to Cashflow ratio and filtering further for quality according to company size, financial strength and growth. Dreman favours cash flow over earnings: "If we take two companies with similar outlooks, markets, products, and management talent, the one with the higher cashflow will usually be the more rewarding stock. In investing, as in your personal finances, cash is king." Dreman's studies showed that the cheapest 20% of the market by P/CF outperformed the most expensive 20% by 6.8% annually. Dreman cautions towards a buy and hold approach because "transaction costs are often not recognized by investors, but can be very expensive".

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This is an independent study based upon the methods of...
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David Dreman

Dreman is currently the founder, chairman and CIO of Dreman Value Management LLC. Author of 'Contrarian Investment Strategies: The Next Generation'. Regular columnist for Forbes magazine.

Contrarian Investment Strategies Dreman

by David Dreman

The 'contrarian guru' of investment shows today's financiers how to out perform professional money managers and profit from Wall Street panics.

This screen uses the following criteria:

  • Rank ( P/FCF ) > 60%
  • Sales £m > 100
  • Debt To Assets % < Median Debt To Assets %
  • Current Ratio > 1
  • Net Mgn % > Median Net Mgn %
  • EPS Gwth % > Median EPS Gwth %
  • Yield % > Median Yield %
  • Industry Group not in (Collective Investments)

Results are sorted by:

  • P/FCF in ascending order


And limited to the first 200 Results


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Performance Tracking


Returns FTSE 100
1 week -0.1% -2.1% -2.4% -0.9% - -1.5% -5.1% -0.6%
1 month -7.1% -2.5% -5.2% -3.0% - 5.0% 0.3% -2.5%
3 months -21.1% -7.2% -14.5% -6.0% - 0.3% -11.9% -5.9%
6 months -28.9% -15.8% -10.3% -29.3% - -7.4% 6.8% -10.7%
1 year -9.5% -12.6% -7.1% -37.7% - -3.0% 27.0% -8.0%
2 years 30.3% -1.2% -7.2% 13.2% 19.4% 40.3% 35.0% -0.1%
Annualised 14.2% 14.7% 2.7% 13.0% 13.8% 24.4% 14.5%
 
Risks
Max Drawdown -31.7% -18.8% -24.7% -53.5% -17.7% -16.2% -31.6%
Avg Holdings 6.3 19.9 10.1 1.9 0.4 25 3
Diversification Low Good Moderate Low Low Good Low