Acuity Brands, Coca Cola FEMSA ? Reese’s Manager Picks
Manager: John Reese, Validea Capital Management Style: Value with some growth biasFund: National Bank Omega Consensus American Equity FundStrategy: stock selection using computer software that interprets strategies from the best investment ‘gurus’ over the past 50 years who have publicly disclosed their methodologies and also have a quantitative bias to them. In total there are 17 underlying strategies analyzed .
Bullish on:
Acuity Brands Inc.Cal-Maine Foods Inc.Coca Cola FEMSA
Bearish on:
Fortune Brands Inc.
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Commentary:
“Acuity Brands are a manufacturer/distributor of indoor and outdoor lighting expected to benefit from U.S. infrastructure projects. It is a recommendation based on the Peter Lynch strategy, which favours fast earnings growth and a price earnings-to-growth ratio of less than 1. It also likes companies with moderate to low debt and an inventory-to-sales ratio that is not increasing very much. Acuity’s inventory-to-sales is actually declining.
“Cal-Maine is a producer and marketer of eggs ? just plain old eggs. This company gets the nod from the Benjamin Graham strategy. Mr. Graham was a deep value investor who liked companies with a current ratio of greater than 2. Another key point is that long term debt is modest in relationship to net current assets.
“Coca Cola FEMSA, which holds the Coca Cola rights in Latin America and Mexico, is favoured by the Kenneth Fisher strategy, which looks at a low price-to-sales ratio, a modest debt-to-equity ratio and higher than average net profit margins.
“One stock the fund is not excited about is Fortune Brands, who are involved in a lot of things, including spirits, home hardware and golf products. Because it sold off a lot of its wine assets, the feeling is that the company’s remaining products won’t hold up in an economic downturn. The company also has higher debt-to-equity of 84%.”
Selected holdings:
Acuity Brands Inc. Cal-Maine Foods Inc. Coca Cola acheter viagra FEMSA (held in the Omega Consensus International Equity fund)Automatic Data Processing Inc.General Dynamics Corp.
Year-to-date return: - 14.7%One-year annualized return: N/A Three-year annualized return: N/A (Through Oct. 31, 2008)
Inception date for Omega series of funds was November 2007Morningstar rating: N/AAll data provided by Morningstar unless otherwise noted*Data provided by company
David Pett
photo courtesy validea capital management
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