Zacks.com Announces That John Reese Highlights the Following Stocks: Centene, Petroleo Brasileiro, John B. Sanfilippo & Son, Westpac Banking, and Unilever

Business Wire,  Dec 27, 2004  

Tags: stock, Unilever PLC

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CHICAGO -- The market and the Hot List have both been moving in a positive direction. John Reese highlights a pair of stocks from the current portfolio and describes the guru strategies on which they're based. Read about Centene Corp. (NYSE:CNC), Petroleo Brasileiro (NYSE:PBR), John B. Sanfilippo & Son, Inc. (NASDAQ:JBSS), Westpac Banking Corporation (NYSE:WBK), and Unilever PLC (NYSE:UL). Click here for the full story exclusively on Zacks.com: http://at.zacks.com/?id=84

Highlights from the December 17th Featured Expert column by John Reese includes:

The Hot List and the market both continued their winning ways in the past two weeks. The S&P 500 was up 1.1% since John Reese's last issue, while the Hot List was up 1.8%. With the year about to come to a close, the Hot List remains well ahead of the market, with a 21.7% return compared to the S&P's 8.2%.

Centene Corp. (NYSE:CNC): Two of Reese's guru strategies, based on O'Shaughnessy and Zweig, are favorably impressed by Centene.

The James P. O'Shaughnessy Strategy

O'Shaughnessy's Cornerstone Growth Strategy, based on Reese's understanding of it, looks for companies with a market capitalization of at least $150 million, and it often prefers seeing market caps above $1 billion. This screens out companies too illiquid for most investors and big enough to have solid and stable earnings. CNC, with a market cap of $1.2 billion, passes this criterion.

The Cornerstone Growth methodology also looks for companies that show persistent earnings growth without regard to magnitude. To fulfill this requirement, a company's earnings must increase each year for a five year period. CNC passes this test with annual EPS before extraordinary items for the last five years being:

1999: -$4.42
    2000: $0.76
    2001: $1.07
    2002: $1.47
    2003: $1.73

Petroleo Brasileiro (NYSE:PBR): The two guru strategies Reese follows that are gushing about this oil company and putting it on the Validea Hot List are those based on David Dreman and James P. O'Shaughnessy.

The David Dreman Strategy

Based on Reese's interpretation of David Dreman's strategy, he considers only companies that are among the 1,500 largest, which currently translates into companies with market caps of more than $1.6 billion. These large companies are favored because they are more in the public eye and therefore are less likely, Dreman thinks, to be prone to "accounting gimmickry," while having more staying power. Petrobras, with a market cap in excess of $41 billion, is among the biggest companies.

The most important requirement to Dreman is that the stock be contrarian. It qualifies as contrarian by being in the bottom 20% of the overall market for two or more of the following four ratios: price-to-earnings, price-to-cash flow, price-to-book and price-to-dividend. Petrobras is contrarian in three of these.

Other stocks on the Hot List include:

John B. Sanfilippo & Son, Inc. (NASDAQ:JBSS) is a processor, packager, marketer and distributor of shelled and inshell nuts.

Westpac Banking Corporation (NYSE:WBK) is a banking organization primarily operating in Australia and New Zealand. It provides a range of banking and financial services in retail, commercial and institutional banking and wealth management activities.

Unilever PLC (NYSE:UL) is the parent company of a group of companies primarily engaged in the business of supplying fast-moving consumer goods in foods, household care and personal product categories.

Learn more about John Reese's guru strategies favoring the stocks above, and take a look at the complete portfolio, by clicking: http://at.zacks.com/?id=85

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