Stock Research


Symbol Lookup

Free Research

Rating Changes

Articles

Stock Ideas

Hot List

Model Portfolios

Guru Screener

Adv. Guru Screener

Top Industries

Stock Analysis

Guru Analysis

Stock Tracker

My Portfolio

About Us

Introduction

Videos

Help

About John Reese

Guru Investor Book

Press Room

Featured Gurus

Warren Buffett

Benjamin Graham

Peter Lynch

Joel Greenblatt

Martin Zweig

David Dreman

John Neff

Kenneth Fisher

Joseph Piotroski

Gurus by Style

Value Stocks

Growth Stocks

Dividend Stocks

Growth/Value Stocks

Customer Service

Refer a Friend
Enter Email:

Rating Change Detail - SAVANNA ENERGY SERVICES CORP. (SVY) - 2/13/2013
The stock was downgraded from Some Interest to No Interest on 2/13/2013 by the Contrarian Investor Strategy based on the principles of David Dreman. The score according to this strategy fell from 69% to 57%. A full detailed analysis of SVY using this strategy is included below. For a full detailed analysis of SVY using 12 proven strategies of Wall Street Legends, take a free trial to Validea.ca

Detailed Analysis of SAVANNA ENERGY SERVICES CORP. (SVY)

Strategy: Contrarian Investor - Based on: David Dreman

MARKET CAP: [PASS]

Medium to large-sized companies (the largest 500 companies) should be chosen, because they are more in the public eye. Furthermore, the investor is exposed to less risk of "accounting gimmickry", and companies of this size have more staying power. SVY has a market cap of $622 million, therefore passing the test.

EARNINGS TREND: [PASS]

A company should show a rising trend in the reported earnings for the most recent quarters. SVY's EPS for the past 2 quarters, (from earliest to most recent quarter) -0.09, 0.08 have been increasing, and therefore the company passes this test.

EPS GROWTH RATE IN THE IMMEDIATE PAST AND FUTURE: [FAIL]

This methodology likes to see companies with an EPS growth rate higher than the marketin the immediate past and a likelihood that this trend will continue in the near future. SVY fails this test as its EPS growth rate for the past 6 months (-80.48%) does not beat that of the market (2.63%).

This methodology would utilize four separate criteria to determine if SVY is a contrarian stock. In order to eliminate weak companies we have stipulated that the stock should pass at least two of the following four major criteria in order to receive "Some Interest".

P/E RATIO: [FAIL]

The P/E of a company should be in the bottom 20% of the overall market. SVY's P/E of 12.13, based on trailing 12 month earnings, is higher than the bottom 20% criterion (below 8.20), and therefore fails this test.

PRICE/CASH FLOW (P/CF) RATIO: [FAIL]

The P/CF of a company should be in the bottom 20% of the overall market. SVY's P/CF of 3.95 does not meet the bottom 20% criterion (below 3.90), and therefore fails this test.

PRICE/BOOK (P/B) VALUE: [PASS]

The P/B value of a company should be in the bottom 20% of the overall market. SVY's P/B is currently 0.72, which meets the bottom 20% criterion (below 0.76), and it therefore passes this test.

PRICE/DIVIDEND (P/D) RATIO: [FAIL]

The P/D ratio for a company should be in the bottom 20% of the overall market (that is the yield should be in the top 20%). SVY's P/D of 20.20 does not meet the bottom 20% criterion (below 13.89 or yield above 3.7%), and it therefore fails this test.

This methodology maintains that investors should look for as many healthy financial ratios as possible to ascertain the financial strength of the company. These criteria are detailed below.

CURRENT RATIO: [PASS]

A prospective company must have a strong Current Ratio (greater than or equal to the average of it's industry [2.06] or greater than 2). This is one identifier of financially strong companies, according to this methodology. SVY's current ratio of 2.10 passes the test.

PAYOUT RATIO: [FAIL]

A good indicator that a company has the ability to raise its dividend is a low payout ratio. The payout ratio for SVY is not available, and hence no opinion can be rendered on this variable.

RETURN ON EQUITY: [FAIL]

The company should have a high ROE, as this helps to ensure that there are no structural flaws in the company. This methodology feels that the ROE should be greater than the top one third of ROE from among the top 500 largest cap stocks, which is 15.07%, and would consider anything over 27% to be staggering. The ROE for SVY of 5.87% is not high enough to pass this criterion.

PRE-TAX PROFIT MARGINS: [FAIL]

This methodology looks for pre-tax profit margins of at least 8%, and considers anything over 22% to be phenomenal. SVY's pre-tax profit margin is 6.33%, thus failing this criterion.

YIELD: [PASS]

The company in question should have a yield that is high and that can be maintained or increased. SVY's current yield is 4.95%, while the market yield is 2.31%. SVY passes this test.

LOOK AT THE TOTAL DEBT/EQUITY: [PASS]

The company must have a low Debt/Equity ratio, which indicates a strong balance sheet. The Debt/Equity ratio should not be greater than 20% or should be less than the average Debt/Equity for its industry of 54.77%. SVY's Total Debt/Equity of 25.27% is considered acceptable.

For a full detailed analysis of SVY using 12 proven strategies of Wall Street Legends,
take a free trial to Validea.ca

Rating Change Detail - SAVANNA ENERGY SERVICES CORP. (SVY) - 2/13/2013

Detailed Analysis of SAVANNA ENERGY SERVICES CORP. (SVY)

Strategy: Contrarian Investor - Based on: David Dreman