Validea is an advisory service which assesses stocks based on the investing criteria of many of the market's leading stock pickers. Editor John Reese looks at an energy firm that fits the growth and value criteria of money manager and author James P. O'Shaughnessy.
Repsol, S.A. (Repsol) is an integrated energy company; it owns and operates five refineries in Spain (Cartagena, A Coruna, Bilbao, Puertollano and Tarragona) with a combined distillation capacity of approximately 900 thousand barrels of oil per day.
The company also operates La Pampilla refinery in Peru, which has an installed capacity of approximately 120 thousand barrels of oil per day. Its chemicals division produces and commercializes a range of products, and its activities range from basic petrochemicals to derivatives.
MARKET CAP: PASS
The Cornerstone Value Strategy looks for large, well known companies whose market cap is greater than $1 billion. These companies exhibit solid and stable earnings. REPYY's market cap of $26,789 million passes this test.
CASH FLOW PER SHARE: PASS
The second criterion requires that the company exhibit strong cash flows. Companies with strong cash flow are typically the value oriented investments that this strategy looks for. The company's cash flow per share must be greater than the mean of the market cash flow per share ($2.10). REPYY's cash flow per share of $3.19 passes this test.
SHARES OUTSTANDING: PASS
This particular strategy looks for companies whose total number of outstanding shares are in excess of the market average (610 million shares). These are the more well known and highly traded companies. REPYY, who has 1,630 million shares outstanding, passes this test.
TRAILING 12 MONTH SALES: PASS
A company's trailing 12 month sales ($55,296 million) are required to be 1.5 times greater than the mean of the market's trailing 12 month sales ($23,311 million). REPYY passes this test.
DIVIDEND: PASS
The final step in the Cornerstone Value strategy is to select the 50 companies from the market leaders group (those that have passed the previous four criteria) that have the highest dividend yield. REPYY, with a dividend yield of 6.04%, is one of the 50 companies that satisfy this last criterion.
