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Validea's pick of the week provides a detailed report on a company that scores well in the stock-screening service's model portfolios. On Validea.ca, investors can analyze 1,000 Canadian stocks through 12 different guru-based models and get individual reports on each company. Globe Investor has a distribution agreement with Validea.ca. Try it.
Connecticut-based Starwood Property Trust is the nation's largest commercial mortgage real estate investment trust, with more than 500 employees worldwide. It is managed by Starwood Capital Group, a real estate finance company that employs an additional 260 people and manages more than $29 billion in assets. Starwood Property Trust has a market cap of $5.2-billion (U.S.).
The company is one of only five stocks in the U.S. market that gets strong interest from the John Neff-based strategy, which likes that its P/E of 10.2 is between 40 per cent and 60 per cent of the market average. Sales have grown at a 140-per-cent rate over the long haul. The Neff strategy also likes its 2.5 total return/PE ratio (EPS growth + dividend yield divided by P/E ratio), which far exceeds the market average of 0.57.
Starwood gets strong interest from the Martin Zweig-based growth model, which likes that growth is not only strong but accelerating -- EPS grew at 37.7-per-cent rate last quarter, up from an average of 25.2 per cent in the previous 3 quarters, which was up from 17.3 per cent long term.
The company also gets strong interest from the David Dreman-based contrarian model, which likes that its P/E and price/dividend ratios are both in the market's cheapest 20 per cent. The Dreman model also likes its 8.2-per-cent dividend yield.
John Reese is long STWD.
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