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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.
Pennsylvania-based Dorman Products sells auto replacement parts and fasteners and products for the automotive after-market. It has a market cap of $2-billion (U.S.).
Dorman has grown earnings at a 29-per-cent pace over the long term (using an average of the 3-, 4- and 5-year EPS growth rates), which the Peter Lynch based model likes. It has grown sales at a 15-per-cent pace over long-term, (using an average of the 3-, 4-, and 5-year sales growth rates). And it has a 0.87 P/E-to-growth ratio, helping it get strong interest from the Lynch model.
The company gets strong interest from the Martin Zweig-based strategy, which likes that its earnings growth is strong and accelerating (35.7 per cent last quarter versus an average of 19.3 per cent in the three previous quarters).
Dorman has a strong 12-month relative strength of 80. It has no long term debt, which both the Lynch and Zweig models love.
Its 22-per-cent return on equity (12 month) is double the industry average.
Dorman has a 17.8-per-cent return on retained earnings over past decade, which the Warren Buffett-based model likes and it has a 4.7 current ratio, a sign of good liquidity, according to the Benjamin Graham-based approach.
John Reese is long DORM.
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