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Rating Change Detail - SOCIETE GENERALE SA (ADR) (SCGLY) - 2/22/2013
The stock was upgraded from No Interest to Some Interest on 2/22/2013 by the Contrarian Investor Strategy based on the principles of David Dreman. The score according to this strategy rose from 61% to 69%. A full detailed analysis of SCGLY using this strategy is included below. For a full detailed analysis of SCGLY using 12 proven strategies of Wall Street Legends, take a free trial to Validea.com

Detailed Analysis of SOCIETE GENERALE SA (ADR) (SCGLY)

Strategy: Contrarian Investor - Based on: David Dreman

MARKET CAP: [PASS]

Medium to large-sized companies (the largest 1500 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. SCGLY has a market cap of $30,340 million, therefore passing the test.

EARNINGS TREND: [PASS]

A company should show a rising trend in the reported earnings for the most recent quarters. SCGLY's EPS for the past 2 quarters, (from earliest to most recent quarter) -0.96, -0.19 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 S&P in the immediate past and a likelihood that this trend will continue in the near future. Unfortunately, we do not have sufficient data available on SCGLY at this time.

This methodology would utilize four separate criteria to determine if SCGLY 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. SCGLY's P/E of 38.86, based on trailing 12 month earnings, is higher than the bottom 20% criterion (below 9.27), and therefore fails this test.

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

The P/CF of a company should be in the bottom 20% of the overall market. SCGLY's P/CF of 0.75 meets the bottom 20% criterion (below 4.91) and therefore passes 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. SCGLY's P/B is currently 0.44, which meets the bottom 20% criterion (below 0.77), 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%). SCGLY's P/D is not available, and hence an opinion cannot be rendered at this time.

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.

PAYOUT RATIO: [PASS]

A good indicator that a company has the ability to raise its dividend is a low payout ratio. The payout ratio for SCGLY is 0.00%. Unfortunately, its historical payout ratio is not available. Nonetheless it passes the payout criterion, as this is a very low payout.

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 1500 largest cap stocks, which is 16.68%, and would consider anything over 27% to be staggering. The ROE for SCGLY of 1.17% 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. SCGLY's pre-tax profit margin is 2.48%, thus failing this criterion.

YIELD: [FAIL]

The company in question should have a yield that is high and that can be maintained or increased. SCGLY's current yield is not available (or one is not paid) at the present time, while the market yield is 2.74%. Hence, this criterion cannot be evaluated.

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

Rating Change Detail - SOCIETE GENERALE SA (ADR) (SCGLY) - 2/22/2013

Detailed Analysis of SOCIETE GENERALE SA (ADR) (SCGLY)

Strategy: Contrarian Investor - Based on: David Dreman