Blogging Stocks | January 17, 2011 | Steve Halpern
“Telefonica SA (TEF) is a member of our model portfolio; it meets 100% of the criteria we use in our James P. O’Shanghnessy growth and value model,” notes John Reese.
The editor of Validea explains, “The company operates in three business areas: Telefonica Spain, Telefonica Latin America and Telefonica Europe.”
He continues, “The O’Shanghnessy approach — called 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. TEF’s market cap of $104,501 million passes this test.
“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 ($1.21). TEF’s cash flow per share of $17.48 passes this test.
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