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David Dreman founded Dreman Value Management and grew the mutual fund to a whopping $22 billion, but that was in 2007. Since then, the size of Dreman Value Management has dwindled to just over $5 billion. While the numbers still aren’t nothing to sneeze at, it brings to mind worries that Dreman may be on a downward swing. After all, since the end of June, Dreman’s top 25 stock picks have lost 16%, well underperforming the S&P 500 for the same period.

Here are David Dreman’s top stock picks at the end of June:

Company

Ticker

Value (x1000)

Activity

Return Since June

ANADARKO PETROLEUM CORP

(NYSE:APC)

51826

1%

-12%

AURICO GOLD INC

(NYSE:AUQ)

49996

New

21%

HOSPITALITY PROPERTIES TRUST

(NYSE:HPT)

48232

3%

-7%

ATWOOD OCEANICS INC

(NYSE:ATW)

48139

3%

-14%

N C R CORP NEW

(NYSE:NCR)

47976

3%

-15%

PORTLAND GENERAL ELECTRIC CO

(NYSE:POR)

47935

3%

-8%

HEALTHSPRING INC

(NYSE:HS-OLD)

46843

-27%

-21%

O M GROUP INC

(NYSE:OMG)

44740

3%

-29%

BRINKS CO

(NYSE:BCO)

44593

3%

-23%

OWENS & MINOR INC NEW

(NYSE:OMI)

44538

3%

-19%

WORTHINGTON INDUSTRIES INC

(NYSE:WOR)

44528

New

-33%

BARNES GROUP INC

(NYSE:B)

44003

-1%

-15%

DEVON ENERGY CORP NEW

(NYSE:DVN)

43875

1%

-20%

CHARLES RIVER LABS INTL INC

(NYSE:CRL)

43699

-5%

-20%

APACHE CORP

(NYSE:APA)

43178

1%

-20%

BRINKER INTERNATIONAL INC

(NYSE:EAT)

42836

-7%

-11%

C B L & ASSOCIATES PPTYS INC

(NYSE:CBL)

42680

3%

-23%

BANK OF HAWAII CORP

(NYSE:BOH)

42436

3%

-15%

ALLETE INC

(NYSE:ALE)

41959

3%

-7%

ALERE INC

(NYSE:ALR)

41901

3%

-38%

COMMONWEALTH REIT

(CWH)

41852

3%

-23%

SUPERIOR ENERGY SERVICES INC

(NYSE:SPN)

41705

-12%

-15%

CACI INTERNATIONAL INC

(NYSE:CACI)

41682

-9%

-18%

AIRCASTLE LTD

(NYSE:AYR)

41661

3%

-9%

ASSOCIATED BANC CORP

(NASDAQ:ASBC)

41474

New

-26%

Dreman’s largest losses were in Alere (ALR). He has lost 38% in his position since end of the second quarter. The in vitro and in vivo diagnostic substances company is a favorite of Seth Klarman; his Baupost Group is the world’s 11th largest hedge fund (check out Klarman’s top stock picks).

Dreman also lost big in Worthington Industries Inc (WOR). Worthington, which is a new position for Dreman, lost 33% since the end of June. Worthington, which is involved in steel works, blast furnaces and finishing mills, is one of those companies you don’t hear much about but a lot of big players hold positions there. For instance, Chuck Royce of Royce & Associates (see Royce’s top stock picks) and Israel Englander of Millennium Management are both fans of Worthington, each holding significant positions in the company.

Out of Dreman’s top 25 stock picks, his only winning position has been in Aurico Gold Inc (AUQ). His position in the company, which is a new position, gained 21% since the end of June. This is a strategy that several big time hedge fund managers have employed lately, opting to use the commodity as a buffer against economic fluctuations. Seth Klarman has recently been very vocal about this strategy.

All in all, we like Dreman, but are worried that he may be in a bit of a slump. The most well-known stocks in his portfolio are NCR, APA, APC, and DVN. The rest are smaller, lesser known names. Part of his strategy is to invest in lesser known names, hoping for a large payout and exploiting the pricing discrepancies that come with them. This means that large losses are somewhat common, as well as large gains, like his gold position. However, for a private investor, the stakes are just too high to mirror Dreman.

Source: David Dreman's Favorite Stock Picks