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We like money managers who are willing to share their investment ideas with the public. David Dreman, founder and chairman of Dreman Value Management, is one of these managers. He has authored four books and published many scholarly articles. He is also the writer of a column for Forbes magazine, the co-editor of Journal of Psychology and Financial Markets and is on board of directors of the Institute of Behavioral Finance, which publishes Journal of Behavioral Finance. Dreman was managing about $22 billion in 2007 but was hit hard by the financial crisis in 2008. Currently, he has about $5 billion under management.

In this article, we are going to focus on the stocks sold out by Dreman over the third quarter. Below is a list of such stocks. Dreman invested at least $1 million in these stocks at the end of June, but did not report owning any shares of these stocks at the end of September.

Company

Ticker

Value (x1000)

CAL DIVE INTERNATIONAL

DVR

40357

AARONS INC

AAN

34524

CENTRAL EUROPEAN DISTRIBUTN

CEDC

19017

SCOTTS MIRACLE GRO CO

SMG

17767

AMERON INTERNATIONAL

AMN

17502

M K S INSTRUMENTS INC

MKSI

8253

SUPERVALU INC

SVU

6256

LUBRIZOL CORP

LZ

4417

D P L INC

DPL

3779

GLAXOSMITHKLINE PLC

GSK

3772

KINETIC CONCEPTS INC

KCI

3681

BRITISH AMERICAN TOBACCO PLC

BTI

3549

CHICAGO BRIDGE & IRON CO N V

CBI

3333

REGIS CORP MINN

RGS

2948

HUDSON CITY BANCORP INC

HCBK

2643

COMPANHIA DE SANEAMENTO BASICO

SBS

2307

Aarons Inc (NYSE:AAN): At the end of June, Dreman disclosed to own $34.5 million worth of AAN stocks. The fund sold out its stake in AAN over the third quarter. AAN returned 5.66% since the end of September, versus 12.41% for SPY during the same period. It has a market cap of $2.0B and a P/E ratio of 19.11. John Overdeck and David Siegel’s Two Sigma Advisors sold out its AAN stake in the third quarter as well.

GlaxoSmithKline Plc (NYSE:GSK): Over the third quarter, Dreman sold out all $3.8 million worth of GSK shares. The stock returned 11.94% since the end of September, slightly underperforming SPY’s 12.41% return. It has a market cap of $115B and a P/E ratio of 22.49. Besides Dreman, Louis Navellier also sold out all his stake in GSK over the third quarter.

British American Tobacco Plc (NYSEMKT:BTI): BTI is another mega cap stock that Dreman sold out during the third quarter. At the end of the second quarter, Dreman had $3.5 million invested in BTI. The stock returned 11.04% since the end of September, versus 12.41% for SPY during the same period. The $93 billion market cap stock has a P/E ratio of 18.63. Steven Cohen's SAC Capital Advisors also sold out its BTI stake in the third quarter.

Dreman also sold out all his stakes in Scotts Miracle Group co (NYSE:SMG), Chicago Bridge & Iron Co (NYSE:CBI), Hudson City Bancorp Inc (NASDAQ:HCBK) and Companhia De Sandeamento Basico (NYSE:SBS). We recommend investors to be cautious about the stocks that Dreman is no longer in favor of.



Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 16 Big Sells By David Dreman