Validea Martin Zweig Strategy Daily Upgrade Report

Validea's Growth Investor model, leveraging Martin Zweig's historically successful strategy, has significantly upgraded four stocks: First American Financial (FAF) to 85%, XP Inc (XP) to 92%, NatWest Group (NWG) to 85%, and Nomura Holdings (NMR) to 97%. These increases, with XP and Nomura achieving 'strong interest' status (90%+), signal that these companies now align with the model's criteria for growth stocks exhibiting accelerating earnings and sales, reasonable valuations, and low debt, potentially identifying new investment opportunities.

Analysis

A quantitative screen based on Martin Zweig's growth investing strategy has identified significant fundamental improvements across four financial sector stocks, resulting in substantial rating upgrades. Nomura Holdings (NMR) and XP Inc. (XP) received the strongest endorsements, with their scores rising to 97% and 92% respectively, placing them in the 'strong interest' category. NMR passed nearly all of the model's criteria, including metrics for sales growth, earnings acceleration, and valuation, failing only on 'Earnings Persistence'. Similarly, XP demonstrated strength across almost all earnings-related tests but failed on 'Sales Growth Rate'. The other two firms, First American Financial (FAF) and NatWest Group (NWG), saw their ratings increase to 85%, indicating 'some interest'. FAF passed most short-term momentum indicators but failed on 'Earnings Persistence' and 'Long-Term EPS Growth', suggesting potential questions about the durability of its performance. NWG showed strength in its valuation and current quarter earnings but failed on 'Revenue Growth in Relation to EPS Growth' and 'Earnings Growth Rate for the Past Several Quarters', pointing to a possible inconsistency in its recent growth trajectory. Notably, all four companies passed the tests for reasonable P/E ratios and positive insider transactions, signaling alignment between valuation and management confidence.

Key Decisions for Investors

• Investors seeking growth opportunities in the financial sector should prioritize further diligence on Nomura (NMR) and XP Inc. (XP), as their scores above 90% indicate the strongest alignment with the model's criteria for accelerating earnings and sales at a reasonable price.
• For First American Financial (FAF) and NatWest Group (NWG), the upgrades warrant attention, however, the specific failed criteria—FAF's lack of earnings persistence and long-term growth, and NWG's inconsistent multi-quarter earnings—should be treated as key risk factors to monitor.