Validea David Dreman Strategy Daily Upgrade Report

Validea's Contrarian Investor model, which applies David Dreman's strategy, recently upgraded Ultrapar Participacoes SA (UGP) and Orange SA (ORANY) based on their underlying fundamentals and valuation. UGP, a mid-cap Oil & Gas operator, saw its rating increase from 69% to 83%, signaling investor interest. Orange SA, a large-cap Communications Services company, also received an upgrade from 61% to 69%, though this score remains below the 80% threshold typically indicating strong interest from the strategy.

Analysis

The following are today's upgrades for Validea's Contrarian Investor model based on the published strategy of David Dreman. This contrarian strategy finds the most unpopular mid- and large-cap stocks in the market and looks for improving fundamentals. ULTRAPAR PARTICIPACOES SA (ADR) (UGP) is a mid-cap value stock in the Oil & Gas Operations industry. The rating according to our strategy based on David Dreman changed from 69% to 83% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest. Company Description: Ultrapar Participacoes SA is a Brazil-based company primarily engaged in the automotive fuel retail. The Company operates in five segments: Gas distribution (Ultragaz), which distributes liquefied petroleum gas (LPG) to residential, commercial and industrial consumers in the South, Southeast and Northeast regions of Brazil; Fuel distribution (Ipiranga), which operates the distribution and marketing of gasoline, ethanol, diesel, fuel oil, kerosene, natural gas for vehicles and lubricants, as well as provides related activities across the Brazilian territory; Chemicals (Oxiteno), which produces ethylene oxide, as well as its primary derivatives and fatty alcohols; Storage (Ultracargo), which operates liquid bulk terminals, primarily in the Southeast and Northeast regions of Brazil, and Drugstores (Extrafarma), which trades pharmaceutical, hygiene and beauty products through its drugstore chain in the states of Para and Piaui, among others. The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria. | MARKET CAP: | PASS | | EARNINGS TREND: | PASS | | EPS GROWTH RATE IN THE IMMEDIATE PAST AND FUTURE: | FAIL | | P/E RATIO: | PASS | | PRICE/CASH FLOW (P/CF) RATIO: | PASS | | PRICE/BOOK (P/B) VALUE: | FAIL | | PRICE/DIVIDEND (P/D) RATIO: | FAIL | | CURRENT RATIO: | PASS | | PAYOUT RATIO: | PASS | | RETURN ON EQUITY: | PASS | | PRE-TAX PROFIT MARGINS: | FAIL | | YIELD: | PASS | | LOOK AT THE TOTAL DEBT/EQUITY: | FAIL | Detailed Analysis of ULTRAPAR PARTICIPACOES SA (ADR) ORANGE SA (ADR) (ORANY) is a large-cap growth stock in the Communications Services industry. The rating according to our strategy based on David Dreman changed from 61% to 69% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest. Company Description: Orange SA is a France-based multi-service telecommunications operator. The Company operates seven segments: France, Spain, Europe, Africa & Middle East, Enterprise, International Carriers & Shared Services, Orange Bank. France includes all fixed and mobile communication services to consumers and companies as well as services for carriers. Spain covers fixed line and mobile telephony and fiber. Europe (Poland, Belgium, Luxembourg, Romania, Slovakia, and Moldova) provides high-speed fixed and mobile broadband. Africa & Middle East primarily operates in the mobile markets but also provides telephony and fixed Internet services. Enterprise provides digital transformation support. International Carriers & Shared Services includes international carrier and the activities of OCS and Orange Studio in content, among others. Orange Bank provides mobile financial services. Orange SA is the parent company of the Orange group. The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria. | MARKET CAP: | PASS | | EARNINGS TREND: | PASS | | EPS GROWTH RATE IN THE IMMEDIATE PAST AND FUTURE: | FAIL | | P/E RATIO: | FAIL | | PRICE/CASH FLOW (P/CF) RATIO: | PASS | | PRICE/BOOK (P/B) VALUE: | FAIL | | PRICE/DIVIDEND (P/D) RATIO: | PASS | | CURRENT RATIO: | PASS | | PAYOUT RATIO: | FAIL | | RETURN ON EQUITY: | FAIL | | PRE-TAX PROFIT MARGINS: | FAIL | | YIELD: | PASS | | LOOK AT THE TOTAL DEBT/EQUITY: | PASS | Detailed Analysis of ORANGE SA (ADR) About David Dreman: Dreman's Kemper-Dreman High Return Fund was one of the best-performing mutual funds ever, ranking as the best of 255 funds in its peer groups from 1988 to 1998, according to Lipper Analytical Services. At the time Dreman published Contrarian Investment Strategies: The Next Generation, the fund had been ranked number one in more time periods than any of the 3,175 funds in Lipper's database. In addition to managing money, Dreman is also a longtime Forbes magazine columnist. About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Validea's Contrarian Investor model, based on David Dreman's strategy, has upgraded Ultrapar Participacoes SA (UGP) and Orange SA (ORANY), signaling potential revaluation opportunities. UGP, a mid-cap oil & gas operator, saw its rating increase significantly from 69% to 83%, crossing the 80% threshold indicating "some interest" from the strategy. ORANY, a large-cap communications services firm, also received an upgrade from 61% to 69%, though it remains below the 80% interest threshold. UGP's upgrade reflects improving fundamentals and valuation, despite failing criteria like EPS growth, Price/Book, Price/Dividend, Pre-Tax Profit Margins, and Total Debt/Equity. The company passed key value metrics including Market Cap, Earnings Trend, P/E Ratio, Price/Cash Flow, Current Ratio, Payout Ratio, Return on Equity, and Yield, underpinning its contrarian appeal as an unpopular stock with emerging strengths. Orange SA's upgrade to 69% indicates a more modest improvement in its contrarian profile compared to UGP, failing more fundamental criteria such as EPS growth, P/E Ratio, Price/Book, Payout Ratio, Return on Equity, and Pre-Tax Profit Margins. While it passed on Market Cap, Earnings Trend, Price/Cash Flow, Price/Dividend, Current Ratio, Yield, and Total Debt/Equity, the lower overall score suggests less conviction from the Dreman model at this time.

Key Decisions for Investors

• For UGP, the significant upgrade to 83% suggests it warrants closer examination for its contrarian value potential, particularly given its strong performance on several key value metrics; investors should monitor for continued fundamental improvements, especially in areas like EPS growth and debt-to-equity, before initiating or increasing positions.
• For ORANY, while upgraded, its 69% score indicates less conviction from the contrarian strategy, suggesting a more cautious approach; investors should consider its strong points against its numerous failed fundamental criteria and await further improvements that could push its score above the 80% threshold for 'some interest'.