David Dreman, chairman and chief investment officer of Dreman Value Management LLC, announced back in September he was passing the investment baton of his 33-year-old company to E. Clifton Hoover, who joined Dreman in 2006.
Among other topics, we asked Hoover how he plans to fill Dreman’s clown-sized shoes.
For those unaware of Dreman Value Management, what’s your elevator pitch?
We’re contrarion investors. We like good companies that are temporarily out of favor where the market shows a major overreaction. In other words, we won’t follow the herd.
How about a few examples?
Ryan Air is one. The volcanic activity over Iceland last summer had people dumping the stock. They were at 20 times earnings and dropped to 12 times earnings, and there was every indication they’ll be right back where they were. A few years ago, Merck and the Vioxx scare was very good for us. And British Petroleum, believe it or not, is a strong company that was obviously hurt by the spill. We’re not looking for companies that are in a deep turnaround that might not make it. We look for companies that are only temporarily out of favor. So early 2009 was a dream for us.