Cincinnati Financial and Versant Hit the Casualty List
Posted: October 06, 2026
October 5, 2026 (Maple Hill Syndicate) – Some people like to care for injured birds. I like to pick battered stocks.
That’s the point of my quarterly Casualty List. It highlights stocks that have been beaten up in the quarter just concluded, and that I think have potential to recover and thrive.
In the third quarter, the S&P 500 showed a small gain, thanks to a resurgence by popular big technology stocks. But most stocks struggled. Among those that declined 10% or more, here are some of my favorites.
Cincinnati Financial
Down 13% in the third quarter, Cincinnati Financial Corp. (CINF) insures cars and homes nationwide. About 28% of its policies are in Ohio, Illinois and Indiana. In August, those states were hit by tornados and other high winds, causing an above-average volume of insurance claims.
Buying on bad news that’s real but temporary is often a good investment technique. Cincinnati Financial achieved a 17% return on stockholders’ equity in the past four quarters. (I consider 15% or above good.) The company has very little debt, and the stock sells for a modest multiple, eight times earnings.
Versant Media
Analysts aren’t sure what to make of Versant Media Group (VSNT), which was spun out of Comcast Corp. in January. Comcast bequeathed to Versant a collection of properties including CNBC, Fandango, Golf Channel, MSNBC, Oxygen, Rotten Tomatoes, and USA Network.
So far, only eight analysts cover it. Two say “buy,” five say “hold” and one says “underperform.” The stock fell 11% in the third quarter and sells for only six times earnings because many of its properties are cable properties, and people regard cable as a dying medium.
I think the analysts are too gloomy on this one.
Healthcare Services
Based in Bensalem, Pennsylvania, Healthcare Services Group Inc. (HCSG) provides housekeeping, dietary services, laundry and linen to hospitals, nursing homes, and retirement communities. It has shown a profit 29 years in a row.
The balance sheet is clean (debt is a mere 3% of equity), and the company earned 24% on stockholders’ equity in the past four quarters. The financial press ignores the company, and Wall Street doesn’t pay much attention.
The stock fell 16% in the third quarter. Part of that was simple profit-taking, since it had advanced about 150% in the 15 preceding months.
Taboola.com
Down a whopping 37% was Taboola.com Ltd. (TBLA), a New York City company that connects advertisers to publications, websites and television. Second-quarter revenue missed analysts’ estimates, and the company reduced its guidance.
After five years of red ink, Taboola.com turned profitable in 2025. This year, earnings are up, Analysts expect them to fall (but stay positive) in 2027, then resume growth in 2028 and beyond. At this writing, the stock sells for eight times earnings.
Dorman Products
I have two reasons to be biased in favor of Dorman Products Inc. (DORM). Its name resembles mine. And I owned it many years ago, with excellent results. That said, these shares look attractive to me after sliding 10% in the third quarter.
Based in Colmar, Pennsylvania, Dorman makes fasteners and replacement parts for cars – more than 1,000 parts in all. It benefits from the trend for people to keep their cars longer.
The shares sell for 13 times the earnings analysts expect in the next four quarters. That seems pretty reasonable for a company that grew earnings at an 18% annual pace over the past five years.
Performance
Beginning in June 2000, I’ve compiled 93 Casualty Lists (today’s is the 94th). One-year returns can be calculated for 90 lists, and they have averaged 15.7%. That beats the average for the Standard & Poor’s 500 Total Return Index over the same periods, which was 12.0%.
Bear in mind that my column results are hypothetical and shouldn’t be confused with results I obtain for clients. Also, past performance doesn’t predict the future.
Of the 90 columns, 57 were profitable and 42 beat the index.
My picks from a year ago, however, were bad. Four of my five selections declined, leading to an average loss of 14.6%. The S&P 500 was up 15.9%, including dividends. My worst recommendation was Amdocs Ltd. (DOX), a software provider to the communications and media industries. It declined almost 27%.
Also on the losing side were Hormel Foods Corp. (HRL), LKQ Corp. (LKQ) and Ingredion Inc. (INGR). My only gainer was Eastman Chemical Co. (EMN), and it wasn’t up by much, about 7%.
Disclosure: Katharine Davidge, my wife and a portfolio manager at my firm, owns Ingredion personally and for some clients.
John Dorfman is chairman of Dorfman Value Investments LLC in Boston, Massachusetts. He or his clients may own or trade securities discussed in this column. He can be reached at jdorfman@dorfmanvalue.com.