Chris Davis

Chris Davis

Last Update: 11-14-2016

Number of Stocks: 135
Number of New Stocks: 5

Total Value: $22,938 Mil
Q/Q Turnover: 5%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Chris Davis Watch

  • Express Scripts to Include Harvoni in Hepatitis Cure Value Program

    As announced by Express Scripts (NASDAQ:ESRX) through PR Newswire Dec. 12, the program that targets the treatment of patients affected with the hepatitis C virus, called “Hepatitis Cure Value Program,” will be upgraded with another product in January.

    Gilead Sciences' (NASDAQ:GILD) Harvoni will be added to AbbVie's (NYSE:ABBV) Viekira Pak for the treatment of HCV patients.


  • Davis Advisers' Best Investments This Year

    Davis Selected Advisers manages more than $60 billion across several different asset classes and is the portfolio manager of Davis Financial Fund. The following are the best performers of his investments.

    Encana Corp. (ECA) with a market cap of $8.82 billion has gained 113.1% year to date. The guru's stake represents 8.63% of the company's outstanding shares and 2.52% of the guru's total assets.


  • T Rowe Price Is Buying These 9 Stocks

    T Rowe Price Equity Income Fund manages a portfolio composed of 110 stocks with a total value of $21.024 billion. In both the second and third quarters the investment firm bought shares in the following stocks.

    EQT Corp. (EQT)


  • Davis New York Venture Fund Fall Commentary

  • Amazon Seeks to Start Delivery Service

    In an attempt to combat parcel couriers everywhere, Amazon (NASDAQ:AMZN) is laying the groundwork for its own shipping business.

    Amazon executives claim that by undertaking a delivery business, it will help with delivery capacity during the holiday season. However, current and former Amazon managers and business partners claim the retailer has grander plans than it has acknowledged.


  • Ruane Cunniff Cuts Allergan, Berkshire, IBM

    Ruane Cunniff (Trades, Portfolio) is a value investor focused on the intrinsic value of business. It manages a portfolio composed of 118 stocks with a total value of $10.499 billion. During the second quarter the guru traded the following stocks.

    The investor reduced shares in Berkshire Hathaway Inc. Class A (BRK.A) by 19.52% with an impact of -2.78% on the portfolio.


  • 9 Stocks Chris Davis Keeps Buying

    Chris Davis (Trades, Portfolio) is the portfolio manager of Davis Financial Fund, a fund that holds 134 stocks with a total value of $22,661 million. In both the first and second quarters, the guru bought shares in the following stocks:

    Simon Property Group Inc. (SPG)


  • Apache Announces Discovery of Oil in West Texas

    Apache Corp. (NYSE:APA), an independent energy company, announced the discovery of 2 billion to 3 billion barrels of oil in a West Texas field on Wednesday.

    The area, being referred to as “Alpine High,” is located near the Davis Mountains in Reeves County and has been previously overlooked due to the belief it would not be fit for hydraulic fracturing. According to Apache, the find could be worth at least $8 billion and has the potential to become one of the biggest energy finds of the past decade.


  • David Funds Comments on Encana

    Our fourth representative holding is the Canadian shale oil and gas company Encana (NYSE:ECA), a business that fits all three of these criteria. Based on global supply and demand projections for oil, we do not believe the current price of $45 per barrel is sustainable.10 In our view, oil prices will have to increase significantly over time to provide enough supply to meet growing global demand. In addition, because Encana’s reserves are located in the core of four of the top six shale areas in North America, Encana’s costs to develop and produce oil and gas are quite low.

    Moreover, Encana’s reserves of oil and gas are so large the company has decades of production ahead based on current production levels.


  • David Funds Comments on Tencent

    Given Tencent (HKSE:00700)’s key position in Naspers’ business, examining Tencent’s operations more closely is worthwhile. Tencent is led by Chinese entrepreneur Ma Huateng, also known as Pony Ma. The company’s messaging app WeChat has 700 million users and is the leading social media website in China. In addition, Tencent is one of the world’s largest video gaming companies with such popular games as League of Legends, CrossFire and Dungeon Fighter Online as well as an 84% stake in one of the world’s leading mobile video gaming companies Supercell. In addition, Tencent has built a highly desirable portfolio of strategic investments in other leading Internet companies such as e-commerce company, U.S. video game leader Activision Blizzard, China’s ride-sharing leader Didi Chuxing, and classified ads leader Through our investment in Naspers we are effectively investing in Tencent at a 15% discount and paying 23 times 2017 owner earnings for a company growing revenues and earnings at 25% to 30% a year.


  • David Funds Comments on Naspers

    A third representative holding is Naspers (NPN), a company most investors would not recognize despite its $60 billion market capitalization. Naspers is a South African conglomerate that owns a diverse array of media and Internet holdings in emerging markets. The company’s satellite TV business is the largest in Africa with 10 million subscribers, and its online classified ad business operates in 31 countries with leading positions in key markets such as Brazil, India, Indonesia, and Russia. Naspers also owns 15% of Flipkart, one of the leading e-commerce businesses in India. Moreover, in 2010 Naspers invested $34 million in Tencent Holdings, one of China’s largest, most innovative and most used Internet portals, and today the company’s 34% stake is worth $72 billion. Considering that Naspers total market capitalization is $60 billion and also includes other assets, the company’s valuation is attractive in our view.


  • David Funds Comments on United Technologies

    United Technologies (NYSE:UTX) is a good example of a company with both a durable business and an innovative culture. United Technologies’ four business segments are of roughly equal size and include Pratt & Whitney jet engines and aerospace parts such as landing gear and nacelles (the outer casing of an aircraft engine), Otis Elevator, and Carrier heating and ventilation systems. Pratt & Whitney, for example, enjoys solid growth prospects driven by increased global travel as well as a favorable market structure with only one key competitor in the narrow body or single aisle commercial aircraft business. Moreover, Pratt & Whitney is now rolling out its new PurePower Geared Turbofan (GTF) jet engine that, according to United Technologies, reduces fuel consumption by 16%, environmental emissions by 50% and noise levels during landing and takeoff by 75%.8 According to industry observers, Pratt & Whitney’s GTF jet engine represents one of the biggest advances in jet engines in the past 50 years, which could result in strong sales going forward. At $100 a share, United Technologies is trading at an attractive 15.5 times 2016 owner earnings.9


  • David Funds Comments on Amazon

    Adaptability not only results in pricing power but also the ability to create new markets. Amazon (NASDAQ:AMZN) provides a prime example. Looking back at Amazon’s humble beginnings in 1994, clearly one of the reasons the company became the world’s largest bookseller was that Amazon created entirely new markets. The Kindle E-reader was not only a product innovation but also a business model innovation. Printing and shipping costs suddenly disappeared, combining improved convenience for consumers with higher profits for Amazon. Company founder Jeff Bezos and his team then proved they would not be satisfied to sit on their laurels by parlaying their expertise in cloud computing, gained from running their retail business, to an Infrastructure as a Service (IaaS) business for third parties. Thus, was born Amazon Web Services (AWS), which reached $10 billionin sales even faster than Amazon’s retail business and which one day might surpass the retail segment in size.7


  • Davis Global Fund Semi-Annual Review 2016

  • Davis Opportunity Fund Semi-Annual Review 2016

  • Chris Davis Buys Activision Blizzard, Sells

    Davis Advisors manages more than $60 billion across several different asset classes. Chris Davis (Trades, Portfolio) is the portfolio manager of Davis Financial Fund. The following are its largest trades of the second quarter.

    The guru closed his stake in Las Vegas Sands Corp. (LVS) with an impact of -1.5% on the portfolio.


  • Chris Davis Buys New Oriental Education

    During the second quarter, guru Chris Davis (Trades, Portfolio) purchased 322,708 shares of New Oriental Education (NYSE:EDU), at an average price of $39.40. The trade had a 0.06% impact on Davis’s portfolio. Since Davis purchased the stake, the company has risen an estimated 7% in price.

    New Oriental Education has a market cap of $6.59 billion, an enterprise value of $5.15 billion, a P/E ratio of 29.23 and a P/B ratio of 4.75.


  • Guru Stocks That Outperform the S&P 500

    The following are some of the stocks that outperformed the Standard & Poor's 500 Index over the last 12 months and were bought by gurus during the last quarter.

    Federal Realty Investment Trust (FRT), with a market cap of $11.87 billion, has outperformed the S&P 500 Index by 22.4% during the last 12 months. Currently three gurus are holding the company that has returned 16%-plus year to date and 94%-plus during the last five years; it is now trading with a P/E(ttm) ratio of 48.37, and according to the DCF calculator it looks overpriced by 465% at the price of $167.35. Over the last 12 months the company’s revenue has grown by 6% and EPS has grown by 10%.


  • High Dividend Yield Companies Attract Gurus

    The All-in-One Screener listed Hewlett-Packard Co. (NYSE:HPQ) and International Business Machines Corp. (NYSE:IBM) as two high dividend yield computer hardware stocks. Due to these high dividend yields, many gurus have very large positions in these stocks.

    Screening for big dividends


  • Chinese Internet Site Baidu Among Stocks to Buy

    Baidu Inc. (NASDAQ:BIDU), a Chinese Internet media site, appeared on gurus’ watch radar as the company’s stock price decreased below P/E expectations.

    Incorporated in the Cayman Islands Jan. 18, 2000, Baidu offers its users an interactive search service on common topics like news, restaurants and sports. As its stock price decreased and its financials improved, Baidu made Barron’s stock watch list May 26.


  • Lending Club CEO Resigns, Stock Sinks Amid Loan Discrepancies

    Lending Club (NYSE:LC), a peer-to-peer online lending company, has sunk 63% year to date and lost its CEO Renaud Laplanche, who resigned Monday after an internal investigation found sales of $22 million in near-prime loans to a single investor, contrary to the investor’s instructions.

    The New York Times reported that a Lending Club employee found the dates on $3 million of loan applications had been altered and alerted Laplanche, who then told an internal auditor. That investigation would also reveal discrepancies in the aforementioned $22 million of loans. The company also discovered Laplanche had failed to disclose a personal interest in an investment fund in which Lending Club was considering investing.


  • Arnold Van Den Berg's Largest Buys in 1st Quarter

    Arnold Van Den Berg is a value investor who founded Century Management in 1974. He applies value investment strategies as his investment philosophy. He focused his first-quarter buys as follows:

    The guru increased his stake in Allegheny Technologies Inc. (ATI) by 66.47%  with an impact of 2.16% on the portfolio.


  • 2 Stocks Super Investors Are Buying

    GuruFocus provides tools and screens to look at 13-F filings in the aggregate and discover lots of information about the famous gurus of value investing. I used the aggregated portfolio tool to sort guru holdings on combined weighting percentage. This shows us which stocks value investment gurus have allocated the most funds to.

    Since J. L. Kelly Jr. came up with the Kelly Criterion in 1956, we know the amount you should bet increases strongly as the odds are more favorable. Great investors put the math behind the principle in practice by betting big on their highest conviction picks. True, there are a few things messing up that logic. Tax considerations can also play a role in buy and sell decisions and cause investors to hang on to fairly valued stocks.


  • Liberty Broadband, Hanmi Bank Among Popular Micro-Cap Stocks

    Much like small-cap stocks, micro-caps offer a chance of a high return, but also present more risk and volatility. Micro-caps are generally defined as companies with a capitalization between $50 million and $300 million.

    The All-in-One Screener offers more than 150 filters to sort stocks, including a filter to sort by market cap. The following five stocks were some of the most popular micro-caps purchased by the gurus during the fourth quarter.


  • Top Insiders' Buys and Sales of the Week

    The All-in-One Screener can be used to find insider buys and sells over the last week by clicking on the Insiders tab and changing the settings for All Insider Buying to “$1,000,000+” and duration to "March 2016."

    According to the above filters, the following are recent buys and sells from company insiders in the past week.


  • Chris Davis Slashes His Position in PH Glatfelter

    Chris Davis (Trades, Portfolio) is a portfolio manager for the Davis Large Cap Value portfolios and a member of the research team for other portfolios within the firm. Davis Advisors was founded in 1969 offering clients investment opportunities through mutual funds, variable annuities, separately managed accounts and offshore funds. Throughout the course of the company's history, its primary focus has been to invest in securities at value prices and hold them for long-term growth. Davis has a firm belief that perspective, discipline and alignment are the three most important drivers for long-term investment success.

    In the first quarter of 2016, Davis slashed his position in PH Glatfelter Co. (NYSE:GLT) by nearly 30%.


  • Chris Davis Buys Stake in Energy Firm Apache

    Chris Davis (Trades, Portfolio) is a portfolio manager for the Davis Large Cap Value Portfolios. Davis Selected Advisors was founded in 1969, offering clients investment opportunities through mutual funds, variable annuities, separately managed accounts, and offshore funds. Throughout the course of the company's history, their primary focus has been to invest in securities at value prices and hold them for long term growth. Davis has a firm belief that perspective, discipline and alignment are the three biggest drivers for long term investment success.

    In the fourth quarter of 2015, Davis purchased 13,300,208 shares of Apache Corporation (NYSE:APA).


  • Cummins and CSX: Undervalued With Predictable Business

    According to GuruFocus’ All-in-One Screener, the following stocks have a high business predictability rating, and at least five gurus are shareholders in the companies.

    Cabot Oil & Gas Corp. (COG)


  • Investor Chris Davis Comments on Amazon

    Today technology is accelerating the pace of disruption. This change is best seen by contrasting the history of a past disrupter Walmart with a new disrupter Amazon (NASDAQ:AMZN). Walmart opened its first store in 1962 and, with its everyday low pricing model, strong management and tight cost control, enjoyed real competitive advantages relative to the much larger and better regarded existing competition. Eighteen years later, the company reached $1 billion in sales and today has sales approaching $500 billion, dwarfing its competitors such as Kmart and Sears that have largely been left in the dust. In contrast, Amazon has disrupted entrenched competitors in a matter of years not decades. Remembering Walmart took 18 years to reach sales of $1 billion, we consider it astonishing that Amazon was selling approximately $95 billion worth of merchandise in its 18th year, almost 100 times more than Walmart sold during the comparable period in its history.

    With Amazon achieving success at such a rapid pace, investors who were slow to study the company because of its short operating history not only missed out on its potential as an investment but also were slow to identify the threat it posed to so many other retailers. Companies ranging from Borders and Blockbuster to Circuit City and RadioShack have already filed for bankruptcy and many more are sure to follow. While extraordinary, Amazon is hardly a lone example. Companies such as Google, Netflix and Facebook have overpowered many traditional media businesses, Uber and AirBNB are challenging the taxi and hotel industries, and a number of new companies are using biotechnology to challenge traditional pharmaceutical businesses. The bottom line is technological disruption is rapidly changing the investment landscape, creating great opportunities for investors who can adapt and enormous risks for investors who cannot.


  • Davis New York Venture Fund 2016 Annual Review


    • Davis New York Venture Fund has built shareholder wealth over time. Over the most recent one, three and five year periods, a $10,000 investment grew to $10,297, $14,763, and $15,846, respectively.1

  • Davis Global Fund 2016 Annual Review

    Davis Global Fund Annual Review:

    Davis Global Fund uses rigorous independent research to invest in durable, well-managed businesses with sustainable competitive advantages and attractive long-term growth prospects selling at a discount to their true value. Bottom-up stock selection performed by seasoned investment professionals—combined with our willingness not to mirror an index—has served our shareholders well over the long term.


  • Chris Davis Buys More Than 13 Million Shares of Apache Corporation

    Chris Davis (Trades, Portfolio), portfolio manager of Davis Financial Fund, bought 10 new stakes in the fourth quarter, including his most noteworthy deal of the quarter – the purchase of a 13,300,208-share stake in Apache Corporation (NYSE:APA), a Houston-based oil and gas company, for an average price of $46.74 per share. The deal had a 2.47% impact on Davis’ portfolio.

    Davis’ stake is 3.52% of Apache’s outstanding shares and 2.47% of Davis’ total assets. Apache’s leading shareholder among the gurus is Dodge & Cox with a stake of 26,014,684 shares. The stake is 6.88% of Apache’s outstanding shares and 1.14% of Dodge & Cox’s total assets.


  • Nominate an Investor for Guru of the Year

    As a tough year for money managers winds down, it’s time to nominate who you think performed best in 2015 for a special honor: GuruFocus Guru of the Year.

    Some of the most spotlighted firms slumped in 2015. David Einhorn (Trades, Portfolio)’s Greenlight Capital Offshore fell 16.9% and Leon Cooperman (Trades, Portfolio)’s Omega Overseas Partners fell 12% through Sept. 30, and Bill Ackman (Trades, Portfolio)’s Pershire Square Holdings dropped 9.6% through Oct. 13, according to HSBC.


  • HP, Microsoft Have High Dividend Yields in Davis' Portfolio

    Chris Davis (Trades, Portfolio) is the portfolio manager of Davis Financial Fund and manages more than $60 billion across several different asset classes.

    Transocean Ltd. (RIG)


  • John Burbank Jumps in Alphabet, Dollar Tree and Sells Rite Aid, NRG

    John Burbank is the chief investment officer of Passport Capital LLC, the global investment firm he founded in 2000. He manages a portfolio composed of 119 stocks with a total value of $5.55 billion. The following are his largest trades during the third quarter.

    The investor reduced his stake in Liberty Global PLC (LBTYK) by 62.48% with an impact of -3.09% on the portfolio.


  • Stakes Chris Davis Sold Out During the 3rd Quarter

    Davis Advisors Fund is an independent, employee-owned investment management firm founded in 1969. Chris Davis (Trades, Portfolio) is the portfolio manager of Davis Financial Fund, which has successfully managed money through many environments – including periods of inflation, recession, rising and falling energy prices, rising and falling interest rates and bull and bear markets. Following are its largest sales during the third quarter.

    Davis sold out shares of Corporate Office Properties Trust Inc. (OFC) for $22.59 per share. The deal had a -0.05% impact on Davis’ portfolio. Corporate Office Properties has had a long-term position in Davis' portfolio since 2010.


  • Chris Davis' Stocks Trading Below the Peter Lynch Value

    Chris Davis (Trades, Portfolio) is the portfolio manager of Davis Financial Fund, an independent, employee-owned investment management firm founded in 1969. Davis Advisors manages more than $60 billion across several different asset classes.

    Here are the stocks in his portfolio that are trading below the Peter Lynch value.


  • Chris Davis Raises Stake in United Technologies by Nearly 17,000%

    As portfolio manager for Davis Selected Advisors, Chris Davis (Trades, Portfolio) has his fingers on the pulse of more than $60 billion in assets. His investment strategy is to acquire durable businesses that are well-managed and value priced.

    Most of his high-profile deals in the third quarter involved reductions to existing stakes.


  • Chris Davis, David Dreman Are Bullish on Capital One

    Guru trades

    Chris Davis (Trades, Portfolio), Dodge & Cox, Hotchkis & Wiley and David Dreman (Trades, Portfolio) all added to their positions in Capital One Financial Corp. (NYSE:COF), while Tom Gayner (Trades, Portfolio) and Ken Fisher (Trades, Portfolio) initiated new positions. Dodge & Cox now owns over 9% of the company.


  • Insiders' Trades of the Week: Citizens Financial

    The All-In-One Screener can be used to find insider buys and sales over the last week by clicking on the Insiders tab and changing the settings for All Insider Buying/All Insider Selling to “$1,000,000+” and duration to "November 2015."

    According to the above filters, the following are the recent buys from company insiders in the past week.


  • Apple's New iPhone Has Massive Deal for Investors

    One of the prominent stocks most hedge fund managers like to keep in their portfolios is Apple (NASDAQ:AAPL). Among the hedge fund managers, Carl Icahn (Trades, Portfolio) is one of the largest holders of the stock. According to GuruFocus data, Apple makes up 21.21% of Carl Icahn (Trades, Portfolio)’s portfolio.

    Apple designs, manufactures and markets mobile communication and media devices, personal computers, watches and portable digital music players worldwide. It reported higher-than-estimated third-quarter earnings on Oct. 27. The stock has increased by 9.20% year to date and performed well as compared to Technology SPDR (ETF) [XLK]


  • Halvorsen Buys Amazon, Sells Out Micron Technology During Q2

    Andreas Halvorsen (Trades, Portfolio) is a founding partner of Viking Global Investors LP, which is a global investment firm founded in 1999 and has offices in Greenwich, N.Y., Hong Kong and London and is registered as an investment adviser with the U.S. Securities and Exchange Commission.

    He manages a portfolio composed of 56 stocks with a total value of $26.47 billion and during the last quarter he increased 20 stakes and reduced 19 of them, bought 18 new stocks and sold out 19 of his existing stakes. The following are the most weighted of the above trades.


  • CEO of Univar Inc. Buys 10,000 Shares

    Erik Fyrwald (Insider Trades), CEO of Univar Inc. (UNVR), bought 10,000 shares of the company on Sept. 30. The average price per share was $18.75, for a total transaction cost of $187,500. Univar is a global partner dedicated to improving quality of life through products, expertise, and relationships that serve the world’s industries. The company has a market cap of $2.43 billion and a P/S ratio of 0.26.

    There were nine insider transactions with the company since June. Two of these transactions were insider sales, both conducted by 10% owners, totaling 46,982,536 shares for an average price of $21.76 per share on June 23. Frywald bought a total of 30,000 shares of UNVR since June 2015. His earliest trade of 20,000 shares with the company at an average price of $22 per share decreased about 17% in value since the purchase. Month end price decreased since June, but there is not an inverse correlation to the number of insider buys. 1443728772127.png 1443728780790.png For more information about insider trades with Univar, click here.


  • Chris Davis' Holdings With Wide Margin of Safety

    Chris Davis (Trades, Portfolio) is the portfolio manager of Davis Financial Fund, an independent, employee-owned investment management firm founded in 1969. He manages a portfolio composed of 186 stocks with a total value of $28,521 million.

    The following are the stocks he holds that are trading with a wide margin of safety and with a very low P/E ratio.


  • CEO of Cousins Properties Buys 27,000 Shares of Company

    Lawrence Gellerstedt (Insider Trades), CEO and president of Cousins Properties Inc. (CUZ), bought 27,000 shares of the company on Sept. 11. The average price per share was $9.24, for a total transaction cost of $249,480. Cousins Properties is a real estate company that invests in urban office assets and mixed-use developments in the Sunbelt markets. The market cap for the company is $2.02 billion and the P/S ratio is 5.27.

    Insider buys of CUZ increased, while insider sales decreased from 2013 to 2015. There were a total of 28 CUZ insider sales of 1,722,593 shares in 2013 alone, compared to one insider sale totaling 4,604 in 2014, and none from January to September 2015. On the other hand, there were no insider buys of CUZ during 2013, but five transactions totaling 321,943 shares, and four transactions of 152,000 shares in 2014 and January to September 2015 respectively. Gellerstedt made a total of 11 insider buys amounting to 152,611 shares of the company, and no insider sales since March 2007. His earliest insider buy decreased by about 70% since the purchase. CUZ CIO Michael Connolly (Insider Trades), also bought 38,807 shares of the company at an average price per share of $9.23 on Sept. 11. Additionally, Gregg Adzema (Insider Trades), CUZ executive vice president and CFO, bought 10,000 shares of the company at an average price of $9.08 per share on Sept. 10. 1442252401201.png 1442252421717.png For more information about insider transactions with Cousins Properties Inc., click here.


  • Davis Funds Comments on Whole Foods Market

    Whole Foods Market, Inc. (NASDAQ:WFM), the leading natural and organic grocer in America, experienced further challenges in the first half of 2015, with its stock price falling more than 20%, driven primarily by investor concerns about increasing competition from both grocers that focus on natural, minimally processed foods and traditional grocers, such as the Kroger Co. In addition to seeking­ to provide increased value to its traditional shoppers, Whole Foods has announced an initiative to build market share by more directly targeting the millennial generation (those born after 1980) and the first generation to come of age in the new millennium who are known for their preferences for value and convenience. Whole Foods believes the new chain, named 365 by Whole Foods Market in reference to the company’s popular private label brand, has the same market potential as the Whole Foods Market chain. While the company has not been specific about the number of stores it plans to roll out in total, opening just eight hundred “365” locations combined with the eight hundred additional locations anticipated for the original Whole Foods chain would nearly quintuple the company’s store count, offering Whole Foods the prospect of generating above-average sales growth for years to come.

    In addition, we believe that Whole Foods’ logistics infrastructure is currently underutilized. This is particularly true of the company’s distribution centers, which were built to accommodate growth and are not used to their full capacity today. The faster the volume of business in these centers grows, the more efficient the distribution infrastructure becomes as fixed operational costs are spread over a greater amount of business. Increased sales from the company’s recently updated business model and from the rollout of the new chain of 365 stores should accelerate the use of those infrastructure assets, generating cost savings that can be reinvested for growth. Despite the near-term challenges, we have come to respect Mr. Mackey for his long-term view in managing the business and believe the capable team he has assembled is acting both decisively and quickly to respond to increased competition.


  • Davis Funds Comments on Nabors Industries Ltd.

    As noted in our year-end 2014 report, the performance of our energy holdings hurt performance late last year. These companies continued to be a contributor to the Fund’s relative performance, both on the upside and the downside, during the first half of 2015. The severe dislocation in the energy markets presented an opportunity to increase our investment in Nabors Industries Ltd. (NYSE:NBR), an independent contract driller known primarily as a leading provider of high specification land drilling rigs, at prices not seen since the 2009 recession.

    Much of the turmoil in energy stocks reflects companies across the board struggling to cope with the impact of lower oil and gas prices. Energy companies are seeking to preserve profitability by demanding price cuts from their suppliers who are doing their best to cut their own costs and extract price concessions from their suppliers. In contract drilling, as prices continue to fall across the board, less capable rig operators and smaller companies are losing business to stronger drillers. Given Nabors’ scale and fleet quality, the company is well positioned to capital­ ize on the eventual turn in the cycle.


  • Davis Appreciation and Income Fund Semiannual Review 2015

    Performance Overview


  • Davis Funds Comments on American Express

    American Express (NYSE:AXP) is another representative holding in the Portfolio. This global financial services firm combines a strong, upscale charge card brand with ownership of the underlying payment network to create a unique business model. The company attracts some of the most desirable cardholders whose affluence leads to average spending about three times as great as ordinary bank cards. American Express reinforces this higher charge card spending with a market-leading cardholder rewards program, creating a virtuous circle of higher spending and higher rewards. The company earns much of its revenue from the transaction or interchange fees it charges merchants that accept its card. Because its payment network is wholly owned, American Express avoids sharing this important revenue source, generating significantly better economics than the payment networks of its competitors whose interchange fees are shared with banks. Recently, American Express announced it will not renew its exclusive arrangement as the only credit card accepted at U.S. Costco stores. While this move will slow the company’s earnings growth over the short term, we admire the strong capital allocation discipline of the American Express management team in walking away from an arrangement offering inadequate shareholder returns. We expect American Express will take steps to overcome this loss of business and once again deliver double-digit earnings growth for shareholders in the years ahead.

    From the Davis Financial Fund semi-annual review 2015.


  • Davis Funds Comments on Markel Corporation

    Markel Corporation (NYSE:MKL), a specialty provider of nonstandard property and casualty (P&C) and life insurance products, is another example of a holding in the Portfolio. Markel generally underwrites policies in certain less competitive niche markets where it has developed significant expertise over many years, including P&C coverage for museums and private libraries, child care centers and camps, historic homes, private schools, and horse farms and riding clubs, among other niche markets. The company has also been successful in reinvesting the “float” (cost-free funds generated from premiums held on behalf of policyholders) provided by its insurance operations not only in stocks but also through the purchase of entire companies. By operating unobtrusively and shrewdly in its underwriting niches while earning good investment returns, Markel has created significant wealth for long-term shareholders.

    From the Davis Financial Fund semi-annual review 2015.


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