John Keeley

John Keeley

Last Update: 2014-04-04

Number of Stocks: 407
Number of New Stocks: 40

Total Value: $5,880 Mil
Q/Q Turnover: 13%

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

John Keeley Watch

  • Pioneer Investments Keeps on Rolling

    How many times have we seen the same movie? The good or bad guy, chased by the law, going south. And when saying south, we mean Mexico. It seems to be the paradise for all U.S. citizens looking for some tranquility. What has never been seen though, is the escapee travelling on the Kansas City Southern (KSU). The train operator is commonly known as the NAFTA Railway, since it offers services across North America through a key partnership with Canadian National Railway (CN). In addition, the company owns former Grupo Transportación Ferroviaria Mexicana, today Kansas City Southern of Mexico. Hence, services today connect Canada and Mexico through the Midwest and Mississippi River basin, making the firm a true regional railroad operator. Most important, overall performance continues to catch the market’s attention, and there are clear evidences of gurus making long-term investments.


    Freighting Profits Along

      


  • Torchmark: More of the Same for Higher Profits?

    Torchmark Corporation (TMK)’s sustainable business model hit a bump in the road last year, when its health care subsidiary Liberty National Life reported a high agent turnover, causing a drop in sales. However, in an effort to improve agent retention, management reacted quickly, introducing new training, recruiting and sales processes, in addition to adding new managerial positions, so as to produce more qualified agents. Although it will take time until the situation is reversed, the company’s strategy has already shown results, increasing its agent count by 8% during fourth quarter fiscal 2013, and thereby boosting health sales by 2%. Furthermore, while life sales declined by 5%, a consequence of a 3% decline in agent count at the American Income Agency, the firm’s direct response channel was successful in offsetting these results, generating an 8% increase year over year in new sales.


    A Niche Target Group Can Go a Long Way

      


  • What´s Behind Iron Mountain's Earnings Growth

    Iron Mountain (IRM) stores records, primarily paper documents and data backup media, and provides information management services. The company’s information management services are divided into three main service categories: records management services, data protection and recovery services; and information destruction services. The company provides its services to commercial, legal, banking, health care, accounting, insurance, entertainment and government organizations.


    In this article, let's take a look at this company and try to explain to investors the reasons this is an apparently appealing investment.

      


  • A Stock Recommended by Analysts, Not Bought by Gurus

    Sometimes a series of conditions coincide to give prospect investors the opportunity to collect rewards. For example, finding a market leading firm with stock selling at a discount and high earnings per share does not occur daily. The situation is all the more particular when analysts at financial institutions give the stock a positive review and expansion plans continue to be announced by management. Today, all that points straight at Kinder Morgan Partners (KMP). The largest independent owner and operator of petroleum product pipelines in the U.S. has however, not seen much transactions by gurus since the third quarter of 2013. So, why have gurus not bought into this stock when analysts continue to recommend it?


    Analysts, Projects and Performance

      


  • A Bourbon King with an Interesting Future

    As the U.S. spirits category steadily gains share of the average American’s yearly alcohol consumption, the largest spirit manufacturers continue to grow. Although some brands in the market enjoy particular financial health, such as Diageo Plc (ADR) (DEO) ($80 billion market cap) and Brown-Forman Corporation (BF.B) ($19 billion market cap), in the article below I focus on a somewhat smaller, but not less profitable company. The talk is of Beam Inc. (BEAM), which is set to be acquired by the Japanese firm Suntory by the end of 2014’s second quarter.


    Now, since investment gurus John Keeley (Trades, Portfolio) and Ray Dalio (Trades, Portfolio) added large amounts of this company’s stock to their portfolios last quarter, I’m curious to decipher why.

      


  • Keeley Alternative Value Fund Fourth Quarter Commentary

    Fourth Quarter, 2013 Commentary In the fourth calendar quarter of 2013, the KEELEY Alternative Value Fund (KALVX) increased 5.72 percent compared to a 8.83 percent rise for th e Russell 2500 Value Index and a 10.51 percent incline for the S&P 500 Index. For the full year ending December 31, 2013, the Keeley Alternative Value Fund rose 21.47 percent co mpared to a 33.32 percent rise in the Russell 2500 Value Index, and a 32.39 percent rise in the S&P 500 Index. The fourth quarter capped off a remarkable year for equities in 2013. After strong results in 2012 and a number of concerning political and economic issues, the fo urth quarter completed an impressive climb in 2013 that seemed to surprise many investors. U.S. equities have more than doubled since the lows set in 2009 and the S&P 500 Index pr oduced its best return in 2013 in nearly fteen years. Small-cap stocks were even better, se tting record highs in 2013 as higher-beta stocks outperformed for much of the year. The long- side of the portfolio generated solid absolute and relative returns for the quarter and f or the year, outpacing the Russell 2500 Value Index over both time periods. However, Broadm ark was partially hedged for much of the year, and that proved to be a drag on performan ce for all of 2013 and was the key factor in the Fund trailing the Russell 2500 Value Index a nd the S&P 500 Index.


    The Fund was 40 percent hedged coming into the 4th quarter and became more defensive with the budget and debt ceiling fears, reaching a maximum of 60 percent hedged in early October. Following the agreements in Washington the hedge was reduced and ultimately removed mid-month. Broadmark's sentiment readings r eached overly optimistic levels, which is bearish in their work, and they brought the net exposure of the portfolio down, implementing a 25 percent hedge in early November. Investor sentiment continued to move into negative range causing them to become more defensive and raising the hedge to 50 percent for the remainder of November. They reduced the hedge as conditions began to stabilize into year end. The fund finished the year with a 20 percent hedge in the Russell 2000.

      


  • John Keeley Comments on NCR Corporation

    NCR Corporation (NCR) was the Fund's largest detrac tor during the fourth quarter, falling over 14 percent and detracting 25 basis points of return . The nancial technology company delivered a slightly weaker than expected quarter t hat surprised us as well as the Street. They reafrmed guidance which implies a strong fourth qu arter and suggested that cash ows will continue to be cautiously managed. Since we like th e business and valuation, as well as the improved balance sheet, we are inclined to stay the course.

      


  • John Keeley Comments on Bancorp South

    Bancorp South (BXS) was another position that made a positive contribution during the quarter and for the year. In 2013, the regional ban k climbed over 61 percent and added 91 basis points of return to the portfolio. The compan y produced a very solid quarterly earnings report and remains a core restructuring holding fea turing a new CEO, Dan Rollins, who comes from a successfully run bank in Texas, Prospe rity Bank. We believe there are consider- able operating costs that can be taken out of the b ank over a multi-year period so we remain very positive on the stock and believe it should pr oduce earnings upside over the next few years.

      


  • John Keeley Comments on Fiesta Restaurant Group

    Fiesta Restaurant Group (FRGI) was the Fund's best performing position in the fourth quarter and for all of 2013. Over the past year the stock g ained over 240 percent and added 212 basis points of return. The fast-food chain has con tinued to restructure after spinning off Burger King restaurants and is now successfully ach ieving organic growth. We continue to believe the stock is undervalued and expect further growth ahead.

      


  • Keeley All Cap Value Fund Fourth Quarter 2013 Commentary

    In the fourth calendar quarter of 2013, the KEELEY All Cap Value Fund (KACVX) increased 9.39 percent compared to a 9.95 percent increase fo r the Russell 3000 Value Index. For the full year ending December 31, 2013, the Fund rose 3 5.90 percent compared to a 32.69 percent rise in the Russell 3000 Value Index. The f ourth quarter capped off a remarkable year for equities in 2013. After strong results in 2012 and a number of concerning political and economic issues, the fourth quarter completed an im pressive climb in 2013 that took many investors by surprise. U.S. equities have more than doubled since the lows set in 2009 and the S&P 500 Index produced its best return in 2013 in nearly fteen years. Small-cap stocks were even better, setting record highs in 2013 as h igher-beta stocks outperformed for much of the year. During the fourth quarter the Fund sli ghtly trailed the Russell 3000 Value Index, but outpaced the index during 2013. Overall, the past y ear the portfolio beneted from both positive stock selection and good sector allocation . The Fund's overweight position in the strong performing consumer discretionary sector ben eted returns, but stock selection in the sector was the key driver in 2013. Additionally, st rong stock selection in the energy sector as well as an underweight position in the lagging util ities sector contributed to our results in 2013.


    Fiesta Restaurant Group (FRGI) was the Fund's best performing position in the fourth quarter and for all of 2013. Over the past year the stock g ained over 240 percent and added 212 basis points of return. The fast-food chain has con tinued to restructure after spinning off Burger King restaurants and is now successfully ach ieving organic growth. We continue to believe the stock is undervalued and expect further growth ahead.

      


  • John Keeley Comments on Chicago Bridge

    Looking farther out, Chicago Bridge (CBI) continues to see very good activity in helping the energy sector build out terminals to export product. They are a leader in building liquified natural gas terminals and will play a large role in helping get North American gas to a hungry world market. Although our current weight in energy is modest relative to our respective indexes in each portfolio, we believe this is an exciting time to be involved in the sector. We want to make sure our shareholders have exposure to some of the companies that can benefit most from this transformational shift, and our holdings in this sector have made a strong contribution to our results in 2013.

      


  • John Keeley's Keeley Funds Annual Letter to Shareholders 2013

    Dear Fellow Shareholder,


    Despite economic and political turmoil, equity markets performed well across the board in September of 2013 and over the trailing twelve months. The September gains reversed losses in August and also resulted in positive overall quarterly performance with a number of major indexes moving further into record territory. After disturbing the markets in May and June with comments that they may taper Quantitative Easing (QE), the Fed surprised investors with an announcement that it would not reduce its asset purchases in the near-term. The announcement removed fears that a continued rise in interest rates may stall the economic recovery, as seen by the market's negative reaction to the sharp rise in the 10-year Treasury rate in August of 2013. Investors were also comforted by improving fundamentals both domestically and abroad. The Eurozone may finally be emerging from its prolonged recession and a number of economic reports in the U.S. continue to show progress. Specifically, initial unemployment claims dropped to a multiyear low early in September and the housing market continued to improve, as evidenced by prices rising 12.4 percent year-over year, which along with the stock market's strength, has created a positive wealth effect for consumers. In response to this general economic improvement, consumer confidence increased at the end of September, and the index of leading economic indicators ticked up as well, suggesting that, absent the effects of politics, the recovery in the real economy was continuing. Our portfolios that focus on corporate restructuring (Keeley Small Cap Value, Keeley Small-Mid Cap Value, Keeley Mid Cap Value, Keeley All Cap Value, and Keeley Alternative Value) have all experienced a productive investment cycle with respect to their opportunity sets, and many of our holdings have posted impressive results in recent quarters. Although we acknowledge an improving economy has boosted the outlook for our more cyclical holdings, our research has guided us toward many areas that seemed undervalued with low expectations. At the core, we are a bottom- up research driven investment firm that generates ideas through our investment philosophy involving corporate restructuring (corporate spin-offs, companies emerging from bankruptcy, event-driven/special situations, savings & loan and insurance conversions). Corporate restructuring is designed to provide superior growth in a slow growth economy. It is often the case that when conducting our bottom-up security analysis on company-specific restructuring ideas, we are led to identify industry specific themes. For example, for much of 2012 and early in 2013, the Funds benefited from exposure to the recovery in housing. However, it was our focus on corporate spin-offs that led us to the housing recovery theme. We invested in Walter Investment Management Corp. (WAC), a mortgage servicer that was formed when it was spun out from Walter Energy and merged with GreenTree; Lender Processing Services (LPS), a mortgage and consumer loan processor that was spun out from Fidelity National Information Services and subsequently acquired by Fidelity National Financial; PHH Corp. (PHH), a mortgage and fleet management services company that was previously spun out of Cendant Corp.; Fortune Brands Home and Security (FBHS), a manufacturer of home and security products that was split off from Beam Inc.; and CoreLogic Inc. (CLGX), a provider of property, financial and consumer information services, which was spun off from First American.

      


  • John Keeley Alternative Value Fund - Third Quarter Commentary

    In the third calendar quarter of 2013, the KEELEY Alternative Value Fund (KALVX) increased 4.38 percent compared to a 6.43 percent rise for the Russell 2500 Value Index and a 5.24 percent increase for the S&P 500 Index. Equity markets enjoyed a strong third quarter, with a number of major indexes moving further into record territory. The Federal Reserve played a significant role by surprising investors with an announcement that they would not scale back asset purchases. After disturbing the markets in May and June with comments that they may "taper" Quantitative Easing (QE), their remarks in September were welcomed by the equity markets. The announcement removed fears that a continued rise in interest rates may stall the economic recovery, especially when markets became alarmed after a sharp rise in t he 10-year Treasury rate. Investors were also comforted by improving fundamentals both domestically and abroad. The Eurozone is finally beginning to emerge from their prolonged recession and a number of economic report s in the U.S. continued to show progress. During the third quarter, the Alternative Value Fund trailed both the Russell 2500 Value Index and the S&P 500 Index. The portfolio's long holdings however, enjoyed a strong third quarter driven primarily by strong stock selection in the energy sector. Additionally, an overweight position in the strong performing industrial sector and an underweight position in the lagging utility sector also made positive contributions during the quarter.

    On the hedged side of the portfolio, sub-advisor Broad-mark Asset Management begins their investment process with an assessment of the fundamental economic environment through Valuation, Monetary Policy, and Investor Sentiment. They then validate these qualitative factors with a more quantitative assessment through their Volume/Breadth Momentum Model. With respect to valuation, despite the strength in the equity markets year-to-date, valuations are slightly elevated, but not at extreme levels on a historical basis, and overall they consider them neutral. Monetary conditions are currently mixed as central bank policies continue to be accommodative while credit spreads began to widen. They also have identified poor behavior and lagging performance from interest rate sensitive sectors and financial stocks, which historically has preceded market tops. With t hat said, the hallmark of every big cyclical peak is tightening of monetary policy, which has not occurred yet and due to the recent charade in Washington is unlikely to occur in the near future. The August correction improved investor sentiment which had become overly optimistic. Due to the Federal Reserve's decision to not "taper", the market rallied strongly into mid-September, causing their sentiment models to again move into negative territory. These levels were not extreme enough to trigger any major shifts in the portfolio. Other factors with respect to sentiment include insider activity, which is moving in a bearish direction, and activity in the VIX, which has picked up notably due to the headlines generated in Washington. Although they are mindful of the concerns listed above, altogether they rate sentiment currently as neutral.  


  • Keeley Funds All Cap Value Funds Semi-Annual 2013 Commentary

    In the first quarter of 2013, the KEELEY All Cap Value Fund (KACVX) climbed 14.55 percent compared to a 12.26 percent increase for the Russell 3000 Value Index. Over the trailing six month period ending March 31, 2013, the Fund rose 18.74 percent compared to a 14.11 percent increase for the Russell 3000 Value Index.

    We have been pleased with the Fund’s performance over the past six months and believe we are carrying a great deal of positive momentum into the latter half of 2013. Strong stock selection was the primary driver of the Fund’s outperformance, although our sector allocation also had a positive impact. All ten sectors of the Russell 3000 Value Index generated positive returns during this period, with seven of ten producing double digit returns. Our stock selection was led by strong holdings in the industrials, energy, and consumer discretionary sectors.  


  • Keeley Funds Semi-Annual Letter to Shareholders

    Dear Fellow Shareholder,

    Despite a number of fearful macroeconomic headlines that caused many investors to position themselves conservatively, much of the past six months has proven to be a strong period for risk assets. Equities rose sharply in the face of uncertainty over a hard landing in China, the European sovereign debt crisis, and the “fiscal cliff” here in the United States. Despite double digit returns for most equity indices, it appears that many investors continue to question the recovery. Moreover, trends in overall mutual fund cash flows indicate these investors continue to watch the market climb the “wall of worry” and remain hesitant to commit their capital. We believe this trend continues to be an indirect catalyst for future growth as investors should eventually capitulate and move from low yielding cash and bonds to equities. Frankly, it is hard not to question the amount of money that has poured into fixed-income funds since 2007 (over $1 trillion) given the low interest rate environment we find ourselves in today. I plan on returning to this topic later in my comments, but I wanted to address it early since I think it may continue to be an important catalyst in support of equities along with a continued economic recovery.  


  • Investment Guru John Keeley Comments on Walter Investment Management

    Walter Investment Management (WAC) was the largest contributor to the portfolio's results in 2012. The mortgage servicer benefited from the challenges of the larger mortgage players that have been looking to reduce their exposure to mortgage related assets. Walter has successfully acquired these assets at a meaningful discount and the position added 151 basis points of performance in 2012 after rising over 109 percent for the year.

    From Keeley Funds' fourth quarter 2012 investor letter.  


  • Investment Guru John Keeley Comments on Epoch Holdings

    Another key factor in our outperformance during the quarter was a sharp increase in merger and acquisition activity. The portfolio didn't experience any takeovers until this quarter, when two names were acquired at a premium price. This provides us with optimism that momentum in M&A may continue in 2013. Epoch Holdings (EPHC) was a notable contributor in the fourth quarter, rising over 19 percent after being acquired by TD Bank in December.

    From Keeley Funds' fourth quarter 2012 investor letter.  


  • Investment Guru Comments on Chicago Bridge and Iron

    Although ADT was the top contributor from the industrial sector during the quarter, Chicago Bridge and Iron (CBI) was another strong performer in the sector. The global engineering and construction firm rose sharply in December after shareholders of Shaw Group approved Chicago Bridge and Iron's $3 billion acquisition which was proposed in July. The combined entities will become one of the largest energy construction and engineering contracting firms in the world.

    From Keeley Funds' fourth quarter 2012 investor letter.  


  • Investment Guru John Keeley Comments on ADT Corp

    During the fourth quarter, ADT Corporation (ADT) proved to be the top performing position in the fund. Shares of the producer of electronics security debuted strongly after being spun-off from Tyco last year. The company climbed over 29 percent and added 56 basis points during the quarter. Although we believe the company can do well regardless of the housing environment, the stock was clearly boosted by improvement and continued momentum in the housing market.

    From Keeley Funds' fourth quarter 2012 investor letter.  


  • KEELEY All Cap Value Fund Fourth Quarter 2012 Commentary

    In the fourth calendar quarter of 2012, the KEELEY All Cap Value Fund (KACVX) increased 3.66 percent compared to a 1.65 percent increase for the Russell 3000 Value Index. For the full year ending December 31, 2012, the Keeley All Cap Value Fund rose 20.67 percent compared to a 17.55 percent rise in the Russell 3000 Value Index. Despite a number of fearful macroeconomic headlines that caused many investors to position themselves conservatively, 2012 proved to be a strong year for risk assets. Equities rose sharply in the face of uncertainty over a hard landing in China, the European sovereign debt crisis, and the "fiscal cliff" here in the U.S. Despite double digit returns for most equity indices, it appears that many investors are questioning the recovery. Moreover, trends in mutual fund cash flows indicate they continue to watch the market climb the "wall of worry" and remain hesitant to commit their capital. We believe this continues to be an indirect catalyst for future growth as investors eventually capitulate and move from low yielding cash and bonds and into equities. The Fund posted strong results in both absolute and relative terms in the fourth quarter and for the year. During the fourth quarter both positive stock and sector allocation contributed to our outperformance. Strong results in the industrial sector, both from an allocation perspective and from good stock picking, were primary sources of our outperformance. Good stock selection and a substantial underweight to the poor performing energy sector boosted returns as well. For the year, strong stock selection accounted for the majority of our performance, but sector allocation also had a positive impact on our results. Strong stock selection in the technology sector was a key factor in our outperformance, as was an overweight position in consumer discretionary and an underweight position in the lagging utilities sector.

    During the fourth quarter, ADT Corporation (ADT) proved to be the top performing position in the fund. Shares of the producer of electronics security debuted strongly after being spun-off from Tyco last year. The company climbed over 29 percent and added 56 basis points during the quarter. Although we believe the company can do well regardless of the housing environment, the stock was clearly boosted by improvement and continued momentum in the housing market.  


Add Notes, Comments or Ask Questions

User Comments

No comment yet



Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Hide