John Rogers

Last Update: 08-14-2015

Number of Stocks: 187
Number of New Stocks: 6

Total Value: $8,879 Mil
Q/Q Turnover: 8%

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

John Rogers Watch

  • Ariel Investments' John Rogers Comments on International Game Technology

    A few of our holdings struggled in the third quarter. Gaming equipment specialist International Game Technology (IGT) slipped –3.46% due to a disappointing earnings report. Although revenues exceeded expectations by a solid margin, EPS of $0.30 fell short of the consensus $0.34 figure. The environment was more competitive than expected, leading to fewer of IGT’s games on the floor, as well as a corresponding decline in overall play. Still, the company is allocating capital smartly. It announced a $200 million share repurchase plan, which would retire roughly 4% of the shares outstanding. We continue to think that although gaming has been softer than expected in the ongoing recovery, eventually it will pick up.


    From John Rogers (Trades, Portfolio)' Ariel Investments fourth quarter 2013 commentary.

      


  • John Rogers' Ariel Investments Q4 2013 Commentary

    Investing in small and mid-cap stocks is more risky and more volatile than investing in large cap stocks. Ariel Fund often invests a significant portion of its assets in companies within the financial services and consumer discretionary sectors and its performance may suffer if these sectors underperform the overall stock market. Performance data quoted represents past performance. Past performance does not guarantee future results. All performance assumes the reinvestment of dividends and capital gains and represents returns of the Investor Class shares. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For the period ended December 31, 2013, the average annual total returns of Ariel Fund (Investor Class) for the one-, five- and ten-year periods were +44.68%, +26.01% and +8.18%, respectively. Ariel Fund’s Investor Class shares had an annual expense ratio of 1.03% for the year ended September 30, 2013 and 1.06% for the year ended September 30, 2012. Performance data current to the most recent month-end for Ariel Fund may be obtained by visiting our web site, arielinvestments.com.


    Both domestic and international stocks had strong returns in 2013, including the final quarter of the year. Somewhat predictably, the investment areas that were the most popular over the last half decade— bonds and emerging market stocks—had their comeuppance with negative returns for the year. And although investors were generally skeptical of developed market equities, here and overseas, most broad indices were up between +20% and +35%— well above the low double-digit historical averages. As independent thinkers, we entered the year bullish, viewing the global recovery from the financial crisis as ongoing and believing the pessimism overdone. We had good returns this quarter as Ariel Fund gained +12.99%, beating the Russell 2500 Value Index’s +8.83% jump, as well as the +9.30% rise of the Russell 2000 Value Index.

      


  • Ariel Investments' John Rogers Comments on January

    The big investment buzz a year ago was the so-called "Great Rotation," an expected shift out of bonds and into equities. In response, we devoted our January 2013 commentary to mutual fund flows, and while we were unsure whether the phenomenon would become a trend, we were clear that we saw the possibility as "a return to familiar ground." That is, from 2008-2012, investors changed their traditional patterns of behavior, evidently in reaction to the sharp equity losses in the 2007-2009 bear market. Last year, we wrote:


    In order of magnitude, the three shifts we have seen lately have been a massive preference for bonds over stocks, a huge swing from actively managed equity portfolios to passive ones and a much greater fondness for funds with stellar short-term performance.

      


  • Guru Stocks at 52-Week Lows: CHL, T, CAJ, CVE, KYO

    According to GuruFocus list of 52-week lows, these Guru stocks have reached their 52-week lows.


    China Mobile Ltd. (NYSE:CHL) Reached the 52-Week Low of $48.23

      


  • Ariel Investments and Causeway Capital Analysts Discuss Microsoft Stock



  • Guru Stocks at 52-Week Lows: CHL, IBM, PTR, T, PM

    According to GuruFocus list of 52-week lows, these Guru stocks have reached their 52-week lows.


    China Mobile Ltd. (NYSE:CHL) Reached the 52-Week Low of $48.48

      


  • John Rogers' Ariel Investments Commentary on December

    Equities of almost all descriptions had a stellar 2013, defying the widespread skepticism that marked the beginning of the year.  Predictably, investors’ enthusiasm grew as stocks climbed.  Although we do not expect returns in 2014 to match those in 2013, we remain cautiously optimistic.   


    Last year, we began providing a five-year performance overview as the centerpiece of our December commentary.  The picture today is very different from that of a year ago, even though four of the calendar years in our snapshot remain the same.  Replacing the awful equity losses from 2008 with the fantastic stock gains from 2013 alters the landscape substantially, on paper and in investors’ minds.

      


  • John Rogers Comments on Silica Holdings Inc.

    Second is U.S. Silica Holdings Inc. (NYSE:SLCA), which provides silica—industrial grade sand—chiefly to energy companies; we own it in Ariel Fund as well as our small cap separate account. When many look quickly at the company, they see a straightforward supplier of a pure commodity product, which therefore has no barrier to entry from competition. We believe, on the other hand, that Silica has a substantial competitive advantage due to its top-notch distribution network and its low costs. Two thirds of its customers are oil and gas producers and another third are industrial companies. In both cases, Silica’s customers need continual supplies of industrial sand or else they must idle their operations, costing a significant amount of time and money. In addition, Silica has 75% of its volume under contract, with an average weighted contract life of two years. In our view, Silica’s customers are highly unlikely to simply switch providers based on price.  


  • John Rogers Comments on Bristow Group Inc.

    First comes Bristow Group Inc. (NYSE:BRS), which provides helicopter services to offshore energy rigs, and is a holding in our traditional mid-cap, small-to-mid cap, and small-cap portfolios. Although energy exploration and production can clearly fluctuate, Bristow offsets those shifts through long-term contracts lasting roughly three to five years. Furthermore, Bristow receives “monthly standing charges”—meaning it gets paid whether its helicopters fly or not—amounting to 70% of its operating income.

    From John Rogers' November 2013 commentary.  


  • John Rogers Comments on Contango Oil & Gas Co.

    The most straightforward such example is Contango Oil & Gas Co. (MCF), which we own in our traditional mid-cap, small-to-mid cap, and small-cap portfolios, as well as in our deep value small cap portfolios. When we first purchased it in 2011, it focused exclusively on shallow-water Gulf of Mexico exploration and production, had an amazingly low-cost operation, virtually no debt, and thus very high cash flow. It was also quite disciplined in drilling only high opportunity locations. Since then the company has unfortunately seen its CEO and Founder, Ken Peak, depart for health reasons and later die. Moreover, it undertook a transformational acquisition, purchasing Crimson Exploration, which had become financially distressed. Its opportunities have now multiplied. And while its leverage has increased somewhat, the company continues to boast relatively low costs, minimal debt, and disciplined exploration. Across our domestic equity portfolios, we own several other companies whose profiles fit this mold.

    From John Rogers' November 2013 commentary.  


  • John Rogers' Ariel Investments Monthly Commentary - November

    During the long 2002-2007 bull market, and especially in its final months, we received many questions and plenty of suggestions regarding our stance on energy stocks. As you know, energy stocks and commodities were red-hot during much of that cyclical, relatively low-quality stock surge, and we had little exposure to the area in our domestic stock portfolios. For a long time, we held a belief that energy companies were largely dependent on natural resource prices—which makes it difficult to build and defend the durable competitive advantage we seek. Besides, with the prices of those commodities and stocks so rich, there was not much value at hand. It is worth noting that as commodities became inflated, we spent an enormous amount of time studying the sector and its effect on our holdings.

    Fast forward to 2013 and we have a number of energy companies in our portfolios. This is true because we shifted our perspective as well as our expertise. Indeed, our view on the space evolved as we started to discover potential opportunities that we can describe in two categories. First, we now think some energy companies can overcome their direct exposure to energy commodities through differentiated business models. Second, we believe some energy-related enterprises’ cash flows are far less volatile than natural resource prices. After we began finding opportunities, we also hired Anthony Walker, a research analyst with deep expertise in the energy sector. Now, among our domestic portfolios, we own a dozen energy and energy-related companies.  


  • John Rogers Adds to Perceptron and CPI Aerostructures

    As reported by the GuruFocus Real Time Picks, John Rogers increased his holdings in two companies on Nov. 30. The guru made notable increases to his holdings in the technology-based CPI Aerostructures (CVU) and Perceptron (PRCP).

    John Rogers is the Founder, Chairman, CEO and CIO of Ariel Capital Management. Rogers manages Ariel’s small and mid-cap institutional portfolios as well as the Ariel Fund (ARGFX) and Ariel Appreciation Fund (CAAPX). The guru focuses his investment selections on small and medium-sized companies whose share prices are undervalued, and his fund seeks to purchase companies whose prospects include high barriers to entry, sustainable competitive advantages, and predictable fundamentals that allow for double-digit cash earnings growth.  


  • Ariel Capital's John Rogers Trims Sotheby’s, DeVry, Hospira, IPG, Others

    Chicago-based Ariel Capital Management is led by Guru John Rogers who has earned a number of monikers, including “master wealth builder,” "the turtle” and “The Patient Investor,” after his column by the same name. He is also listed in a new book, “The World’s 99 Greatest Investors: the Secret of Success,” by Magnus Angenfelt.

    The portfolio of John Rogers currently lists 173 stocks, 29 of them new, with a total value of $6.86 billion and a quarter-over-quarter turnover of 8%. The portfolio’s top sector weightings are consumer cyclical at 24.6%, financial services at 22.8% and industrials at 19.3%. John Rogers is averaging a 12-month return of 19.34%. In 2012, Ariel Fund returned 20.32% compared to the S&P’s 15.4%.  


  • Ariel Investment's Charles Bobrinskoy - Higher Interest Rates Will Be Challenging for Market

    Ariel Investment's Director of Research Charles Bobrinskoy discusses the Fed's eventual taper and the effect it will have on the market:

      


  • Aflac Announces Increased Share Repurchases and Boosts Dividends

    Aflac (AFL), one of the largest insurers and most familiar brands in American insurance, enhanced its financial reputation this week by increasing its dividend and announcing that it would be spending more on stock repurchases in the near future.

    Aflac, commonly known for its duck spokesperson and funny advertisements, is an American and Japanese insurance company based out of Columbus, Ga. Aflac’s primary function is that of a general business holding and management company which oversees the operations of its subsidiaries by providing management services and making capital available.  


  • John Rogers Comments on MTS Systems Corp.

    During the quarter, we initiated one position and exited two positions in Ariel Fund. We added MTS Systems Corp. (NASDAQ:MTSC), which specializes in physical testing equipment. It occupies a key, important niche for manufacturing firms that are doing more and more virtual testing. In our view, companies are unlikely to abandon real-world physical tests; that stance is a contrarian one in a world where many believe virtual testing will eventually completely take over. In addition to significant potential growth, it boasts good operating margins, a sturdy balance sheet, and remains a very trusted brand.

    From John Rogers' Ariel Fund and Ariel Appreciate Fund portfolio manager letter third quarter 2013.  


  • John Rogers Comments on Gannett Co.

    In contrast to our financial names, one of our best performers during the quarter was a name many challenged in the not-so-distant past. As many know, although our media names fall squarely within our circle of competence as evidenced by our deep expertise in the industry, they represented some of our poorest performing and most controversial holdings during the worst of the financial crisis. During that tough period, we re-examined every position with a fresh perspective that required us to consider each stock from a lens of having never owned it. In the case of Gannett Co., Inc. (GCI), despite its underperformance, we still saw tremendous value and, true to our contrarian leanings, doubled and tripled down on the holding as the price became more and more attractive—making the stock one of our largest positions. It is important to note, after taking some lumps, we eliminated other media names whose brands and franchises did not appear to be nearly as compelling over the long-term.

    On June 13th, Gannett agreed to acquire Belo Corporation (BLC) and its 20 television stations that reach more than 14 percent of U.S. television households in a $2.2 billion transaction. The New York Times dubbed it, "…the biggest local television station sale in more than a decade."2 The acquisition will nearly double Gannett's broadcast properties (from 23 to 43) and create the fourth-largest owner of major network affiliates reaching nearly one-third of all U.S. television households. Gannett will have 21 stations in the top 25 markets and will become the second largest owner of network-affiliated television stations. While normally skeptical and wary of acquisitions, we immediately saw the value of this transaction and future possibilities for Gannett Investors also applauded the deal as evidenced by the fact that Gannett's stock closed +34% higher on the day of the announcement while Belo shares increased +28%. The reason being, Belo will not only accelerate Gannett's transformation into a diversified media company with higher profitability and returns—it will also give Gannett more leverage when negotiating the valuable retransmission fees local television stations receive from cable and satellite operators in exchange for the right to carry those stations on their systems. Size matters when seeking higher retransmission fees with cable and satellite distributors and also when bargaining with the broadcast networks for their cut of that revenue. Retransmission revenues create a dual revenue stream for Gannett, similar to cable networks, while reducing cyclicality from what has historically been an advertising-only business model. And whereas advertising can be hard to forecast, contractual agreements make retransmission revenues predictable and sticky. Moreover, we anticipate a meaningful increase in these revenues once broadcast network compensation becomes more aligned with their ratings.  


  • John Rogers Comments on Janus

    Lastly, Janus (NYSE:JNS)—whose ongoing challenges have tested even our patience—represents the most contrarian name in our entire portfolio as measured by the large number of Wall Street analysts who have a sell rating on the stock. An undesirable trifecta of weak investment results, the negative impact from performance-based fees and net outflows largely isolated to three of its well-known mutual funds have created a perfect storm for this $162 billion asset manager. In our view, the bad news is more than priced in. By our calculation, performance fees have bottomed. Moreover, the company's balance sheet continues to strengthen and outflows should stabilize once returns improve.

    From John Rogers' Ariel Fund and Ariel Appreciate Fund portfolio manager letter third quarter 2013.  


  • John Rogers Comments on First American Financial

    Rising mortgage rates drove down First American Financial (NYSE:FAF)'s stock price as Wall Street investors feared an end to the refinancing boom. Over the near-term, we anticipate downward earnings revisions as refinancings come to a halt rather quickly and new home sales take time to ramp up. But looking further out, we know title insurance policies on new home purchases are twice as profitable as refinancings which will drive earnings at First American. Not to mention, with the stock trading at just 10x consensus earnings, our bullishness is only magnified by the stock's incredibly cheap valuation.

    From John Rogers' Ariel Fund and Ariel Appreciate Fund portfolio manager letter third quarter 2013.  


  • John Rogers Comments on Lazard Ltd.

    With Lazard (NYSE:LAZ), we are able to look beyond the negatively-impacted emerging markets stocks held by the firm's investment management business. We like the enduring economics of money management and treat this meaningful profit contributor as icing on the cake of the company's diversified investment banking operation.

    From John Rogers' Ariel Fund and Ariel Appreciate Fund portfolio manager letter third quarter 2013.  


  • John Rogers' Ariel Fund and Ariel Appreciate Fund Portfolio Manager Letter

    Dear Fellow Shareholder: For the second quarter ending June 30, 2013, Ariel Fund rose +1.69% versus +1.54% for the Russell 2500 Value Index and +2.47% for the Russell 2000 Value Index. Meanwhile, Ariel Appreciation Fund earned +4.35% during the three-month period versus a +1.65% return for the Russell Midcap Value Index and +2.21% gain for the Russell Midcap Index. As a means of comparison, the broad market, as measured by the S&P 500 Index earned +2.91% during the three-month period. For the first six months of this year, Ariel Fund returned +17.71% versus +15.10% for the Russell 2500 Value Index and +14.39% for the Russell 2000 Value Index. Meanwhile, Ariel Appreciation Fund earned +20.58% during the six-month period versus a +16.10% return for the Russell Midcap Value Index and +15.45% gain for the Russell Midcap Index. By comparison, the year-to-date return for the S&P 500 Index was +13.82%.

    The Fed Factor  


  • John Rogers' Ariel Funds Third Quarter 2013 Commentary

    Investing in small and mid-cap stocks is more risky and more volatile than investing in large cap stocks. Ariel Fund often invests a significant portion of its assets in companies within the financial services and consumer discretionary sectors and its performance may suffer if these sectors underperform the overall stock market. Performance data quoted represents past performance. Past performance does not guarantee future results. All performance assumes the reinvestment of dividends and capital gains and represents returns of the Investor Class shares. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For the period ended September 30, 2013, the average annual total returns of Ariel Fund (Investor Class) for the one-, five- and ten-year periods were +33.28%, +13.07% and +7.94%, respectively. Ariel Fund's Investor Class shares had an annual expense ratio of 1.06% for the year ended September 30, 2012. Performance data current to the most recent month-end for Ariel Fund may be obtained by visiting our web site, arielinvestments.com.

    The third quarter of 2013 goes in the books as yet another strong one. Specifically, the global MSCI ACWI Index showed gains of +8.02%, while in the U.S. the S&P 500 Index rose +5.24%. That brings the year-to-date totals to +14.92% and +19.79%, respectively—a very strong year by any measure. As noted in The Wall Street Journal, quarterly gains have been strong for some time but without being abnormal. For the S&P 500 Index, 14 of the past 18 quarters have had positive returns, and the same is true of the MSCI ACWI Index. Such trajectories are not unusual. For instance, during the 1990s bull market and the 2002-2007 surge, the U.S. market actually had an even higher ratio of rising quarters. Altogether this pattern tells us the flip-side of the "slow recovery" coin has been a nice, long string of solid quarterly stock market gains and an economy that seems neither weak nor overheated. We experienced solid gains this quarter as Ariel Fund rose +8.78%, beating the Russell 2500 Value Index's +6.43% jump, as well as the +7.59% rise of the Russell 2000 Value Index.  


  • John Rogers Comments on U.S. Silica Holdings Inc.

    During the quarter, we initiated a position in U.S. Silica Holdings Inc. (SLCA), a supplier of industrial-grade sand to the oil and gas markets. Silica (the technical name for this sand) is critical in the process of hydraulic fracturing, and in our view, mastering the logistics and transportation of this commodity constitutes a durable competitive advantage. We believe the market is underestimating the likely pace of growth in U.S. Silica's revenue and earnings over the next several years (as demand continues to meaningfully increase), as well as the attractive cash flow characteristics of the company's business.

    From John Rogers' Ariel Funds third quarter 2013 commentary.  


  • John Rogers Comments on Nordstrom Inc.

    Also, premier department store Nordstrom, Inc. (JWN) returned -5.74% due to slow sales and a scaled-back outlook. Its EPS of $0.93 actually exceeded the $0.88 consensus earnings expectation. Still, management noted the "softer than anticipated" sales trends and lowered its EPS guidance from the $3.65 to the $3.80 range to between $3.60 to $3.70. We strongly agree with management that the phenomenon is cyclical and short-term rather than a long-term issue. The company continues to stand out for its great brand, phenomenal customer service, energetic growth in its Nordstrom Rack stores, and so forth. Long-term we think most department stores are positioned to struggle, but Nordstrom is poised to thrive.

    From John Rogers' Ariel Fund third quarter 2013 commentary.  


  • John Rogers Comments on Jones Lang LaSalle

    A few of our holdings struggled in the third quarter. Real estate specialist Jones Lang LaSalle Inc. (JLL) fell -4.21% due to an earnings miss. Revenues came in near expectations, at $989 million—an increase of 7% year-over-year—versus the consensus of $995 million. Management suggested the bulk of the earnings miss came from higher-than-expected expenses. Adding to the Wall Street discontent was a lower forecast for the Americas in investment sales activity: growth of 10% to 15% rather than 15% to 20%. We see all these as minor, short-term issues and think the long-term picture is bright. People will always buy and sell corporate real estate, and the trend toward outsourcing real estate management is straightforward and rational. We plan to remain patient.

    From John Rogers' Ariel Funds third quarter 2013 commentary.  


  • John Rogers Ariel Fund Third Quarter Commentary

    Investing in small and mid-cap stocks is more risky and more volatile than investing in large cap stocks. Ariel Fund often invests a significant portion of its assets in companies within the financial services and consumer discretionary sectors and its performance may suffer if these sectors underperform the overall stock market. Performance data quoted represents past performance. Past performance does not guarantee future results. All performance assumes the reinvestment of dividends and capital gains and represents returns of the Investor Class shares. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For the period ended September 30, 2013, the average annual total returns of Ariel Fund (Investor Class) for the one-, five- and ten-year periods were +33.28%, +13.07% and +7.94%, respectively. Ariel Fund's Investor Class shares had an annual expense ratio of 1.06% for the year ended September 30, 2012. Performance data current to the most recent month-end for Ariel Fund may be obtained by visiting our web site, arielinvestments.com.Inc. 0.0%; Sotheby's 1.8%; Jones Lang LaSalle Inc. 3.5%; Nordstrom, Inc. 0.7% and U.S. Silica Holdings Inc. 1.6%. Portfolio holdings are subject to change. The performance of any single portfolio holding is no indication of the performance of other portfolio holdings of Ariel Fund.

    The Russell 2500™ Value Index measures the performance of the small to mid-cap value segment of the U.S. equity universe. It includes those Russell 2500 companies with lower price-to-book ratios and lower forecasted growth values. The Russell 2000® Value Index measures the performance of the smallcap value segment of the U.S. equity universe. It includes those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. Russell® is a trademark of Russell Investment Group, which is the source and owner of the Russell Indexes' trademarks, service marks and copyrights.  


  • John Rogers' Ariel Funds September Commentary

    Although it may be hard to believe, the crash of Fall 2008 was a half-decade ago. At the time, the market was signaling the U.S., and therefore the world, was on the precipice of financial disaster. With that in mind, we read through our writings from that time to see what message they have for us now. The first thing we noticed: as is often the case, the realities of the present shape our memories of the past. Specifically, because we did not go over the edge and did in fact achieve stability, most people today take that outcome as a foregone conclusion. So the commentariat has the luxury of pointing toward mistakes rather than appreciating the achievements of that period; we think a far more balanced view is wise. We also noticed that even amidst such turbulence and carnage, it was possible to look past the particulars and see the big picture. That lesson remains important today. September 2008 was a month of tremendous upheaval with many, many moving parts. Today, however, conventional wisdom boils it down to one event—the "mistake" that Lehman was allowed to go bankrupt. That summary strikes us as Monday-morning quarterbacking. In the quarterly commentary from September 30, 2008 we wrote:

    [quote]The market volatility, velocity of change, and scale of transformation we experienced in September 2008 were unprecedented. . . . . Still, we would argue the fundamental metamorphosis of the financial services industry was far more important and nerve-wracking. Of the 25 largest publicly-traded U.S. financial services companies this time last year, nine of them underwent radical transformations in September 2008. The government took control of Fannie Mae (FNM), Freddie Mac (FRE), and AIG (NYSE:AIG). Lehman Brothers was not so lucky, declaring bankruptcy. Merrill Lynch (MER), Washington Mutual, and Wachovia (NASDAQ:WB) all sold themselves at distressed prices. Finally, Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS) became bank holding companies in order to avoid ending up like Merrill or Lehman. The financial world has already changed radically and will take more time to stabilize.  


  • Buffett Highlights the GuruFocus Real Time Picks Update

    The following information is a highlight of the real-time guru activity we saw this week. To view more information on these gurus, check out their guru portfolios. “Real Time Picks” reports the stock purchases and sells that Gurus have made within the prior two weeks. If a Guru makes a purchase or sell of a company in which they own a greater-than 5% stake, SEC regulations require them to report their transaction within two days. We saw notable real time activity from Warren Buffett, Mason Hawkins and John Rogers.

    Warren Buffett
      


  • Two Gurus Reduce Two Challenged Companies

    Both CSP Inc. (CPSI) and ITT Educational Services Inc. (ESI) have struggled in the last year. Their revenues are way down as of the second quarter, year over year. Richard Blum’s Blum Capital Partners LP continues to trim sinking education companies where the company is 10% owner, and John Rogers of Ariel Capital Management cuts a long-held defense company that delivered high gains over five years.

    Here are company updates and reviews of the billionaires' trades:  


  • John Rogers Takes 10% Stake in Two Companies

    Earlier today GuruFocus Real Time Picks reported Guru John Rogers’ two increases made on Sept. 30. The guru made a rather large increase to his stake in Rosetta Stone (RST) and a smaller yet notable increase to his position in Astro-Med (ALOT).

    Rosetta Stone (RST)
      


  • GuruFocus 5-year lows: Anworth Mortgage Asset Corporation, Contango Oil & Gas Company, Dendreon Corp, Sequenom Inc.

    According to GuruFocus list of 5-year lows, these Guru stocks have reached their 5-year lows: Anworth Mortgage Asset Corporation, Contango Oil & Gas Company, Dendreon Corp, Sequenom Inc.

    Anworth Mortgage Asset Corporation (NYSE:ANH) Reached the 5-year Low of $4.86  


  • Fierce Competition – Credit Card Processors Held by Numerous Gurus

    In a world of pay-by-plastic, e-commerce and mobile shopping, competition for electronic payment processing is fierce. Here’s a look at two very different credit card processors that provide electronic commerce and payment solutions. Both Total Systems Services Inc. and First Data’s owner KKR & Co. LP are up over 12 months and have a market cap of around $5 billion, but Total Systems Services may pull ahead in the next few years by aggressively entering the pre-paid card market of general purpose reloadable cards and payment cards, a global market that is expected to double in a few years.

    Total Systems Services Inc. (NYSE:TSS)  


  • Kids Decide on Dolls or Devices - JAKK, Others 70% Off

    Move over Cabbage Patch Kids® and Hello Kitty®. Kids are changing.

    Children have a strong preference for electronic devices, according to Stephen Berman, CEO and president of toy maker and action figure licensee, Jakks Pacific Inc. (NASDAQ:JAKK). Berman believes that the play behaviors of children have changed so much that new play behavior is at least one contributing factor in his toy company’s declining revenue. Berman commented in a company press release, “We also believe the decline in sales reflects the continuing change in play patterns of children of all ages, who continue to rely more and more on smart devices for their fun and entertainment. As previously announced, this shift in play patterns has caused companies like Jakks to evolve to meet the changing demands of its consumers with technologically enhanced product offerings.”  


  • John Rogers Comments on August

    At Ariel, we use skill in the ongoing quest to overcome luck in order to drive outstanding performance. Obviously, this effort generally goes toward picking stocks that beat the highly efficient market. But, as you know, our CEO and founder John W. Rogers, Jr. first learned about using skill to overcome luck in basketball. This month we want to explain how we overcame a tremendous and persistent investment challenge—heightened volatility during and after the financial crisis—by starting with our favorite sport: basketball.

    In his first six NBA seasons, Larry Bird won two NBA championships (in 1981 and 1984) as well as two MVP trophies (in 1984 and 1985). In his sixth season, he scored 28.7 points per game and hit 52% of his shots. He was on top of the basketball world. But in the first 25 games of his seventh season, he became mired in a bad shooting slump; his scoring fell five points per game and his shooting percentage dropped to 45%. Opinions on how to fix the problem ranged from the superficial and obvious, such as getting closer to the basket, to the extreme, such as hiring a shooting coach. In an interview during the slump, Bird had another take: The only thing I can do is work harder, try to give that extra effort and get over the hump . . . I have to go out and shoot that extra hour. I got to go out and run the extra hour. I have to go out and work on my foot movement.  


  • Five-Year Lows: Brookfield Property Partners LP, Fusion-io Inc., Boise Cascade Co., Jakks Pacific Inc.

    According to GuruFocus list of 5-year lows, these Guru stocks have reached their five-year lows: Brookfield Property Partners LP, Fusion-io Inc., Boise Cascade Co., Jakks Pacific Inc.

    Brookfield Property Partners LP (NYSE:BPY) Reached the Five-Year Low of $19.25  


  • July Commentary from Ariel's John Rogers

    Over the last couple of years, U.S. merger and acquisition activity has been a conundrum. On the one hand, equity valuations ranged from dirt cheap to reasonable all while corporations have held record amounts of cash. And yet, mergers and acquisitions have been slow. We have touched on this disconnect from time to time, but recently began to delve into the issue more deliberately as a result of a new development. Specifically, the market's traditional skepticism toward acquisitions has morphed into optimism this year.

    When an acquisition is announced, history has shown the acquirer's stock tends to fall, while the target's stock tends to rise. Obviously this is not true of every example, but the general reaction has been so common for so long that it is taken for granted as normal. It also makes some sense in most environments. The market knows that deals do not often work out as anticipated. Moreover, even mergers that seem sound create risk for the acquirer. Thus, investors often sell when a company announces an acquisition in order to avoid integration risk. Recently, some very provocative counter-examples to this well-established behavior began appearing. The one most benefitting our portfolios occurred when Gannett Co., Inc. (NYSE:GCI) agreed to acquire Belo Corporation (NYSE:BLC) on June 13th of this year. Not only did Belo shares jump +28.3% that day, but Gannett leapt +34.0%. The deal's size and gains were outliers, but the event was a magnification of a trend rather than a reversal: throughout 2013, there were news stories about acquirers' shares rising rather than falling when deals were announced.  


  • Optimistic John Rogers of Ariel Investments Gives Top Stock Ideas

    John Rogers mentions Lazard (NYSE:LAZ), Janus Capital (NYSE:JNS) and KKR (NYSE:KKR).

      


  • John Rogers Comments on MTS Systems Corp.

    During the quarter, we initiated one position and exited two positions in Ariel Fund. We added MTS Systems Corp. (MTSC), which specializes in physical testing equipment. It occupies a key, important niche for manufacturing firms that are doing more and more virtual testing. In our view, companies are unlikely to abandon real-world physical tests; that stance is a contrarian one in a world where many believe virtual testing will eventually completely take over. In addition to significant potential growth, it boasts good operating margins, a sturdy balance sheet, and remains a very trusted brand.

    From John RogersAriel Fund Second Quarter 2013 Commentary.  


  • John Rogers Comments on Contango Oil & Gas Co.

    Natural gas producer Contango Oil & Gas Co. (MCF) slipped -15.81%, largely due to an acquisition. The company was also negatively affected by both the write down of a key reserve and a one-off maintenance on an important well. Clearly, however, the most important event was the acquisition of Crimson Exploration (CXPO). The market responded as if it were a surprise, but we did not think it one. That is, Contango had always operated with no debt, and eventually it would follow one of two paths: sell itself to a larger producer or use its balance sheet to acquire a distressed, leveraged competitor. In doing the latter, Contango emerges with more assets, more cash flows and yet has low leverage. We continue to admire the company and believe it to be quite cheap.  


  • John Rogers Comments on Hospira Inc.

    Injectible drug specialist Hospira, Inc. (HSP) shot up +16.69% on good and surprising news about a new compound. Specifically, its Inflectra drug—a biosimilar medicine to Remicade— was recommended for approval by a crucial European authority for multiple treatments. In Europe, it is likely to be approved to treat rheumatoid arthritis, inflammatory bowel disease and plaque psoriasis. Typically, a drug is only approved for one condition first and then may receive other indications over time. Given Remicade had sales of roughly $2 billion in Europe last year, this was huge news. In recent quarters, there has been such a tight focus on existing facilities and historical problems that few have looked to the future. Our point of view has been the issues will get fixed and the company will go on to create new and better compounds to continue to drive growth; it seems the market needed a reminder such a future was even possible.

    From John RogersAriel Fund Second Quarter 2013 Commentary.  


  • John Rogers Comments on Meredith Corp.

    Magazine publisher Meredith Corp. (MDP) soared +25.91% due to an earnings beat. Specifically, the company reported adjusted EPS of $0.72 versus consensus of $0.68. Revenues climbed 7% to $370 million, topping estimates of $355 million. A primary driver of results was advertising revenues—both national and local advertising increased substantially. In addition, the company brought down net debt from $340 million at the beginning of the year to $331 million as of the earnings announcement on April 25th. We believe the company has traversed a tricky landscape well over the last few years, sticking to its core competencies and smartly improving its already solid balance sheet.

    From John RogersAriel Appreciation Fund Second Quarter 2013 Commentary.  


  • John Rogers Comments on First American Financial Corp.

    Mortgage insurer First American Financial Corp. (FAF) slid -13.35% despite a good overall quarter. We believe the market was essentially confused. The company's official earnings per share were $0.33 versus the $0.42 consensus. The key reason for the miss, however, was a large reserve charge dating to the 2006-2007 period. Without the charge, earnings would have been roughly $0.44 per share. Revenues exceeded expectations by increasing +19%, and purchase orders were up +13%. Admittedly, those were trade-offs for refinancings, which were down -7%. Management was upbeat and optimistic about business, a perspective we think was fully justified. The stock now trades below 1x book, which we think is very cheap given its profitability, powerful market position and business trajectory.

    From John RogersAriel Appreciation Fund Second Quarter 2013 Commentary.  


  • John Rogers Comments on Towers Watson

    Consultant Towers Watson (TW) surged +18.21% as investors became increasingly aware of the potential for gains driven by the Affordable Care Act's implementation. Specifically, Towers Watson is largely known as a defined benefit plan pension consultant; it also, however, consults on related issues and has a health care consultancy. Moreover, in 2012 it purchased Extend Health, which was at the time the largest private Medicare exchange in the US. As businesses deal with the uncertainties stemming from this significant change, they naturally are seeking expertise—and Towers Watson is a go-to specialist in the field. Although we certainly do believe there is value in this part of the company's business, we have recognized it for some time, while the market seems to be treating it as new information.

    From John RogersAriel Appreciation Fund Second Quarter 2013 Commentary.  


  • John Rogers Comments on Interpublic Group of Cos. Inc.

    Advertising holding company Interpublic Group of Cos., Inc. (IPG) gained +12.27% after reporting a solid earnings quarter. The company's reported loss of -$0.13 per share was in line with analyst estimates, and contained significant good news below the headline. Specifically, organic revenue rose +2.3% globally and much better in Latin America and other key growth geographies. Crucially, the company retired its entire $200 million in 4.75% convertible senior notes, thereby bolstering the firm's capital structure. In addition, IPG repurchased 6.2 million shares of stock over the course of the quarter and increased the dividend by 25 percent. In other words, we were pleased with the way management made the key decisions under its control.

    From John RogersAriel Appreciation Fund Second Quarter 2013 Commentary.  


  • John Rogers' Ariel Appreciation Fund Second Quarter 2013 Commentary

    Investing in mid-cap stocks is more risky and more volatile than investing in large cap stocks. Ariel Appreciation Fund often invests a significant portion of its assets in companies within the financial services and consumer discretionary sectors and its performance may suffer if these sectors underperform the overall stock market. Performance data quoted represents past performance. Past performance does not guarantee future results. All performance assumes the reinvestment of dividends and capital gains and represents returns of the Investor Class shares. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For the period ended June 30, 2013, the average annual total returns of Ariel Appreciation Fund (Investor Class) for the one-, five and ten-year periods were +32.57%, +11.84% and +8.53%, respectively. The Fund's Investor Class shares had an annual expense ratio of 1.17% for the year ended September 30, 2012. Performance data current to the most recent month-end for Ariel Appreciation Fund may be obtained by visiting our web site, arielinvestments.com.

    Wow, that happened fast. Or so we think many investors would say. For a typical U.S. investor holding a portfolio diversified across domestic stocks, foreign stocks and bonds, the year started quite well. Through the first four months, there were down months here and there in an asset class or two, but most holdings showed gains— handsome ones in stocks. Cracks showed in May in foreign stocks and bonds, and then most everything fell in June. U.S. bonds lost more than -1% (for the second straight month), emerging market stocks lost more than -6% and domestic large-caps lost more than -1%. Those losses seem minor by comparison to gold, which as reported in The Wall Street Journal, "fell -23% in the second quarter, the biggest quarterly decline since trading of U.S. gold futures began in 1974." Conventional wisdom holds that it was Ben Bernanke's mid-June comments about quantitative easing that spurred the rout. To our minds, he simply signaled that quantitative easing would slow down at some point, which we would have thought an obvious truth. Many reacted, however, as if it was new and harsh news. We were pleased that the effects were less dramatic on our investment universes than they were on the recently popular areas such as bonds, emerging markets stocks and gold. So it is with pleasure that we note our positive returns during a difficult quarter. In the second quarter of 2013, Ariel Appreciation Fund returned +4.35%, outpacing the Russell Midcap Value Index and the Russell Midcap Index, which rose +1.65% and +2.21%, respectively.  


  • John Rogers Ariel Fund Second Quarterly Commentary

    Investing in small and mid-cap stocks is more risky and more volatile than investing in large cap stocks. Ariel Fund often invests a significant portion of its assets in companies within the financial services and consumer discretionary sectors and its performance may suffer if these sectors underperform the overall stock market. Performance data quoted represents past performance. Past performance does not guarantee future results. All performance assumes the reinvestment of dividends and capital gains and represents returns of the Investor Class shares. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For the period ended June 30, 2013, the average annual total returns of Ariel Fund (Investor Class) for the one-, five- and ten-year periods were +30.68%, +10.65% and +7.48%, respectively. Ariel Fund's Investor Class shares had an annual expense ratio of 1.06% for the year ended September 30, 2012. Performance data current to the most recent month-end for Ariel Fund may be obtained by visiting our web site, arielinvestments.com.

    Wow, that happened fast. Or so we think many investors would say. For a typical U.S. investor holding a portfolio diversified across domestic stocks, foreign stocks and bonds, the year started quite well. Through the first four months, there were down months here and there in an asset class or two, but most holdings showed gains— handsome ones in stocks. Cracks showed in May in foreign stocks and bonds, and then most everything fell in June. U.S. bonds lost more than -1% (for the second straight month), emerging market stocks lost more than -6% and domestic large-caps lost more than -1%. Those losses seem minor by comparison to gold, which as reported in The Wall Street Journal, "fell -23% in the second quarter, the biggest quarterly decline since trading of U.S. gold futures began in 1974." Conventional wisdom holds that it was Ben Bernanke's mid-June comments about quantitative easing that spurred the rout. To our minds, he simply signaled that quantitative easing would slow down at some point, which we would have thought an obvious truth. Many reacted, however, as if it was new and harsh news. We were pleased that the effects were less dramatic on our investment universes than they were on the recently popular areas such as bonds, emerging markets stocks and gold. So it is with pleasure that we note our positive returns during a difficult quarter. In the second quarter of 2013, Ariel Fund returned +1.69%, a gain between the Russell 2500 Value Index and the Russell 2000 Value Index, which rose +1.54% and +2.47%, respectively.  


  • Guru Weekly Real Time Update

    The following information is a highlight of the real-time guru activity we saw this week. To view more information on these gurus, check out their guru portfolios.

    Mario Gabelli  


  • John Rogers' Ariel Investments June Commentary

    The $85 billion question these days is: was the market sell-off in response to Ben Bernanke's recent public statements reasonable? We think there is no simple, straightforward answer to such a question but are happy to provide our views on the situation.  


  • John Rogers Makes 5 Real-Time Increases

    John Rogers made five real time increases on June 30. These increases came at the close of the second quarter.

    POZEN Inc. (POZN)
      


  • John Rogers (Ariel Investments) and John Calamos (Calamos Investments) 'Read the Tea Leaves'

    The Milken Institute has just released a roundtable conversation of investors from its 2013 conference. Participating in the roundtable are John Rogers and John Calamos Sr. (as well as others).

    The panel address the following and other questions:  


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