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Michael Price Keeps Buying HRS, CIT, TRH, JNS, FRNK, ITT, and Keeps Selling COT, CHRS, SYMSQ, BAC, FXCB
Posted by: William Ding (IP Logged)
Date: March 14, 2012 09:57AM
Michael F. Price was born in 1953 in New York. He graduated in 1973 from the University of Oklahoma with a Bachelor’s degree in Business Administration.
Michael Price is considered an expert in value investing. He started his career in finance as a research assistant at Heine Securities in 1975 and became the sole owner of the company by 1988. The value of the mutual funds grew to more than $17 billion before selling Heine Securities to Franklin Securities for $670 million in 1996. Price now manages his wealth through MFP Investors, whose current holdings include Destination Maternity Corp. and Cache Inc. He picks companies going through financial difficulties and invests in them by buying their stock at a substantial discount to true value, allowing them time to overcome their problems.
Michael Price recently spoke out about the value of some big financial firms. He believes that companies like Goldman Sachs and Citigroup are undervalued at current prices. In 1997, Price donated $18 million to the University of Oklahoma to form the Price College of Business.
Stocks That Michael Price Keeps Buying
No. 1: Harris Corp (HRS), Weightings: 2.2% - 370,000 Shares
Harris Corporation is an international company focused on communications equipment for voice, data and video applications. Harris Corp has a market cap of $4.99 billion; its shares were traded at around $43.62 with a P/E ratio of 9.4 and P/S ratio of 0.8. The dividend yield of Harris Corp stocks is 2.6%. Harris Corp had an annual average earnings growth of 32.9% over the past 10 years. GuruFocus rated Harris Corp the business predictability rank of 4.5-star.
Harris Corp. received a $51 million order from the government of Iraq to provide high-performance tactical communication solutions for a range of security missions. The company will provide Falcon III(R) RF-7800S wideband Secure Personal Radios, Falcon II(R) RF-5800M multiband handheld radios and RF-5800H high-frequency man pack radios, along with accessories and training services, which Iraq is acquiring for its security forces . The radios and software will provide the nation's armed forces with tactical line-of-sight and beyond-line-of-sight communications and situational awareness capabilities.
Michael Price owns 370,000 shares of HRS, valued as $13 million as of Dec. 31, 2011, which accounts for 2.2% of his equity portfolio. Michael Price added his positions in the Sep. 30, 2011 quarter by 26.77%, again in the Dec. 31, 2011 quarter by 5.71%. He bought this stock in late 2008 and reached 135,000 shares by mid-2009 and kept it constant until late 2010. Since then, Price has more than doubled his holdings.
No. 2: Cit Group (CIT), Weightings: 1.6% - 287,500 Shares
CIT Group Inc. is a bank holding company that provides financing and leasing capital for commercial companies throughout the world. Cit Group has a market cap of $8.05 billion; its shares were traded at around $39.6 with a P/E ratio of 61.7 and P/S ratio of 1.7.
CIT Group Inc. bought a $200 million aircraft-loan portfolio from an undisclosed European bank. The portfolio consists of seven aviation lending facilities to several U.S. airlines and is secured by "in-production" Boeing Co. and Airbus aircraft, CIT said.
On Feb. 7, 2012, CIT Group Inc. delivered to Deutsche Bank Trust Company Americas, as trustee, a notice of CIT's intention to redeem at par on March 9, 2012, all of its remaining 7% Series A Second-Priority Secured Notes maturing in 2016 and 2017. Prior to the redemption, there are $1,020,640,925 of Series A Notes maturing in 2016 and $2,932,227,176 of Series A Notes maturing in 2017 outstanding. The Series A Notes were issued on Dec. 10, 2009 in connection with CIT Group Inc.'s reorganization. Including this redemption, approximately $6.5 billion of Series A Notes will be redeemed during the first quarter of 2012. These redemptions in aggregate will result in the acceleration of fresh start accounting (FSA) discount, and therefore increase first quarter 2012 interest expense, by up to $600 million. The final amount of FSA to be accelerated will not be known until after the final redemption has occurred. Following this redemption, none of the Series A Notes will remain outstanding.
Options traders are focusing on puts. The April 2012 $37.00 put has traded 1,000 times on open interest of 1,094 contracts. The Mar2012 $40.00 put also traded 1,000 times on 1,106 contracts. Put volume is outpacing call volume by 4 to 1.
Michael Price owns 287,500 shares of CIT, valued as $10 million as of Dec. 31, 2011, which accounts for 1.6% of his equity portfolio. Michael Price added his positions in the Sept. 30, 2011, quarter by 45.83%, again in the Dec. 31, 2011, quarter by 9.52%. He first bought this stock in early 2010 and sold out his 52,000 shares position by mid-2010, then bought shares again in early 2011 and has increased his holdings since.
No. 3: Transatlantic Holdings (TRH), Weightings: 1.6% - 182,024 Shares
Transatlantic Holdings, through its wholly owned subsidiaries, Transatlantic Reinsurance Company, Trans Re Zurich, and Putnam, offers reinsurance capacity for a full range of property and casualty products on a treaty and facultative basis, directly and through brokers, to insurance and reinsurance companies, in both the domestic and international markets. Transatlantic Holdings has a market cap of $3.52 billion; its shares were traded at around $60.9 with and P/S ratio of 0.8. The dividend yield of Transatlantic Holdings stocks is 1.4%.
Transatlantic Holdings Inc. dropped from S&P 1000 Index on March 5 and closed at $60.90.
Michael Price owns 182,024 shares of TRH, valued as $10 million as of Dec. 31, 2011, which accounts for 1.6% of his equity portfolio. Michael Price added his positions in the Sep. 30, 2011 quarter by 22.78%, again in the Dec. 31, 2011 quarter by 69.17%. He bought this stock in mid-2009 and kept it constant until he doubled his position in the last quarter of 2011.
No. 4: Janus Cap Grp (JNS), Weightings: 1.5% - 1,445,100 Shares
Janus Capital Group Inc. is a asset manager offering individual investors and institutional clients complementary asset management disciplines through the firm's global distribution network. Janus Capital Group has a market cap of $1.67 billion; its shares were traded at around $8.85 with a P/E ratio of 11 and P/S ratio of 1.7. The dividend yield of Janus Capital Group stocks is 2.3%.
Janus Capital Group Inc. is up 44% year to date, and is offering to buy back up to $100 million worth of senior notes, putting it among a slew of companies aiming to take advantage of ultra-low interest rates.
The asset manager is making two separate offers in its refinancing effort, the first of which targets senior notes maturing in 2014 with $82.4 million of outstanding principal, and also offers to buy all of those notes at $1,050 for each $1,000 principal amount tendered.
Michael Price owns 1,445,100 shares of JNS, valued as $9 million as of Dec. 31, 2011, which accounts for 1.5% of his equity portfolio. Michael Price added his positions in the Sept. 30, 2011 quarter by 227.5%, again in the Dec. 31, 2011 quarter by 10.31%. He bought this stock in mid-2011 and more than tripled his position the very next quarter.
No. 5: Franklin Financial Corporation (FRNK), Weightings: 1.4% - 713,798 Shares
Franklin Financial Corporation is the holding company for Franklin Federal Savings Bank. Franklin Financial Corporation has a market cap of $189.8 million; its shares were traded at around $13.33 with and P/S ratio of 16.3.
The board of directors of Franklin Financial Services Corp. (PA) declared dividend of $0.27 per share for the first quarter of 2012. The first quarter 2012 cash dividend was the same as the regular quarterly cash dividend paid in the first quarter of 2011. The regular quarterly cash dividend is paid on Feb. 22, 2012 to shareholders of record at the close of business on February 3, 2012.
Franklin Financial Services Corp. (PA) announced that Charles M. Sioberg retired from the boards of directors of both Franklin Financial and its subsidiary, F&M Trust, effective Dec. 31, 2011. G. Warren Elliott was elected as vice chairman last year and replaces Sioberg as chairman of the board.
Michael Price owns 713,798 shares of FRNK, valued as $8 million as of Dec. 31, 2011, which accounts for 1.4% of his equity portfolio. Michael Price added his positions in the Sept. 30, 2011 quarter by 16.67%, again in the Dec. 31, 2011 quarter by 1.97%. He had 700,000 shares to 714,000 shares in late 2011.
No. 6: ITT Corp (ITT), Weightings: 1.3% - 407,550 Shares
ITT Corporation supplies advanced technology products and services in several growth markets. Itt Corp has a market cap of $2.22 billion; its shares were traded at around $22.88 with a P/E ratio of 3.4 and P/S ratio of 1.1. The dividend yield of ITT Corp stocks is 1.5%. ITT Corp had an annual average earnings growth of 8.4% over the past 10 years. GuruFocus rated ITT Corp the business predictability rank of 4-star.
For the current year, the company sees adjusted earnings of $1.62 to $1.72 a share on revenue growth of 5% to 7%, while analysts predicted a per-share profit of $1.71 and revenue growth of 6%. The stock has gained 54% since it completed its spin-off in October.
The company expects emerging markets growth will be approximately 10% driven by oil and gas in the Middle East and in South America, automotive gains in China and new global platforms and products. As a result, ITT expects solid adjusted segment operating margin growth of 40 basis points as productivity offsets additional costs related to the spin and drives incremental investments.
ITT Corp., Clifton, N.J., was awarded a $19,636,772 federal contract by the U.S. Naval Air Systems Command, Patuxent River, Md., for the design, development, integration, test and delivery of software and firmware improvements to the existing Jammer System.
Michael Price owns 407,550 shares of ITT, valued as $8 million as of Dec. 31, 2011, which accounts for 1.3% of his equity portfolio. Michael Price added his positions in the Sept. 30, 2011 quarter by 12.05%, again in the Dec. 31, 2011 quarter by 15.95%. He started to buy this stock from 2011 and increased his position gradually since.
Stocks That Michael Price Keeps Selling
No. 1: Cott Corp Que (COT), Weightings: 1.4% - 1,344,903 Shares
Cott Corporation is one of the world's largest non-alcoholic beverage companies and the world's largest retailer brand soft drink provider. Cott Corp Que has a market cap of $618.2 million; its shares were traded at around $6.48 with a P/E ratio of 11.4 and P/S ratio of 0.3. Cott Corp Que had an annual average earnings growth of 31.2% over the past five years.
Cott Corporation reported unaudited consolidated earnings results for the fourth quarter and full year ended December 31, 2011. For the quarter, revenue increased 4% to $549 million compared to $529 million reported a year ago. Operating income was $4 million compared to $15 million reported a year ago.
Michael Price owns 1,344,903 shares of COT, valued as $8 million as of Dec. 31, 2011, which accounts for 1.4% of his equity portfolio. Michael Price reduced his positions in the Sept. 30, 2011 quarter by 0.1%, again in the Dec. 31, 2011 quarter by 6.92%. He started with a relatively low 229,000 shares at the beginning of 2011. Then he drastically increased to 1.446,000 shares the next quarter but has been selling ever since.
No. 2: Charming Shoppe (CHRS), Weightings: 1.1% - 1,335,841 Shares
Charming Shoppes operates women's specialty apparel stores under the names Fashion Bug, Fashion Bug Plus, Catherine's, PS. Charming Shoppe has a market cap of $664.2 million; its shares were traded at around $5.86 with and P/S ratio of 0.3.
Charming Shoppes Inc. announced that it is rationalizing store base and, accordingly, remain on track to close approximately 240 unprofitable stores in 2011. 144 stores have closed year to date, including 80 stores at Fashion Bug brand, and the majority of the remaining 96 stores closings will occur by the end of the fourth quarter of 2011. The majority of these stores have natural lease expiration in 2011.
Michael Price owns 1,335,841 shares of CHRS, valued as $7 million as of Dec. 31, 2011, which accounts for 1.1% of his equity portfolio. Michael Price reduced his positions in the Sept. 30, 2011 quarter by 3.87%, again in the Dec. 31, 2011 quarter by 24.39%. He had a relatively low and constant position from 2008 to 2010, but afterwards, Price’s position grew massively in an instant and started slowly decreasing.
No. 3: Syms Corp (SYMSQ), Weightings: 0.5% - 278,994 Shares
Syms Corp. operates a chain of off-price retail stores located throughout the Northeastern and Middle Atlantic regions and in the Midwest,Southeast and Southwest. Syms Corp has a market cap of $158.9 million; its shares were traded at around $11 with and P/S ratio of 0.4.
On Nov. 2, 2011, Syms Corp. and its subsidiaries filed voluntary petitions for relief under Chapter 11 Bankruptcy in the United States Bankruptcy Court for the District of Delaware.
Michael Price owns 278,994 shares of SYMSQ, valued as $3 million as of Dec. 31, 2011, which accounts for 0.5% of his equity portfolio. Michael Price reduced his positions in the Sept. 30, 2011 quarter by 10000%, again in the Dec. 31, 2011 quarter by 11.85%. He had this stock since 2008 and has steadily increased his position over the years until he kept it at an constant 316,000 shares by late 2010.
No. 4: Bank of America Corp. (BAC), Weightings: 0.13% - 142,027 Shares
Bank of America Corp. is one of the world's financial services companies. Bank of America Corp. has a market cap of $85.65 billion; its shares were traded at around $8.05 with and P/S ratio of 0.7. The dividend yield of Bank of America Corp. stocks is 0.5%.
Countrywide Financial Corp., Bank of America Corporation, LandSafe Inc. and LandSafe Appraisal Services Inc. are being sued in a consumer fraud lawsuit by Kyle Lagow, a former employee who claims the companies purposely inflated property values for Federal Housing Authority-backed loans. Lagow claims that Countrywide paid fees that were above-market to appraisers who inflated home values. He also claims the company awarded appraisers who produced as many as 400 appraisals and appraisal reviews — an amount Lagow says would be impossible to accomplish under the constraints of the law. He further alleges that company blacklisted and retaliated against appraisers who refused to overvalue the value of homes.
Bank of America Corporation announced the launch of Merrill Edge(R) Select Portfolios(TM), a new investment offering that provides everyday investors with access to actively managed, diversified portfolios through a lower balance requirement.
On Feb. 16, 2012, Bank of America tendered $3.41 billion in subordinated notes. The company will probably reissue bonds at lower interest rates to capitalize on the low interest rate environment. This should enhance the fixed charge ratio, and improve the likelihood of the continuation of dividend distributions and interest payments for many years to come. Additionally, in fiscal year 2011, the loss before taxes fell to $230 million from $1,323 million, instilling more confidence in the notion that dividends and interest payments are secure for several more years. The debt to equity ratio has also fallen to 1.89, which is another metric that should give investors a bit more comfort. Additionally, the firm's share price has also been above $5 since Dec. 19, 2011, portraying the market's confidence that Bank of America has turned a corner. The bank can ultimately manage to work through the consequences of this settlement.
Michael Price owns 142,027 shares of BAC, valued as $1 million as of Dec. 31, 2011, which accounts for 0.13% of his equity portfolio. Michael Price reduced his positions in the Sept. 30, 2011 quarter by 53.11%, again in the Dec. 31, 2011 quarter by 64.03%. He started to buy this stock in late 2009 as the stock price was bouncing back from early 2009. His position peaked around 800,000 shares in 2010 and most of 2011, but has decided to sell starting late 2011.
No. 5: Fox Chase Bancorp (FXCB), Weightings: 0.034% - 16,800 Shares
Fox Chase Bancorp Inc. is the mid-tier stock holding company of Fox Chase Bank, a federally chartered savings bank. Fox Chase Bancorp has a market cap of $160.5 million; its shares were traded at around $12.94 with a P/E ratio of 34.2 and P/S ratio of 3.3. The dividend yield of Fox Chase Bancorp stocks is 1.3%.
Fox Chase Bancorp Inc., the holding company for Fox Chase Bank, announced that it was revising its year end reporting of nonperforming assets, impaired loans and delinquent loans as a result of the reversal of a transaction previously recorded in December 2011. The transaction, originally recorded as a sale of a pool of consumer finance loans (with differing maturity dates throughout the second, third and fourth quarters of 2011 and the first quarter of 2012), with a corresponding commercial financing by the Bank, did not meet final conditions to be recorded as a sale. There were no changes to the income statement or to stockholders' equity as a result of the reversal of the transaction.
Michael Price owns 16,800 shares of FXCB, valued as $0 million as of Dec. 31, 2011, which accounts for 0.034% of his equity portfolio. Michael Price reduced his positions in the Sept. 30, 2011 quarter by 18.73%, again in the Dec. 31, 2011 quarter by 87.1%. He started to buy this stock in mid-2010 and peaked with 160,000 shares in early 2011 but has been selling for the second half of the year.
Check out the complete list of the stocks that Michael Price keeps on buying
Also check out the Undervalued Stocks, Top Growth Companies, and High Yield stocks of Michael Price.
Stocks Discussed: HRS, CIT, TRH, JNS, FRNK, ITT, COT, CHRS, SYMSQ, BAC, FXCB,