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Arnold Van Den Berg’s Latest Sells as of 9/30/2012
Posted by: Dianne Tordillo (IP Logged)
Date: October 9, 2012 05:33PM

As founder of Century Management, value investment Guru Arnold Van Den Berg has made updates to his portfolio picks for the end of the third quarter. Below are 19 companies – eight of which he made stock reductions and 11 of which he completely sold out his share holdings.

Paychex Inc.
(PAYX)

Paychex is a national provider of payroll, human resource and employee benefits outsourcing. Van Den Berg sold 210,440 of his shares, reducing his current holdings to 387,609. With a market price of $32.95, the company has a market cap of $12.18 billion. It has a P/E ratio of 22.1, a P/S ratio of 5.5 and a P/B ratio of 7.4. GuruFocus gives Paychex a Business Predictability rank of 2.5 stars, a Financial Strength rank of 6 out of 10 and a Profitability and Growth rank of 7 out of 10. Although GuruFocus lists Paychex with 1 Good Sign showing consistent revenue and earnings growth, it also has six Medium Warning signs that indicate financial stress, a dividend payout ratio that’s too high, a dividend yield that is close to a 3-year low, a stock price that is close to a three-year high, as well as a P/S ratio close to a three-year high.

Universal Forest Products Inc. (UFPI)

Universal Forest Products Inc. is a holding company that provides capital, management and administrative services for its subsidiaries, companies that manufacture and market such products as structural lumber, engineered wood components and specialty wood. Van Den Berg reduced his shares of Universal Forest by 38.94 percent, selling 178,602 stocks which brings his total amount of shares down to 280,034. With a market price of $41.55, the company has a market cap of $835.9 million. It has a P/E ratio of 36.2, a P/S ratio of .5, and a P/B ratio of 1.4. GuruFocus gives Universal Forest a Business Predictability rank of 1 star, a Financial Strength rank of 9 out of 10 and a Profitability and Growth of 4 out of 10. Universal Forest upholds four severe warning signs, indicating that its per share revenue and operating margin have declined for the last five years, a long-term declining gross margin and severe cash flow divergence. It has four Medium Warning Signs which indicate highs in dividend yield, market price, P/B ratio and P/S ratio. On a lighter note, it has three Good Signs in financial strength, the Altman Z-Score (5.4) and the Piotroski F-Score (7).

3M Company (MMM)

3M is a diversified technology company that produces products targeting the people’s needs in such industries as health care, highway safety, office products and adhesives. Van Der Berg reduced his shares to 50.6 percent, from 213,430 shares down to 105,435. With a market price of $94.03 per share, 3M has a market cap of $65 billion. Its P/E ratio is 15.5, its P/S ratio is 2.2 and its P/B ratio is 3.9. GuruFocus gives 3M an 8 out of 10 for both the Financial Strength rank and the Profitability and Growth rank. 3M is also has a Business Predictability rank of 3.5 stars. The company’s three Medium Warning signs indicates that its market price is close to a 10-year high, and the P/E and P/B ratios are close to 2-year highs. However, 3M shows up under four Good Signs, showing strength in financials, Altman Z-Score, per share Revenue and operating margins.

Comcast Corporation (CMCSK)

Comcast Corporation is company that develops and manages the operation of broadband cable networks, as well as providing electronic commerce and programming content. Van Der Berg reduced his share of Comcast down 37.57 percent, from 850,660 shares down to 531,070 shares. With a market price of $34.39 per stock, Comcast has a market cap of $94.88 billion. It has a P/E ratio of 20.3, a P/S ratio of 1.7 and a P/B ratio of 2. It is ranked 4 stars in Business Predictability, 5 out of 10 in Financial Strength and 9 out of 10 in Profitability and Growth. The company has three Severe Warning Signs showing bankruptcy risks, declining gross margin and cash flow divergence. Its two Medium Warning Signs indicate that its market price is close to a 10-year high and its P/E ratio is close to a 3-year high. Lastly, its four Good Signs reveal consistent growth in revenue, expanding operating margin, and lows for its P/B and P/S ratios.

Steelcase Inc. (SCS)

Steelcase designs and manufactures products for high-performance work environments including furniture systems, seating, storage, desks, casegoods, and technology products. Van Den Berg reported to reducing his shares by 46.55 percent, from more than 2.6 million shares down to 1.3 million. With a market price of $10.13 per share, Steelcase has a market cap of 1.32 billion. It has a P/E ratio of 14.9, a P/S ratio of .5 and a P/B ratio of 1.9. With only one star for Business Predictability, GuruFocus ranks Steelcase 6 out of 10 in Financial Strength and 4 out of 10 for Profitability and Growth. Two Severe Warning signs indicate a five-year decline in per share revenue, and a long-term decline in gross margin. The three Medium Warning signs indicate close highs in price, P/B ratio and P/S ratio. Lastly, Steelcase shows two Good Signs stating that its dividend yield is close to a two-year high and its P/E ratio is close to a one-year low.

Microsoft Corporation (MSFT)

Microsoft is a company that develops, manufactures, licenses, sells and supports software products. From 2,063,886 shares, Van Der Berg has reduced his share holding by 49.01 percent, down to 1,052,412 shares. Microsoft has a current market price of $28.28 per stock and a market cap of $250.28 billion. The company has a P/E ratio of 10.7, a P/S ratio of 3.4 and a P/B ratio of 3.8. It has five stars for Business Predictability and holds a 9 out of 10 rank for both Financial Strength and Profitability and Growth. It has two severe warning signs that indicate a declined operating margin and an asset growth faster than revenue growth. Despite three Medium Warning signs that say its market price is close to a three-year high, its three Good Signs say that it has strong financial strength, consistent revenue growth and a dividend yield close to a three-year high.

Toll Brothers Inc. (TOL)

Toll Brothers is a company that builds luxury homes and communities. Van Den Berg reduced his shareholdings by 86.42 percent, from more than 1.5 million shares, down to 205,351. Toll Brothers has one star under Business Predictability rank. It is traded at $44.50 market price, with a $5.85 billion market cap. Toll Brothers has a 4 out of 10 Financial Strength and a 6 out of 10 Profitability and Growth rank. Its three Severe Warning Signs indicate a poor financial strength, a declining per share revenue and cash flow divergence. At the same time, it has four Medium Warning Signs, indicating financial strength, highs in market price, P/B ratio and P/S ration, a grey Altman Z-Score indicating financial stress.

MDC Holdings Inc. (MDC)

MDC Holdings provides services in constructing, selling and financing of residential housing and the acquisition of land for use in homebuilding activities. Van Den Berg reduced his shareholdings of MDC by 89.98 percent, from almost 1.5 million shares down to 150,000 shares. MDC has a market price of $38.93 per share and a market cap of $1.95 billion. Under GuruFocus, it is ranked one star for Business Predictability rank, 3 out of 10 for Financial Strength and 5 out of 10 for Profitability Growth. It has a P/E ratio of 20.7, a P.B ratio of 2.2 and a P.S ratio of 2.3. MDC’s six Severe Warning Signs, reveals poor financial strength, possible financial manipulation, a declined gross margin and per share revenue, an extremely low interest coverage and a low Piotroski F-Score. Its five Medium Warning Signs also indicate a low dividend yield and three-year highs for its market price, P/B and P/S ratios.


Stocks, No More: Van Der Berg’s Sold Out Shares

As much as Van Den Berg reduced his stock holdings recently, he went beyond for the following few companies where he sold all of his shares completely.

Illinois Tool Works (ITW)

Illinois Tool Works is a company that manufactures industrial technology including highly-engineered fasteners and components, equipment and consumable systems, and specialty products and equipment for customers all over the world. It has a market price of $59.07, a market cap of 28.44 billion and three stars for its Business Predictability rank. With a 7 out of 10 for both its Financial Strength and Profitability and Growth rank, it also has a P/E ratio of 15.2, a P/S ratio of 1.6 and a P/B ratio of 2.9

The Kroger Co. (KR)

Kroger is a nationwide grocery retailer that manufactures and processes food for sale by its supermarkets. Its stock currently sells at $23.53 per share, and has a market cap of $12.54 billion. It has a Business Predictability rank of 4.5 stars, a Financial Strength of 7 out of 10 and a Profitability and Growth rank of 6 out of 10. Lastly, it has a P/E ratio of 11.2, a P/S ratio of .1 and a P/B ratio of 3.4.

Campbell Soup Company (CPB)

Campbell Soup is a global manufacturer and marketer of branded convenience food products such as soups, sauces and biscuits. It is being traded at a price of $35.10 per share, and has a market cap of $11.08 billion. It has a P/E ratio of 14.5, a P/S ratio of 1.4 and a P/B ratio of 12.4. It is currently On Watch for its Business Predictability Rank of 3.5 stars, and a ranking of 7 out of 10 for both its Financial Strength and Profitability and Growth.

Cintas Corporation (CTAS)

Cintas is a company that provides an array of products and services for such industries as gaming, hospitality, food service, automotive, healthcare and cruise. Some of its products include uniforms and apparel, first aid, cleanroom resources and flame resistant clothing. As a corporation, Cintas is trading at $42.51 per stock, with a market cap of $5.34 billion. It has a P/E ratio of 17.8, a P/S ratio of 1.3 and a P/B ratio of 2.5 It also has a Business Predictability rank of 2 stars, and a ranking of 6 out of 10 for both Financial Strength and Profitability and Growth.

The Coca-Cola Company (KO)

Coca-Cola is a worldwide producer of soft drinks and beverages, distributing in more than 200 countries and 1 billion servings a day. It is traded at $38.57 per share, and has a market cap of $173.71 billion. It has a P/E ratio of 19.6, a P/S ratio of 3.7 and a P/B ratio of 5.3. Coca-Cola has a Business Predictability rank of 3.5 stars, a Financial Strength rank of 7 out of 10 and a Profitability and Growth rank of 8 out of 10.

Seabright Holdings Inc. (SBX)

SeaBright is a nationwide provider of workers’ compensation insurance. It is traded at $11.11 per share, with a $248.4 million market cap. It has a P/E ratio of 65.1, a P/B ratio of 0.7 and a P/S ratio of 0.9. SeaBright has a Financial Strength rank of 5 out of 10, a Profitability and Growth of 4 out of 10, and currently is not rated for a Business Predictability ranking.

Fortune Brands Home & Security Inc. (FBHS)

Fortune Brands Home & Security is the parent company of many brands of products such as faucets, padlocks, fiberglass, vinyl windows and retail tool storage products. It currently sells at a market price of $26.90 per share, with a market cap of $4.51 billion. It has a P/E ratio of 39, a P/B ratio of 2 and a P/S ratio of 1.4. Fortune Brands has not yet been ranked for Financial Strength, Profitability and Growth, and Business Predictability.

Target Corporation (TGT)

Target operates large-format general merchandise and food discount stores in the United States. Selling at $62.90 per share, it has a market cap of $42.03 billion. It has a P/E ratio of 14.6, a P/S ratio of 0.6 and a P/B ratio of 2.7. With a Business Predictability rank of five stars, it has a Financial Strength rank of 6 out of 10 and a Profitability and Growth rank of 8 out of 10.

The Walt Disney Company (DIS)

Walt Disney is a worldwide entertainment company that produces products and services in such industries as studio entertainment, theme parks and resorts and consumer products. It is currently selling at $51.52 per share, with a market cap of $95.04 billion. It has a P/E ratio of 17.8, a P/S ratio of 2.3 and a P/B ratio of 2.2. With a Business Predictability rank of 3.5 stars, it also has a 7 out of 10 Financial Strength rank and an 8 out of 10 Profitability and Growth rank.

Valero Energy Corporation (VLO)

Valero Energy Corporation owns and operates refineries in the U.S. and Canada. Its shares are trading for $31.40 per stock, with a market cap of $17.59 billion. It has a Financial Strength rank of 8 out of 10, a Profitability and Growth rank of 4 out of 10 and a Business Predictability rank of one star. Lastly, it has a P/E ratio of 8.6, a P/S ratio of 0.1 an a P/B ratio of 1.1.

Wal-Mart Stores Inc. (WMT)

Wal-Mart is a large retailer that operates in 27 countries, and serves more than 200 million customers per week. It is selling at a market price of $74.15 per share, with a market cap of $252.56 billion. It maintains a P/E ratio of 16.1, a P/S ratio of 0.6 and a P/B ratio of 3.4. With a Business Predictability rank of five stars, it has a Financial Strength rank of 7 out of 10 and a Profitability and Growth rank of 8 out of 10.



Guru Discussed: Arnold Van Den Berg: Current Portfolio, Stock Picks
Stocks Discussed: PAYX, UFPI, MMM, CMCSK, SCS, MSFT, TOL, MDC, ITW, KR, CPB, CT,
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