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Arnold Van Den Berg Trims Staples, Sells Out of Dell and Others - Q4 Updates
Posted by: Dianne Tordillo (IP Logged)
Date: January 9, 2013 11:44AM
The fourth quarter portfolio updates of Century Management’s Arnold Van Den Berg are in. Van Den Berg’s portfolio successfully gained 16 percent in 2012. Totaling 17 transactions, the fourth quarter updates consist of 7 stake increases, 5 new buys, 2 stake reductions and 3 complete sells of his entire stake in companies.
Among his reductions, the 79.81 percent decrease in Van Den Berg’s position in office supply chain Staples Inc. (SPLS) made the second largest impact to his portfolio, leaving a 2.39 percent cavity in the total weighting.
Over the last five years, Van Den Berg’s stake reductions in the company far outnumbered his purchases of new shares. Staples’ unfortunate loss in market value in that time frame totaled 44.48 percent. In 2012 alone, its stock price lost almost 20 percent of its value.
Before the year ended, Staples president and COO, Michael Miles Jr., resigned from the company to join the Boston-based investment firm, Berkshire Partners. In his time in office, Miles has only reported to trading his company shares once, which was in 2009 when he sold 150,000 shares, banking $3.5 million in the transaction. (Market Overview)
On Monday, Staples announced of its plans to reduce its interest expense and increase its financial flexibility through a tender offer for its shareholders to purchase up to $750 million in aggregate principal amount of its outstanding 9.75 percent senior notes that are due 2014.
In its 10-Year Financials, Staples’ total liabilities amount to almost $6 billion, with a long term debt of $1.5 billion, according to the latest reported figures from October 2012.
Currently, Van Den Berg hangs on to 470,729 shares, compared to the 2.3 million shares he had in the previous quarter.
One of the company’s Good Signs suggest its dividend yield is close to a five-year high, at 3.9 percent. Staples is trading today at $11.82 per share, up 0.04 points Wednesday morning. Its Financial Strength on GuruFocus remains strong at 8 out of 10, and Profitability & Growth of 6 out of 10; Staples is ranked averagely in Business Predictability, at 3 stars.
Wiping out his entire holding in tech stock, Dell Inc. (DELL), left a 2.4 percent hole in Van Den Berg’s portfolio, just a smidge larger than the impact from his Staples reduction. Like his Staples stake, Van Den Berg has reported ongoing reductions in his Dell shareholding. His reductions consecutively date back since 2009 and the last time he purchased any Dell shares was in the fourth quarter of 2008.
Dell lost almost 30 percent in market value in 2012. Its revenue growth in the last 10 years has been inclining at a steady rate of 5.29 percent annually. Its EBITDA growth however, has been in decline for the past 12 months, according to 10-Year Financials.
At the end of December, Dell announced the completion of its acquisition of data protection solutions provider, Credant Technologies, sought to help strengthen Dell’s security features. With the acquisition, Dell anticipates to provide its clients and customers protection of their IT Assets, compliance with regulations and reduction in security costs.
This morning, Dell stock is up 1.16 percent, trading at $10.90. It has a dividend yield of 3.1 percent, and a payout ratio of 0.05. Dell upholds a 3.5 star ranking in Business Predictability, an 8 in Financial Strength and a 7 in Profitability & Growth.
Aside from Van Den Berg’s reduction in Staples, he also made a 62.29 percent reduction in his holding of glass and coatings company, Apogee Enterprises Inc. (APOG).
Besides Dell, Van Den Berg wiped out his stakes in VCA Antech Inc. (WOOF) and Planar Systems Inc. (PLNR).
With a quarter-over-quarter turnover rate of 9 percent, Van Den Berg maintains a portfolio of 64 stocks, valued at $908 million.
His top five holdings are:
1. Cisco Systems Inc. (CSCO) which is 5.01 percent of his portfolio.
2. Jacobs Engineering Group (JEC) which is 4.75 percent of his portfolio.
3. Corning Inc. (GLW) which is 4.53 percent of his portfolio.
4. Berkshire Hathaway Inc. (BRK.B) which is 4.25 percent of his portfolio.
5. Wells Fargo & Co. (WFC) which is 3.8 percent of his portfolio.
To view the rest of his fourth quarter updates, visit Van Den Berg’s stock picks. Also view his undervalued stocks, high-yield companies and top growth stocks.
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Guru Discussed: Arnold Van Den Berg: Current Portfolio, Stock Picks
Stocks Discussed: SPLS, DELL, APOG, WOOF, PLNR, CSCO, JEC, GLW, BRK.B, WFC,