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Howard Marks' Top 5 New Buys
Posted by: Holly LaFon (IP Logged)
Date: November 11, 2013 04:42PM

[size=13px; ]Chairman of Oaktree Capital Howard Marks is near living legend status in the investing world. Today he disclosed his third-quarter trades, which included the buying of stock in nine new companies. His overall portfolio contains 77 holdings, and is 66.3% weighted in ETF, options and preferred stocks.[/size]

The top third quarter 2013 buys of Howard Marks’ Oaktree are: Masonite International Corp. (DOOR), Star Bulk Carriers Corp. (SBLK), Health Care REIT Inc. (HCNPRI), NetApp Inc. (NTAP) and EMC Corp. (EMC).

Masonite International Corp. (DOOR)

Marks’ largest new position, Masonite International Corp., comprises 4.5% of his portfolio. He bought 4,778,334 shares of Masonite in the third quarter when the price averaged $50 per share.



Founded in 1925, Masonite International provides doors to the new residential construction, residential repair and non-residential construction industries. The company bears a $1.38 billion market cap and has traded on the NYSE since 2009, with its shares up 147% since it began trading.

Founded in 1925, Masonite International provides doors to the new residential construction, residential repair and non-residential construction industries. The company bears a $1.38 billion market cap and has traded on the NYSE since 2009, with its shares up 147% since it began trading.

In the third quarter, Masonite reported a 1.9% net sales increase to $433.1 million from the previous year, and net income of $3.6 million, or $0.12 per diluted share, compared to a loss of $9.9 million, or $0.36 per diluted share, in the third quarter of 2012. The company ended the quarter with $113.12 million in cash and cash equivalents, down from $122.3 million at year-end 2012. Liabilities totaled $803.67 million, down from $808.13 million a year-end 2012.

Star Bulk Carriers Corp. (SBLK)

Marks purchased 3,865,888 shares of Star Bulk Carriers in the third quarter when the price averaged $7. The holding makes up 0.75% of his portfolio.



Star Bulk is a worldwide shipping and seaborne transportation company based in the Marshall Islands. Its shares declined almost 86% over the past five years.

Star Bulk experienced a per-share revenue decline rate of 27.9% annually over the past five years. It has a return on equity of 2.8% and gross margin of 48.4% as of the second quarter. It also generated $5.54 million in free cash flow in the second quarter, from $7.1 million the previous year.

Star Bulk’s 10-year revenue and earnings history:



The company has a P/B of 0.4 and P/S of 0.63.

United Technologies Corp. (UTXPRA)

Marks purchased 489,950 shares of United Technologies in the third quarter. The holding comprises 0.61% of his portfolio.

Health Care REIT Inc. (HCNPRI)

Marks purchased 462,874 million of Health Care REIT Inc. in the third quarter, giving it a 0.51% portfolio weight.

Health Care REIT Inc. is an investment company in health care and senior living real estate, founded over 41 years ago.

Health Care REIT reported revenue for fiscal year 2012 of $1.8 billion, up from $1.33 billion for 2011. Net income also increased to $297.26 million from $217.61 million for 2011. The company’s return on equity was 1.2% and gross margin was 56.4% for third quarter 2013.

Health Care REIT pays a dividend of $0.813, with a dividend yield of 5.75%.

The company’s 10-year revenue and earnings history:



NetApp Inc. (NTAP)

Marks purchased 370,000 shares of NetApp in the third quarter when the price averaged $42. The holding comprises 0.3% of his portfolio.



NetApp is a storage and data management solution company founded in 1992. Its stock gained more than 211% over the past five years to trade around $39.87 per share on Monday, near a one-year high.

Over the past five years NetApp exhibited per-share annual growth rates of 15.3% for revenue, 37% for EBITDA, 12% for free cash flow and 27.3% for book value. NetApp has a return on equity of 8% and gross margin of 60%. It generated free cash flow of $221 million, up from $167 million the previous year.

NetApp’s 10-year revenue and earnings growth:



NetApp trades with a P/E of 27.9, P/B of 3.4 and P/S of 2.28, near a one-year high.

EMC Corp. (EMC)

Marks purchased 400,000 shares of EMC Corp. in the third quarter when the price averaged $26. The holding comprises 0.2% of his portfolio.



EMC is an information technology as a service (ITaaS) company focused on cloud computing. Its shares gained 120% over the past five years to trade at $23.87 on Monday.

Over the past five years, EMC had per-share annual growth rates of 9.6% for revenue, 21.5% for EBITDA, 17.7% for free cash flow and 12.6% for book value. The company recorded return on equity of 10.4% and gross margin of 62.1% in the third quarter 2013. It also generated $5.02 billion in free cash flow in fiscal year 2012 compared to $4.27 billion in fiscal 2011.

EMC Corp. 10-year earnings and revenue history:



It trades with a P/E of 19.1, P/B of 2.2 and P/S of 2.32, near a three-year low.

See more Howard Marks stocks in his portfolio here. Also check out the Undervalued Stocks, Top Growth Companies and High Yield stocks of Howard Marks.

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Guru Discussed: Howard Marks: Current Portfolio, Stock Picks
Stocks Discussed: DOOR, SBLK, HCNPRI, NTAP, EMC,
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