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Arnold Van Den Berg Buys CSCO and Sells TDW, FTO, GE, MMC, HSC, DIS

Henry Tan

Henry Tan

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Century Management is an investment management firm headed by Arnold Van Den Berg located in Austin, Texas. Since its inception in 1974, Century Management has grown its asset base to more than $1 billion under management, with investments in approximately 62 equities. Century Management utilizes a value approach to investing, favoring a large margin of safety whenever they analyze the intrinsic value of each stock. More detailed information regarding Van Den Berg and his investment philosophies can be seen in this article: http://www.gurufocus.com/news/129066/arnold-van-den-berg-and-his-top-stocks--msft-wmt-ko-amat-cl

The general division of the composite portfolio can be seen in the following tables. The overall composition remained relatively consistent, with changes totaling to no more than 3.5% in each category. Small changes were made in the telecommunications and consumer services sector which were counter-balanced by consumer goods and industrials.



Overall Portfolio Composition


Q1 2011


Q4 2010


% Change


Technology


22.60%


20.40%


2.20%


Financials


9.00%


8.20%


0.80%


Utilities


1.30%


1.10%


0.20%


Telecommunications


0.00%


3.00%


-3.00%


Consumer Services


13.10%


16.50%


-3.40%


Healthcare


1.10%


0.90%


0.20%


Consumer Goods


15.00%


13.60%


1.40%


Industrials


29.70%


27.70%


2.00%


Oil & Gas


8.20%


8.60%


-0.40%


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New Portfolio Position

1. Cisco Systems Inc. (CSCO)

Cisco Systems is a global networking solutions firm that specializes in the design and manufacturing of networking products. Their clients range from the everyday consumer to large scale corporate clients. Cisco was the only new position initiated in Century Management’s portfolio in Q1 of 2011. Their shares trade at $17.03 with a market capitalization of $94.14 billion. Their dividend yield is 1.41%, with a P/E ratio of 12.90.

Century Management initiated a purchase of 618,025 shares, which is valued at $10.5 million. In terms of pricing, Van Den Berg paid an average price of $19.51 per share, a potential 14.5% capital loss. For their fiscal year ending in July, 2010, they reported earnings at $1.32 per share. In the last five years, on an annual basis, Cisco has grown its earnings by 7.8%, and revenues at 12% respectively.

GuruFocus rated Cisco with the business predictability rank of 2.5-star.

Stake Increase

1. Rudolph Technologies (RTEC)

Rudolph Technologies designs, manufactures, and supports control metrology and systems analysis. Rudolph Technologies was one of two positions to have been purchased by Century Management in Q1 of 2011. Their shares trade at $10.40, with a market capitalization of $327.01 million. Their P/E ratio is 12.14.

Van Den Berg purchased approximately 5,485 shares to raise the total net value of the position at $3.2 million. The average cost of the position is estimated at $7.97, a potential capital gain of 30.4%.

GuruFocus rated RTEC with the business predictability rank of 1-star.

2. Core-Mark Holding Company (CORE)

The Core-Mark Holding Company is a distributor and marketing support firm that operates in the convenience store sector of the retail industry. Their shares trade at $33.87, with a market capitalization of $382.12 million. Their earnings for the fiscal year ending in December, 2010, were $1.56.

Century Management purchased 412,294 shares in Q1 of 2011. The average cost of the position is $28.88, representing a 17.3% capital gain. In terms of annual growth, Core-Mark has grown its revenues by approximately 6% for the last 5 years.

Stake Decrease

1. Tidewater Inc. (TDW)

Tidewater operates a maritime fleet that services the offshore energy industry. Their shares trade at $57.60, with a market capitalization of $2.96 billion. Tidewater Inc. has a dividend yield of 1.74% and a P/E ratio of 19.72.

Van Den Berg liquidated 420,847 shares at $58.21, a value approximately 1% higher then the current trading price. The net position of Tidewater was reduced from $43.5 million to $17.16 million. For the last 10 years, on an annual basis, Tidewater has grown its earnings by 22.4% and revenue by 11%.

GuruFocus rated TDW with the business predictability rank of 1 star.

2. Frontier Oil Corporation (FTO)

Frontier Oil refines crude oil and sells petroleum products to their clients. Their shares trade at $29.71, with a market capitalization of $3.14 billion. Their dividend yield is currently at .81%, with a P/E ratio of 85.02. Their earnings for the most recent year were 35 cents per share.

Their position in Frontier Oil was reduced from $19.7 million to $8.7 million. Century Management sold 300,082 shares at $23.80, which is 20% lower then the current trading price.

GuruFocus rated Frontier Oil with the business predictability rank of 1-star.

3. General Electric (GE)

General Electric is a diversified company operating in the technology, media and financial services sector. Their products range from the tangible such as refrigerators to the intangible such as loans and servicing. General Electric trades at $20.04, with a market capitalization of $212.81 billion. Their dividend yield is 2.79%, with a P/E ratio of 17.38.

The composite position was reduced by $17.1 million to $13.98 million. In this transaction, 769,028 shares were sold at an average price of $19.99.

GuruFocus rated General Electric with the business predictability rank of 1-star.

4. Marsh & McLennan (MMC)

Marsh & McLennan is a consulting firm providing risk, strategy and human capital management. Their shares trade at $29.52 with a market capitalization of $16.17 billion. Their current dividend yield is 2.85% with a P/E ratio at 29.54. Their most recent earnings were reported at $1.00 per share. Revenues has grown by 22.2% annually for the last five years

Marsh & McLennan net position was reduced from $47 million to $32.5 million. 408,618 shares of Marsh & McLenna owned were liquidated at a price of $28.92, 2% lower then the current trading price.

GuruFocus rated Marsh & McLenna with the business predictability rank of 1-star.

5. Harsco Corporation (HSC)

Harsco Corporation is a firm that provides services and goods from their four operating segments: infrastructure, metal, rail, and industrial. Their shares trade at $34.36, with a market capitalization of $2.77 billion. Their dividend yield is 2.39%, with a P/E ratio of 257.05. Their EPS for the year was at $0.13 per share. Harsco has grown its revenue by 6.6% annually for the last five years.

Harsco’s overall position in the portfolio was reduced from $41 million to $32 million. 344,490 shares were sold at $27.05, which is 21.3% less then the current trading price.

GuruFocus rated HSC with the business predictability rank of 1 star.

Complete Position Closeout

1. Walt Disney Corporation (DIS)

The Walt Disney Corporation is a worldwide entertainment company most known for their theme parks, toys and movies. Their shares trade for $41.52 with a market capitalization of $78.85 billion. Their current dividend yield is 0.96%, with a P/E ratio of 18.36.

Century Management eliminated this $34 million position from their portfolio in the first quarter of 2011. It is estimated that Van Den Berg sold his position at $41.28 a share, a .24% decrease from the current trading price.

GuruFocus rated Disney with the business predictability rank of 3.5 stars.

2. Verizon Communications (VZ)

Verizon is a provider of communication services operating under two segments, domestic wireless and wired lines. These segments provide equipment, data packages, and calling packages to their clients. Their shares trade at $37.85, with a market capitalization of $105.98 billion. They offer a 5.15% dividend yield, and their P/E ratio is currently at 42.04.

Century Management held a position of $28 million in Verizon, and eliminated this position completely at an estimated price of $36.16. This is 4.67% less then the current trading price.

GuruFocus rated Verizon with the business predictability rank of 2.5 stars.

3. Walgreens (WAG)

Walgreens is the largest drugstore chain in the United States. Their shares trade for $41.87, with a market capitalization of $38.33 billion. Walgreen’s dividend yield is 1.67%, and their P/E ratio is 17.62.

Walgreen’s net position in Van Den Berg’s portfolio was $25 million, which was sold at an estimated price of $41.34. This is .53% less then the current trading price.

GuruFocus rated WAG with the business predictability rank of 4.5 stars.

4. AT&T (T)

AT&T provides telecommunications services that range from internet services to comprehensive phone plans for their clients. AT&T trades at $30.65, with a market capitalization of $181.19 billion. Their dividend yield is 5.61%, with a P/E ratio at 9.53.

AT&T’s net position in Century Management’s portfolio was valued at $28 million. Its sale price was at $28.42, which is 7.8% less then the current trading price.

GuruFocus rated AT&T with the business predictability rank of 1 star.

5. J.C. Penney Company Inc. (JCP)

J.C. Penny is a retailer of apparel, jewelry, and accessories that operates 1,108 stores in 49 states. Their shares trade at $37.26, with a market capitalization of $8.57 billion. Their dividend yield is 2.15%, with a P/E ratio of 23.52.

The value of the position held of J.C. Penny was $5.1 million. This position was liquidated at approximately $34.04, 9.5% lower then current market price.

GuruFocus rated J.C. Penny with the business predictability rank of 1-star.

6. LECG Corporation (XPRT)

LECG Corporation provides testimonial work, economic and financial analyses, and consulting services to their clients. Their shares trade for $0.10, with a market capitalization of $9.13 million.

The position held by Century Management in LECG was valued at approximately $540,000. This position was sold at an average price of $.93 cents, approximately 892% higher then the current trading price.

For more information pertaining to Arnold Van Den Berg and Century Management, please visit:

http://www.gurufocus.com/ListGuru.php?GuruName=Arnold+Van+Den+Berg

Rating: 4.0/5 (10 votes)

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