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Weekly Guru Bargains Highlights: YRC Worldwide Inc., Qimonda AG, Lennar Corp., Centex Corp., Pulte Homes Inc.

November 20, 2007 | About:

Buying what Warren Buffett bought even months later can be rewarding, because you can pay lower prices than he did a lot of times. The recent market decline certainly provides bargain hunters a lot of opportunities. Is the market in fear?

In the spotlight of November: Housing stock fell in the weak housing sector. Homebuilders struggle to make a profit in a market short on demand. While small builders claim bankruptcy, large homebuilders like Centex Corp. and Pulte Homes Inc struggle to survive restructuring, and selling homes at bargain prices. Experts predict the housing market will be depressed for at least the short-term as the economy slow down. As credit crisis continue to unfold, even government charter mortgage lenders Fannie Mae and Freddie Mac have felt to the levels you have not seen in many years.

YRC Worldwide Inc. (YRCW): Down 45% Since John Keeley Bought In the Third Quarter

John Keeley bought 9,785 shares from the trucking company, YRC Worldwide Inc. Since Keeley's buys at an average price of $31.90 price have declined by -45%.

YRC Worldwide, Inc., through its subsidiaries, provides transportation services for the shipment of industrial, commercial, and retail goods in the U.S. and internationally. The trucking company is known under brands Yellow Transportation and Roadway. YRC Worldwide Inc. has a market cap of $988.79 million; its shares were traded at around $17.59 with P/E ratio of 7.02 and P/S ratio of 0.10.

YRC profit falls due to high gas prices and weak business in the domestic shipping sector. The company reported a third quarter net income of $40.7 million, or 70 cents a share, compared with $95.8 million, or $1.64 a share, from a year earlier.

Richard Snow bought YRC stock in the last quarter, from which he owns 39,300 shares; Arnold Van Den Berg owns 3,085,670 shares; and Ronald Muhlenkamp sold out his holdings.

Qimonda AG (QI): Down 42% Since Charles Brandes Bought In the Third Quarter

Charles Brandes increased his holdings in the semiconductors company, Qimonda AG (QI), to 7,028,630 shares at an average price of $13.70 per share. The share prices has declined 42% since.

Qimonda AG (QI) supplies semiconductor memory products such as DRAM primarily in the U.S., Europe, and the Asia Pacific region. It designs semiconductor memory technologies, as well as develops, manufactures, markets, and sells various semiconductor memory products on a chip, component and module level used in PCs, Cell Phones, digital TVs, etc. Qimonda AG has a market cap of $2.6 billion; its shares were traded at around $7.96 with P/S ratio of 0.51.

In the fourth quarter, QI took to a $376 million loss and gross profit margin dive down to 12%. The company reported earnings per share of $1.11 from a gain of 62 cents a share in the same period last year. Its revenue fell by 21.2% during in 2007. In the past year, QI stock is down by 40.49%. QI is a supplier of DRAM memory products to Infineon-its parent company, who currently owns 77.5% of QI shares. For the fourth quarter, Infineon also reported a net loss of $411.7 million due to its stake in QI.

As of the second quarter, Arnold Schneider owns 10,000 shares, Dodge & Cox owns 15,800,000 shares, and David Tepper owns 565,400 shares as of 09/30.

Lennar Corp. (LEN): Down 36% Since Charles Brandes Bought In the Third Quarter

Charles Brandes bought 777,171 shares of stock of homebuilder Lennar Corp. between $22.65 and $36.86 during the third quarter.

Lennar Corporation operates as a homebuilder primarily in the U.S. It constructs and sells single-family attached and detached homes, and to a lesser extent multi-level buildings to first-time, move-up, and active adult homebuyers. Lennar Corp. has a market cap of $2.86 billion; its shares were traded at around $19.24 with P/S ratio of 0.25. The dividend yield of Lennar Corp. stocks is 3.3%.

Lennar Corp. strives in the competitive and oversupplied housing market. S&P dropped the debt ratings of Lennar Corp to "junk" along with few other companies. While other homebuilders auction off and make bargain sales of their inventory, Lennar executive stated that the company plans to finish the 200 homes in California and hold the inventory until the housing market improves.

George Soros also added to his holdings in LEN by purchasing 10,029 shares, while David Dreman sold out his holdings in the second quarter. Other gurus who currently own LEN stock: HOTCHKIS & WILEY owns 20,758,760 shares; Bill Miller owns 2,300,000 shares; and Ruane Cunniff owns 470,595 shares.

The Vice President of LEN, Marshall H. Ames, bought 30,000 shares in mid-August at about $28.17.

Centex Corp. (CTX): Down 35% Since Charles Brandes Bought In the Third Quarter

Charles Brandes initiated holdings in the home construction company Centex Corp. in the third quarter. Brandes' purchase of 670,670 shares was between $26.53 and $43.56.

Centex Corporation is a home building company that engages in purchasing and developing land or lots, and constructing and selling detached and attached single-family homes and land or lots in the U.S. Centex Corp. has a market cap of $2.52 billion; its shares were traded at around $22 with P/S ratio of 0.25. The dividend yield of Centex Corp. stocks is 0.7%.

For the third quarter, Centex expected a $60 million mortgage-related loss. The company had a net sales order drop of 13%. Due to falling prices of homes and sales decline, Centex estimated a lower cash-flow estimate to $500 million from $750 million for the next year.

George Soros upped his portfolio in CTX by 7,476 shares in the second quarter. Arnold Schneider increased his ownership by 41.53% to 1,485,105 shares as of 06/30. HOTCHKIS & WILEY and Bill Miller currently hold LEN stock: 18,835,600 shares and 8,200,000 shares, respectively.

Pulte Homes Inc. (PHM): Down 30% Since Charles Brandes Bought In the Third Quarter

Charles Brandes initiated holdings in the homebuilder Pulte Homes Inc by buying 1,575,725 shares between $13.61 and $23.25. The share prices have declined 30% since.

Pulte Homes, Inc., through its subsidiaries, engages in the homebuilding and financial services businesses primarily in the United States. The company's Homebuilding business engages in the acquisition and development of land for residential purposes. Pulte Homes Inc. has a market cap of $3.06 billion; its shares were traded at around $12.84 with P/S ratio of 0.31. The dividend yield of Pulte Homes Inc. stocks is 1.2%.

In the third quarter, Pulte Homes lost $787.9 million, or $3.12 per share, comparing to a profit of $191.5 million, or 74 cents per share, in the previous year. PHM loss is due to 31% drop in both home sales and mortgage services. The decline in home sales and decrease in home prices will continue to deteriorate the housing market.

Two other gurus purchased stocks: George Soros bought 16,045 shares and Jean-Marie Eveillard bought 101,500 shares. David Dreman kept his shares unchanged with a holding of 105,620 shares. While HOTCHKIS & WILEY and Arnold Schneider made big increases to their portfolios (H&W 42.61%, Schneider 23.4%), Bill Nygren kept his position about the same.

One insider buy was made by Director David N. Mccammon, who bought 10,000 shares of PHM stock in late-October at $15.00.

 


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