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Ken Fisher's Top Three New Stock Buys

July 24, 2012 | About:
Holly LaFon

Holly LaFon

272 followers
Ken Fisher founded Fisher Investments, a $38 billion firm, in 1979. In the second quarter, while penning an article titled “Put Them on Mute” and saying “Don’t let the seemingly futile gyrations in Europe keep you out of the market this summer” in his Forbes column, Fisher went on a shopping spree, purchasing 79 new stocks. His biggest new buys are: Priceline.com (PCLN), Las Vegas Sands Corp. (LVS) and American Express (AXP).

Priceline.com is an online hotel reservations website that provides travel services to over 180 countries around the world. Fisher bought 598,135 of the shares, which cost an average of $689 each in the second quarter.

In the last five years, Priceline shares have run up 842%. Financial growth was likewise robust during that period. Its annual revenue growth rate was 22.1% EBITDA rate was 59.5%. The company has built a cash position of $3.6 billion, up from $1.8 billion just one year prior. It has no debt and $1 billion in long-term liabilities.

Aiding in the company’s recent growth is its international operations, which grew 58.5% in the first quarter, driven by strong hotel results at its sites Booking.com and Agoda.com, an Asian hotel-booking site, along with continued growth at Rentalcars.com.

Las Vegas Sands Corp. (LVS) is an owner and developer of resorts and has a 70.3% ownership of Sands China Ltd. (SCL). Fisher purchased 8,970,000 shares of the company in the second quarter at an average price of $51. Las Vegas Sands shares have declined 59% over the last five years but gained almost 18% year to date.

Las Vegas Sands is another quickly growing company. It has grown revenue at an annual rate of 17.4% and EBITDA at a rate of 14.7% over the last 10 years. The company has not produced free cash flow for almost all of the last decade except for 2011, when it generated $1.2 billion. Its cash holding is $5.6 billion and it has long-term debt and liabilities totaling approximately $10 billion.

In the second quarter, the company reported all-time industry record $1.07 billion adjusted property EBITDA, particularly related to growth at its Macao property portfolio and its Marina Bay Sands in Singapore, as well as strong performance at its domestic properties. It also produced record revenue, operating income and adjusted earnings per share.

American Express (AXP) is a global financial advisory services and international banking services company. Fisher cashed out an investment in American Express previously in the first quarter of 2009 at an average price of $15. In the second quarter, he bought 6,620,346 shares at an average price of $57.

American Express’ stock has declined almost 14% over the last five years, but had an 18% resurgence year to date. The company has produced modest revenue growth of 4.5% annually on average over the last 10 years. Its EBITDA over the same period declined at an average annual rate of 1.7%. It has produced solid free cash flow through the last decade.

In the second quarter, American Express reported net income of $1.3 billion, up 1 percent from the prior year, with per-share net income of $1.15, up 5% from the prior year. The company’s total revenues net of interest expense rose 5% to $8 billion, as cardmembers spending was up 7%.

See the rest of Ken Fisher’s latest buys and sells in his portfolio here.


Rating: 2.4/5 (13 votes)

Comments

sww
Sww - 2 years ago


PCLN last 10 years revenue growth rate is about 12%, at 660+, EPS=22 PE ratio at 33 today is not really a steal. How about own PCLN in beginning of 2009 while they are less than $100 and earning $11+ for PE=9.

LVS bought at 51 while EPS is about< 2.0 that is like PE = 25. Hardly a good deal.

"Fisher cashed out AXP in 2009 for $15 and then buy it at $57???" Okay, what about the buy low sell high thing? And why the hell you want to sell AXP if you have it at $15? Warren Buffett said: If you do not plan to own the stock for 10 years don't even think about owning it for 10 minutes. Either Warren Buffett is wrong or Fisher is on to something...hmmm

And this guy is a "guru"? I think he forgot to read his dad's book.

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