With only a little over a month left in what has been a turbulent year, a handful of stocks in Chris Davis (Trades, Portfolio)’ equity portfolio are trading near their 52-week lows as the market continues to adjust to rising inflation and interest rate hikes, among other geopolitical conflicts.
Similarly, after posting a 28.7% total return for 2021, the S&P 500 Index has fallen around 17% so far this year.
Taking a patient, long-term approach, Davis’ Tucson, Arizona-based firm seeks to invest in durable, well-managed companies that can be purchased at value prices, preferably when they are out of favor.
One of the many sectors that have been out of favor in 2022 is real estate, having declined over 20% year to date.
It is no surprise, then, that as of Nov. 29, Davis’ stocks that have collapsed to near their lowest prices in a year were all real estate companies. They were Extra Space Storage Inc. (EXR, Financial), Essex Property Trust Inc. (ESS, Financial) and Boston Properties Inc. (BXP, Financial). Another stock is also currently listed, which is Duke Realty Corp. (DRE, Financial). However, it has been excluded from this overview since the company was acquired by Prologis Inc. (PLD, Financial) in early October.
The third-quarter 13F filing showed the guru’s equity portfolio consisted of 114 stocks as of the three months ended Sept. 30, which was valued at $14.06 billion. The holdings have posted mostly negative performances so far in 2022, with 14 of the top 20 positions declining.
Investors should be aware 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Extra Space Storage
Extra Space Storage’s (EXR, Financial) shares have tumbled more than 20% over the past year. The stock is currently 2.04% above its annual low of $149.78.
Davis holds 50,320 shares of the company, which represents 0.06% of the equity portfolio. GuruFocus estimates he has gained 38.18% on the long-held investment.
The Cottonwood Heights, Utah-based real estate investment trust, which invests in self-storage units, has a $20.50 billion market cap; its shares were trading around $153.04 on Tuesday with a price-earnings ratio of 22.21, a price-book ratio of 6.31 and a price-sales ratio of 11.75.
The GF Score of 90 out of 100 suggests the company has high outperformance potential on the back of strong ratings for profitability, growth and momentum as well as middling marks for GF Value and financial strength.
Of the gurus invested in Extra Space Storage, Ray Dalio (Trades, Portfolio)’s Bridgewater Associates has the largest holding with 0.14% of its outstanding shares. Ron Baron (Trades, Portfolio), Jim Simons (Trades, Portfolio)’ Renaissance Technologies, Joel Greenblatt (Trades, Portfolio), Mario Gabelli (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) also own the stock.
Essex Property Trust
Shares of Essex Property Trust (ESS, Financial) have declined approximately 37% over the last 12 months. The stock is currently 2.21% above its yearly low of $205.76.
The investor owns 51,291 shares of the company, reflecting 0.09% of its equity portfolio. GuruFocus data shows Davis has gained an estimated 68.83% on the investment so far.
The REIT headquartered in San Mateo, California, which invests in apartments primarily on the West Coast, has a market cap of $13.75 billion; its shares were trading around $213.19 on Tuesday with a price-earnings ratio of 38.46, a price-book ratio of 2.41 and a price-sales ratio of 8.85.
According to the GF Score of 83, the company has good outperformance potential. While it received high ranks for profitability, growth and GF Value, it got only middling marks for financial strength and momentum.
With 0.08% of outstanding shares, Davis is Essex’s largest guru shareholder. Other gurus invested in the stock include Jeremy Grantham (Trades, Portfolio), Simons’ firm, Ken Fisher (Trades, Portfolio), Jones, Greenblatt and Caxton Associates (Trades, Portfolio).
Boston Properties
Boston Properties’ (BXP, Financial) shares have sunk approximately 34% over the past year. The stock is currently 2.85% above its annual low of $68.80.
The guru has a 101,310-share position in the stock, accounting for 0.05% of its equity portfolio.
The Boston-based company, which invests in office buildings in major metropolitan areas like New York City, Boston, Los Angeles, San Francisco and Washington D.C., has an $11.15 billion market cap; its shares were trading around $70.78 on Tuesday with a price-earnings ratio of 12.26, a price-book ratio of 1.81 and a price-sales ratio of 3.66.
Based on the GF Score of 81, the company has good outperformance potential. The REIT raked in high ratings for profitability, growth and GF Value, but only middling marks for momentum and a low financial strength rank.
First Eagle Investment (Trades, Portfolio) is Boston Properties’ largest guru shareholder with a 1.89% stake. Simons’ firm, Grantham, Dalio’s firm, Greenblatt and Caxton Associates (Trades, Portfolio) also hold the stock.
