Olstein Capital Management, the firm led by Robert Olstein (Trades, Portfolio), disclosed in a regulatory portfolio update filing that its top-five trades during the first quarter included a new holding in Korn Ferry (KFY, Financial), a boost to its position in International Flavors & Fragrances Inc. (IFF, Financial), a reduction to its holding in Generac Holdings Inc. (GNRC, Financial) and the closure of its positions in The Scotts Miracle Gro Co. (SMG, Financial) and Booking Holdings Inc. (BKNG, Financial).
The Purchase, New York-based firm seeks long-term capital appreciation by applying a defense-first investing approach. Olstein emphasizes key features like sustainable cash flows, no aggressive accounting practices, strong balance sheets and low valuations relative to private market value.
As of March, the firm’s $638-million equity portfolio contains 100 stocks, with four new positions and a quarterly turnover ratio of 9%. The top-four sectors in terms of weight are industrials, consumer cyclical, financial services and technology, with weights of 19.01%, 16.56%, 15.13% and 14.63%.
Investors should be aware that 13F reports do not provide a complete picture of a guru’s holdings. They include only a snapshot of long equity positions in U.S.-listed stocks and American depository receipts as of the quarter’s end. They do not include short positions, non-ADR international holdings or other types of securities. However, even this limited filing can provide valuable information.
Korn Ferry
The firm invested in 115,000 shares of Korn Ferry (KFY, Financial), giving the position a 0.93% equity portfolio weight.
Shares of Korn Ferry averaged $53.97 during the first quarter; the stock is modestly undervalued based on its price-to-GF-Value ratio of 0.80 as of Thursday.
The Los Angeles-based organizational consulting and management recruitment company has a GF Score of 95 out of 100 based on a growth rank of 10 out of 10, a profitability rank of 9 out of 10 and a rank of 7 out of 10 for momentum, GF Value and financial strength.
Korn Ferry’s positive investing signs include a 4.5-star business predictability rank and a gross profit margin that has increased by approximately 0.7% per year and is outperforming approximately 94% of global competitors.
International Flavors & Fragrances
The firm added 62,000 shares of International Flavors & Fragrances (IFF, Financial), expanding the position by 221.43% and its equity portfolio by 0.90%.
Shares of International Flavors & Fragrances averaged $99.40 during the first quarter; the stock is modestly undervalued based on its price-to-GF-Value ratio of 0.71 as of Thursday.
The New York specialty ingredients producer has a GF Score of 73 out of 100 based on a GF Value rank of 9 out of 10, a profitability rank of 7 out of 10, a growth rank of 2 out of 10 and a rank of 5 out of 10 for momentum and financial strength.
Although the company’s gross margin outperforms approximately 73% of global competitors, International Flavors & Fragrances’ net margin and return on equity underperform more than 89% of global chemical companies.
Generac Holdings
The firm sold 62,550 shares of Generac Holdings (GNRC, Financial), slicing 52.13% of the position and 0.99% of its equity portfolio. Shares averaged $115.68 during the first quarter.
GuruFocus’ GF Value Line labeled the Waukehsa, Wisconsin-based power generation equipment company a possible value trap based on its low price-to-GF-Value ratio of 0.32 as of Thursday and low momentum rank of 4 out of 10.
Despite having low momentum, Generac Holdings has a GF Score of 84 out of 100 based on a growth rank of 9 out of 10, a profitability rank of 8 out of 10, a financial strength rank of 6 out of 10 and a GF Value rank of 4 out of 10.
The Scotts Miracle Gro
The firm sold all 170,900 of its shares of The Scotts Miracle Gro (SMG, Financial), trimming 1.30% of its equity portfolio. Shares averaged $71.92 during the first quarter.
GuruFocus’ GF Value Line labeled the Marysville, Ohio-based gardening and landscape company a possible value trap based on its low price-to-GF-Value ratio of 0.49 as of Thursday and poor financial strength rank of 3 out of 10.
The company’s low financial strength rank is driven by several warning signs, which include a low Piotroski F-score of 3 out of 9, a weak Altman Z-score of 1.65, and an interest coverage ratio that is less than 2 and underperforms approximately 94% of global competitors.
Despite having low financial strength, The Scotts Miracle Gro has a GF Score of 80 out of 100 based on a momentum rank of 10 out of 10, a growth rank of 5 out of 10 and a rank of 8 out of 10 for GF Value and profitability.
Booking Holdings
The firm sold all 3,350 of its shares of Booking Holdings (BKNG, Financial), trimming 1.06% of its equity portfolio.
Shares of Booking Holdings averaged $2,433.33 during the first quarter; the stock is modestly undervalued based on its price-to-GF-Value ratio of 0.74 as of Thursday.
The Norwalk, Connecticut-based online travel and reservation giant has a GF Score of 84 out of 100 based on a rank of 9 out of 10 for momentum and GF Value, a profitability rank of 8 out of 10, a financial strength rank of 6 out of 10 and a growth rank of 5 out of 10.
