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Century’s Arnold Van Den Berg Updates Q4 Portfolio, His Biggest Buys

January 09, 2013 | About:
Holly LaFon

Holly LaFon

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Austin-based value investor and founder of Century Management Arnold Van Den Berg has reported his fourth quarter portfolio, revealing that his trades included five new buys: Cohu Inc. (COHU), Dolby Laboratories Inc. (DLB), Nationstar Mortgage Holdings (NSM), Alcoa Inc. (AA), and Halliburton Company (HAL). Van Den Berg and his team manage a $908.3 million equity portfolio of 63 stocks. In the fourth quarter, the majority 33.5% was invested in the technology sector, followed by 11% in the financial services sector, and the rest was split among other industries.

Cohu (COHU)

Van Den Berg’s smallest new fourth-quarter buy was 74,652 shares of Cohu Inc. for $9 per share on average. The new holding occupies a mere 0.09% of his portfolio.



Cohu operates in the semiconductor, television camera and microwave communications segments. Its stock over the past year has declined 10% to $10.50 on Thursday, between a 52-week range of $7.96 and $14.16.

Cohu in the third quarter was hurt by a weak global economy which led to decreased orders and sales. The company’s net sales were $57.7 million, a decline from $71.8 million in the third quarter of 2011. Its net loss was $1.7 million, a decline from net income of $3.4 million.

Cash on Cohu’s balance totals $153 million, and long-term liabilities total $17.95 million, with no long-term debt. It paid a third quarter dividend of $0.06 per share and has paid uninterrupted cash dividends since 1977.

Cohu has no P/E due to its net loss; a P/B of 0.9, close to a three-year low; and P/S of 0.7, close to a one-year low.

Dolby Laboratories Inc. (DLB)

Van Den Berg bought 85,585 shares of Dolby Laboratories for $32 each on average. It is now a 0.28% weighting of his portfolio.



Dolby Laboratories creates technologies that enhance movies, and is best known for high-quality audio and surround sound. Its stock has declined almost 8% over the last year.

The company’s fourth quarter revenue was $224.8 million, compared to $243.8 million in the fourth quarter of 2011. GAAP net income was $51.5 million, compared to $79.1 million. Though a decline, fourth quarter revenue was higher than the company expected as smartphones and tablets increasingly adopt its technologies, and the Amazon (AMZN) Kindle included Dolby technology in its Kindle Fire HD products.

Dolby has $844.2 million in cash on its balance sheet, $83.7 million in long-term liabilities and no long-term debt.

Dolby has a P/E of 11.8, P/B of 1.8, close to a one-year low; and P/S of 3.7, close to a one-year low.

Nationstar Mortgage Holdings (NSM)

Van Den Berg bought 114,575 shares of Nationstar Mortgage Holdings for $31 per share on average. The holding has a 0.39% weighting in his portfolio.



Texas-based Nationstar Mortgage is a mortgage servicer and lender directly to consumers, that services approximately 1 million loans with an aggregate unpaid principal balance of $198 billion at Sept. 30, 2012. The company’s stock has gained 57% over the past year.

In the third quarter, Nationstar grew revenue 205% year over year to $277.2 million, from $90.9 million. Its net income reached a record $55.1 million, an increase from a loss of $3.1 million in the third quarter of 2011.

Nationstar has three stated goals: Executing on its servicing acquisition pipeline of $600 billion, organically grow servicing by recapture and expansion of its builder, wholesale and origination channels, and expanding its ancillary offering of end-to-end solutions for originations and default services.

On Jan. 7, Nationstar announced it would acquire $215 billion in residential mortgage servicing rights and other assets from Bank of America, for a purchase price of $1.3 billion.

Cash on Nationstar’s balance sheet totals $690 million, as well as $893 million in liabilities and no long-term debt. The company does not pay a dividend.

Nationstar has a P/E of 19.2 and P/B of 4.9.

Alcoa Inc. (AA)

Van Den Berg bought 1,492,980 shares of Alcoa for $9 per share on average, close to its three-year low of $8.01. It occupies a 1.43% weighting in his portfolio.



Alcoa is the largest aluminum producer, bauxite miner and alumina refiner in the world. Its stock price since the past year is essentially flat.

Alcoa met its targets in the fourth quarter for the fourth year in a row, in spite of metal price volatility, an uncertain global economy and low aluminum prices. Its revenue decreased 2% year over year to $5.9 billion, and net income of $242 million, compared to a net loss of $191 million in the fourth quarter of 2011.

Alcoa ended the quarter with $1.9 billion in cash and $9.09 billion in long-term liabilities and debt, its lowest level since 2006.

Alcoa has a P/B of 0.54, close to a three-year low; and a P/S ratio of 0.36, close to a three-year low.

Halliburton Company (HAL)

His largest new buy, Van Den Berg purchased 378,325 shares of Halliburton Company for $33 per share on average. It holds a 1.44% weighting in his portfolio.



Texas-based Halliburton was founded in 1919 and is one of the world’s largest providers of products and services to the energy industry, with operations in 80 countries. It serves the upstream oil and gas industry. Halliburton’s stock over the past year increased 4%.

In the third quarter, Halliburton saw better results in its international segment, with record revenue in both its Latin America and Middle East/Asia regions, than its domestic market. International revenue increased 2%, while North American revenue declined 5%, primarily due to higher prices in hydraulic fracturing and guar costs, and the effects of Hurricane Isaac. Overall third quarter revenue declined 2% sequentially, to $7.1 billion from $7.2 billion. Net income was $604 million, compared to $739 the previous quarter.

Halliburton ended the quarter with $7.9 billion in cash and $5.6 billion in long-term liabilities and debt. It paid a $0.09 dividend and has not raised the dividend since 2008.

The company has a P/E of 11.8, P/B of 2.3 and P/S of 1.3.

To see more of Arnold Van Den Berg’s updates, visit his portfolio here. Also check out the undervalued stocks, top growth companies and high yield stocks of Arnold Van Den Berg.


Rating: 3.7/5 (6 votes)

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