The companies that Gayner invests in are typically characterized by profitability, good returns on capital, talented and honest management, reinvestment opportunities, capital discipline and fair prices.
His portfolio is valued at $2.4 billion, with 102 positions, a quarter-over-quarter turnover of 2%, and a 27.7% weighting in its most-represented sector, financial services.
New Buy: Liberty Media Corp. (LMCB)
Gayner purchased 12,000 shares of Liberty Media in the fourth quarter, for a 0.058% weighting in his portfolio.
Liberty Media Corp’s symbol LMCB is the new designation for Liberty Media Corp., the former Spinco, after the completion of the spinoff of Starz (STRZA) in January. The new stock symbols took effect beginning on Jan. 22, 2013.
Since Liberty Media shares began trading at $123.97, the price has declined to $111.13.
After the spinoff, Liberty primarily consists of its subsidiaries Atlanta National League Baseball Club Inc. and TruePosition Inc., equity affiliates Sirius XM Radio Inc. (XSR) and Live Nation Entertainment Inc., and minority investments in public companies, including Barnes & Noble (BKS), Time Warner (TWC), and Viacom (VIA).
New Buy: Bunge Ltd. (BG)
Gayner purchased 9,000 shares of Bunge Ltd. for $71 per share on average in the fourth quarter.
Bunge Ltd. aims to increase food security sustainably by helping farmers improve various aspects of their operations.
In the past five years, Bunge’s stock declined almost 33%. In the same span, its revenue increased at a rate of 2%, and book value increased at a rate of 7.6%. EBITDA also declined at a rate of 6.4%.
On Feb. 7, the company underwent a change in leadership, as Soren Shroder, current CEO of Bunge North America, replaced Alberto Weisser as CEO of the company, effective June 1, 2013. Shroder joined the company in 2000 and has served in a number of capacities and has devoted his entire career to the agribusiness and food sector.
Bunge has a P/E of 15, P/B of 1 and P/S of 0.2.
BG data by GuruFocus.com
New Buy: Arch Coal (ACI)
Gayner purchased 56,000 shares of coal producer Arch Coal for $7 per share on average in the fourth quarter. Over the past five years, almost 89% of the company’s market cap has depleted. It trades for $5.85 per share on Monday afternoon.
Revenue over the past five years has increased at a rate of 5.3%, EBITDA at 6% and book value at 13.4%.
In the past 12 months, it saw significant declines: revenue declined 0.6%, EBITDA declined 75.6%, free cash flow declined 139.5% and book value declined 27.2%.
Arch Coal has a P/E of 13.04, P/B of 0.39 and P/S of 0.28.
ACI data by GuruFocus.com
Resolute Forest Products Inc. (RFP)
Resolute Forest Products is a provider of wood products such as newprint, commercial printing papers and market pulp.
Gayner bought just 15,375 shares of Resolute Forest Products for $12 per share on average in the fourth quarter. Since the company began trading in 2010, its share price has declined 38% to trade for $13.40 on Monday afternoon.
Over the past five years, RFP’s revenue has declined at a rate of 18.2%. In the third quarter, its net income increased to $31 million, or $0.32 per diluted share, on sales of $1.2 billion, compared to a net loss of $44 million, or a loss of $0.46 per share, on sales of $1.2 billion in the third quarter of 2011.
Its net margin also expanded to 2.7% from negative 3.6% the previous year, and its gross margin reduced to 22.4% from 24.7% the previous year.
RFP has a P/E of 47.12, P/B of 0.39 and P/S of 0.29.
RFP data by GuruFocus.com
See Tom Gayner’s portfolio here. Also check out the Undervalued Stocks, Top Growth Companies and High Yield stocks of Tom Gayner.