In his first quarter letter, Rogers discussed his investment outlook and described the securities he favors:
“Considering the strong run in stocks during the past few months, we would not be surprised to see a short-term correction. That said, the positives outweigh the negatives in our view… We rarely make dramatic changes to our investment strategies based on macroeconomic concerns. Rather, we prefer to focus on individual companies whose price/earnings multiples and dividend yields look attractive.”
Rogers’ portfolio contains 120 stocks, and has as its top positions JPMorgan Chase (NYSE:JPM), General Electric (NYSE:GE), Chevron Co. (NYSE:CVX), Wells Fargo (NYSE:WFC) and Exxon Mobil (NYSE:XOM).
In the first quarter, Rogers opened one new position, in Talisman Energy Inc. (TLM).
Talisman Energy Inc. (TLM)
Rogers purchased 3.5 million shares of Talisman Energy Inc. for $12 per share on average in the second quarter. The position is 0.16% of his portfolio.
Since a year ago, Talisman’s stock price has moved up less than 1%. The $11.76 billion market cap company is priced at $11.36 per share on Wednesday. Canada-based Talisman Energy is an upstream oil and gas company that is in the midst of transforming into focusing on two main categories: the Americas and Asia-Pacific.
In May, Talisman reported its first quarter results, including a net loss of $213 million, compared to net income of $376 million the previous quarter, due largely to significant gains the previous year from the sale of its 49% interest in its UK North Sea business, and a revaluation of its interest in a pipeline. It also had lower production and higher income taxes, operating costs and DD&A expenses. Partially offsetting the declines was production in a 60% interest in Kinabalu PSC in Malaysa which it purchased Dec. 26, 2012.
The company’s realized net price also declined 16% from the previous year due to falling oil and liquids prices, which was partially made up for by increasing natural gas prices.
As of Wednesday, Talisman has a P/S ratio of 1.87, near a one-year high. Its P/B is 1.3. The dividend yield of Talisman is 2.4%, higher than 85% of the companies in the global oil and gas exploration and production industry.
Talisman’s 10-year revenue and earnings history is below:
The Peter Lynch chart suggests that the stock is overvalued:
See Brian Rogers’ portfolio here. Also check out the Undervalued Stocks, Top Growth Companies and High Yield stocks of Brian Rogers.
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