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Howard Marks' Second Quarter Portfolio Changes

August 05, 2013 | About:
Monica Wolfe

Monica Wolfe

119 followers
Since the formation of Oaktree in 1995, Guru Howard Marks has been responsible for ensuring the firm's adherence to its core investment philosophy, communicating closely with clients concerning products and strategies, and managing the firm. Oaktree’s mission is to provide highly professional management with a primary emphasis on risk control in a limited number of sophisticated investment specialties.

During the second quarter, Howard Marks of Oaktree Capital purchased 9 stocks bringing his fund’s portfolio to 80 stocks valued at about $5 billion. The following companies represent the stocks that Marks made the largest changes to.

Taiwan Semiconductor Manufacturing (TSM)

During the second quarter, Howard Marks made his largest increase in his holdings of Taiwan Semiconductor Manufacturing. The guru increased his position 198.25% by purchasing 69,528 shares. Marks purchased these shares at an average price of $18.42 per share. Since his most recent buy, the price per share has dropped approximately -9.1%.

The guru has held a position in the company since 2010Q3. He now holds on to 104,598 shares, representing 0.039% of his total portfolio.



Taiwan Semiconductor manufactures semiconductors using its advanced or mainstream manufacturing processes for its customers based on their own or third parties' proprietary integrated circuit designs.

Taiwan Semiconductor’s historical revenue and net income:

1375722984144.png

The company’s second quarter financials reported:

· A consolidated revenue of NT$155.89 billion, an increase of 21.6%.

· A net income of NT$51.81 billion, an increase of 23.8%.

· Diluted EPS of NT$2.00, an increase of 23.8%.

· Net profit margin of 33.2%.

In US dollars, second quarter revenue increased 15.9% from the previous quarter and increased 20.7% year-over-year.

The Peter Lynch Chart shows that the company is currently slightly overvalued:

1375723013683.png

Taiwan Semiconductor Manufacturing has a market cap of $89.16 billion. Its shares are currently trading at around $16.75 with a P/E ratio of 16.20, a P/S ratio of 5.20 and a P/B ratio of 3.40. The company has seen an annual average earnings growth of 8.2% over the past ten years.

GuruFocus rated Taiwan Semiconductors the
business predictability rank of 4.5-star.

There are currently eight gurus that maintain a position in TSM. Click here to see their holding histories.

Preformed Line Products Company (PLPC)

Marks upped his position in Preformed Line Products Company during the second quarter by 195.89%. The guru purchased a total of 69,634 shares at an average price of $72.70 per share. Since his buy, the price per share is up approximately 1.1%. The guru now holds on to a total of 105,181 shares of Preformed Line Products, representing 1.96% of the company’s shares outstanding and 0.14% of his total portfolio.



Preformed Line Products is a worldwide designer, manufacturer and supplier of high quality cable anchoring and control hardware and systems, fiber optic and copper splice closures, and high-speed cross-connect devices.

Preformed Line Products’ historical revenue and net income:

1375723971263.png

The Peter Lynch Chart shows that PLP currently appears to be slightly overvalued:

1375724070192.png

The analysis on the company reports that the revenue has been in decline over the past year, but the price is nearing a 10-year high. The company’s operating margin has also seen signs of expansion. Lastly the company has issued $2.1 million of debt over the past three years, but its debt level is considered to be acceptable.

Preformed Line Products has a market cap of $398.2 million. Its shares are currently being traded at around $73.52 with a P/E ratio of 15.10, a P/S ratio of 0.90 and a P/B ratio of 1.60. The company has seen an annual average earnings growth of 14.9% over the past ten years.

GuruFocus rated Preformed Line Products Company the
business predictability rank of 4.5-star.

Howard Marks, Joel Greenblatt and Chuck Royce maintain holdings in PLPC. Click here to see their holding histories.

MGIC Investment Corp. (MTG)

Howard Marks also made a notable increase in MGIC Investments by purchasing 7.5 million shares of their stock, increasing his position by 166.67%. The guru purchased these shares at an average price of $5.69 per share. Since his buy, the price per share has jumped 42.4%.

Marks has only held MGIC Investment since 2013Q1, but now holds on to 12 million shares of the company’s stock representing 5.93% of their shares outstanding and 1.5% of his total portfolio.



MGIC Investment Corp. is the holding company for MGIC, which is the nation’s largest private mortgage insurer as measured by $15.6 billion primary insurance in force covering 1 million mortgages as of June 30, 2013. The company serves lenders throughout the U.S., Puerto Rico and other locations.

MGIC’s historical revenue and net income:

1375725023554.png

The company’s second quarter financials reported:

· Net income of $12.4 million, compared to a net loss of $273.9 million for the second quarter 2012.

· Diluted EPS was $0.04 compared to a diluted loss per share of $1.36 per share a year ago.

· The net loss for the six months of 2013 was $60.6 million, compared with a net loss of $293.4 million for the same period a year ago.

· Total revenues were $263.9 million.

MGIC Investment Corp. has a market cap of $2.69 billion. Its shares are currently trading at around $8.04 with a P/S ratio of 1.30 and a P/B ratio of 2.10.

There are currently seven gurus that maintain a position in MTG. Click here to see their holding histories.

Safeway (SWY)

During the second quarter, Marks cut his position in Safeway in half. The guru sold 500,000 shares at an average price of $24.40 per share. Since his sell, the share price is up 5.3%. Marks still maintains 500,000 shares of Safeway, representing 0.21% of the company’s shares outstanding and 0.24% of his total portfolio. The guru has held a position in Safeway since first quarter 2011.



Safeway is one of the largest food and drug retailers in North America based on sales. The company operates 1,412 stores in the U.S. In June 2013, Safeway announced the sale of its Canadian operations for C$5.8 billion.

Safeway’s historical revenue and net income:

1375725694836.png

The company’s second quarter results highlighted:

· Income from continuing operations increased 22%.

· Adjusted diluted EPS of $0.51.

· Gain on the sale of investments of $8.5 million ($0.02 per diluted share)

· Adjusted net income was $125.1 million, up from $122.7 million from last year

· Sales declined 1.6% to $8.7 billion.

Marks cut his position as the company released that they would be selling their Canadian branch of the supermarket chain.

The Peter Lynch Chart shows that Safeway currently appears to be undervalued:

1375725734697.png

Safeway is currently trading near a 5-year high.

Safeway has a market cap of $6.1 billion. Its shares are currently trading at around $25.01 with a P/E ratio of 9.90, a P/S ratio of 0.10 and a P/B ratio of 2.00. The company had an annual average earnings growth of 5.3% over the past ten years.

GuruFocus rated Safeway the
business predictability rank of 2-star.

There are eleven gurus that maintain a stake in Safeway. Click here to see their holding histories.

Delphi Automotive PLC (DLPH)

During the second quarter, Marks decreased his position in Delphi Automotive by 25%. The guru sold a total of 1,000,000 of his shares at an average price of $46.86 per share. Since his sell, the share price has increased 19%. Despite his large sell, Marks still holds on to 3 million shares of Delphi, representing 0.95% of the company’s shares outstanding and 3.1% of his total portfolio.

Marks has maintained a position in Delphi since fourth quarter 2011.



Delphi Automotive is a global supplier of electronics and technologies for automotive, commercial vehicle and other market segments.

Delphi Automotive’s historical revenue and net income:

1375730526452.png

The company’s second quarter financials reported:

· GAAP diluted earnings of $1.17

· EBITDA of $645 million.

· Revenue of $4.2 billion, up 6%.

· Operating cash flow of $672 million.

· Executed $120 million of share repurchases, year-to-day $242 million.

Delphi is currently trading at a 2-year high.

Delphi Automotive has a market cap of $17.31 billion. Its shares are currently being traded at around $55.79 with a P/E ratio of 16.80, a P/S ratio of 1.10 and a P/B ratio of 7.20.

There are 20 gurus that hold a position in DLPH. Click here to see their holding histories.

You can check out
Howard Markssecond quarter portfolio here.

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Rating: 4.0/5 (4 votes)

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