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Buffett-Munger Sweet Spot in Small Cap Tech Stocks – Second Quarter Trades

August 11, 2013 | About:
Sally Jones

Sally Jones

49 followers
Competing in the world of large cap technology companies, it’s easy for a small cap to get overlooked, unless it has a billionaire’s interest. Here are four small cap technology stocks owned by billionaire investors realizing high average gains in most cases. Recognized on the GuruFocus Buffett-Munger Screener, these stocks show high predictability, 10-year EBIDTA growth rates, and in three out of four cases, yield. All four companies are up over the last 12 months or since the start of the year.

Synaptics Inc. (SYNA)

EBITDA: 23.1% 10-year Growth Rate

Rated with 4-star predictability, the computer systems company is up 36% over 12 months, with a market cap of $1.33 billion; its shares trade at around $40.96 with a P/E ratio of 21.70. The yield is 0%.

Historical pricing:

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Synaptics is a developer and supplier of custom-designed human interface solutions that enable people to interact via a variety of devices in mobile computing, communications and entertainment. The company currently focuses on “digital lifestyle” products, including PCs, notebook computers, ultrabooks, mobile smartphones, feature phones, tablets and other select electronic device markets.

Guru Action: As of June 30, 2013, Guru shareholder John Hussman sold 27,000 shares at an average price of $39.99, for a gain of 2.4%. He has averaged a gain of 48% on 3,285,000 shares bought at an average price of $27.59 per share. He has also averaged a gain of 23% on 2,662,000 shares sold at an average price of $33.36 per share. Other Gurus holding SYNA are Jim Simons for 516,900 shares, RS Investment Management for 33,500 shares and Steven Cohen for 27,477 shares, as of March 31, 2013.

Raven Industries Inc. (RAVN)

EBITDA: 13.8% 10-year Growth Rate

Rated with 5-star predictability, the contract manufacturing company is up 17% since January, with a market cap of $1.15 billion; its shares trade at around $31.56 with a P/E ratio of 24.10. The yield is 1.43%.

Historical pricing:

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Guru Action: As of June 30, 2013, Guru shareholder Chuck Royce sold 8,000 shares at an average price of $31.76, taking a loss of 0.6%. However, Royce has averaged a gain of 153% on 3,126,040 shares bought at an average price of $12.45. He has also averaged a gain of 85% on 1,615,168 shares sold at an average price of $17.06.

As of June 30, 2013, Guru shareholder Mario Gabelli bought 3,400 shares at an average price of $31.76, taking a loss of 0.6%. Gabelli has averaged a gain of 19% on 184,600 shares bought at an average price of $26.63. He has averaged a 0% gain on 101,100 shares sold at an average price of $31.68.

The other Guru holding RAVN as of March 31, 2013, is Joel Greenblatt with current shares at 19,198. Jim Simons sold out in that quarter.

Raven Industries is an industrial manufacturer that markets its products around the world. The company began as a manufacturer of high-altitude research balloons before diversifying into the industrial, agricultural, construction, military and aerospace markets.

MTS Systems Corporation (MTSC)

EBITDA: 8.2% 10-year Growth Rate

Rated with 4-star predictability, MTS Systems Corporation (MTSC) is a global supplier of test systems and industrial position sensors.

MTS Systems Corporation was founded in 1967. The company is up 21% over 12 months, with a market cap of $944.56 million; its shares trade at around $60.52 with a P/E ratio of 19.70. The yield is 1.98%.

Historical pricing:

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Guru Action: As of June 30, 2013, Guru shareholder Chuck Royce bought 271,368 shares at an average price of $57.75 for a gain of 4.8%. Royce has averaged a gain of 48% on 1,938,829 shares bought at an average price of $40.86 for a gain of 48%; he gained 123% on shares sold at an average price of $27.10. This is a long-term holding for Royce.



Computer Programs and Systems Inc. (CPSI)

EBITDA: 12.2% 10-year Growth Rate

Rated with 5-star predictability, the hospital software company is up 20% over 12 months, with a market cap of $627.8 million; its shares trade at around $56.66 with a P/E ratio of 20.30. The yield is 3.51%.

Historical pricing:

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Computer Programs and Systems is a healthcare information technology company that designs, develops, markets, installs, and supports computerized information technology that addresses the needs of small and midsize hospitals. The company's software applications are grouped according to functional categories of patient management, financial accounting, clinical, patient care and enterprise applications.

Guru Action: As of June 30, 2013, Guru shareholder Chuck Royce bought 800 shares at an average price of $51.48 for a gain of 10.1%. Royce has averaged a gain of 10% on 10.800 shares bought at an average price of $51.53. This is another long-term holding for Royce, dating back to the fourth quarter of 2003. Other Gurus holding CPSI are Jim Simons for 59,815 shares and Joel Greenblatt for 36,696 shares, as of March 31, 2013.

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About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

Rating: 4.0/5 (4 votes)

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