Bill Nygren is a portfolio manager of the well-known Oakmark Fund (OAKMX) and Oakmark Select Fund (OAKLX), recognized both for their value approach and returns. Just on Tuesday, Nygren quipped on CNBC’s Fast Money program, “What we do is probably about as opposite from ‘fast money’ as you can get, because we’re taking positions that we expect to hold for at least five years unless the market gives us an opportunity to sell a lot earlier than that.”
He also gave some insight into his investment approach. “At Oakmark what we try to do is find the names that the rest of the market isn’t excited about and because of that gives us an opportunity to buy at value prices,” he said.
In the second quarter, he introduced three new holdings into his portfolio: General Motors (NYSE:GM), National Oilwell Varco Inc. (NYSE:NOV) and Apache Corporation (NYSE:APA).
Apache Corporation (NYSE:APA)
Bill Nygren purchased 1.35 million shares of Apache Corporation in the second quarter when the price averaged $80. The position represents 1.2% of his portfolio. The price remains virtually flat.
Apache is an independent oil and gas exploration and production company, with operations in Argentina, Australia, Canada, Egypt, UK North Sea and the U.S.
For the second quarter, Apache on Aug. 1 announced $1 billion in earnings, or $2.54 per diluted common share, but said the result excluded $801 million, or $2.01 per share for certain items. A year earlier, Apache reported earnings of $337 million, or $0.86 per diluted share. Its quarterly revenue was $4.38 billion, up from $3.97 billion a year earlier, but is down slightly for the first half of the year.
Apache revenue and earnings history:
The Peter Lynch chart suggests the stock is undervalued:
Apache has a market cap of $30.13 billion with a P/E ratio of 12.10 and P/S ratio of 1.80. Its P/B ratio at 0.98 is close to a 10-year low. The dividend yield of Apache stocks is 1.00%. Apache had an annual average earnings growth of 6.4% over the past 10 years.
National Oilwell Varco Inc. (NYSE:NOV)
Nygren purchased 2.3 million shares of National Oilwell Varco in the second quarter when the price averaged $68. The weighting is 1.7%, and the stock has increased 3% since.
National Oilwell Varco, a Delaware corporation incorporated in 1995, is a provider of equipment and components used in oil and gas drilling and production operations, oilfield services, and supply chain integration services to the upstream oil and gas industry.
For the second quarter ended June 30, National Oilwell Varco reported revenue of $5.6 billion, an 18% increase from a quarter earlier. Earnings were $531 million, or $1.24 per fully diluted share, down from $602 million or $1.42 per fully diluted share a year earlier.
National Oilwell Varco revenue and earnings history:
The Peter Lynch chart also suggests this stock is undervalued:
National Oilwell Varco has a market cap of $30.22 billion with a P/E ratio of 13.00 and P/S ratio of 1.40. The dividend yield of National Oilwell Varco stocks is 0.90%. National Oilwell Varco had an annual average earnings growth of 28.4% over the past 10 years. GuruFocus rated National Oilwell Varco the business predictability rank of 2.5-star.
General Motors (NYSE:GM)
Bill Nygren Purchased 5.3 million shares of General Motors Co. in the second quarter when the price averaged $32 per share. The position has a 1.9% portfolio weight. The price has increased 10% since.
General Motors reported second quarter revenue of $39.1 billion, increased from $37.6 billion a year earlier. Earnings were $1.5 billion, or $0.75 per fully diluted share, which included $0.5 billion, or $0.29 per fully diluted share in increased tax expense. A year earlier, earnings were $1.5 billion, or $0.90 per fully diluted share.
General Motors revenue and earnings history:
The Peter Lynch chart also suggests the stock is undervalued:
General Motors has a market cap of $47.85 billion; its shares were traded at around $34.57 with a P/E ratio of 9.80 and P/S ratio of 0.40.
Read Bill Nygren’s comments on these stocks in his second quarter letter.
See his portfolio here. Also check out the Undervalued Stocks, Top Growth Companies and High Yield stocks of Bill Nygren.
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