As a long-term oriented value investor, Rolfe’s primary deterrent to making more purchases during the quarter was price, as he stated in his investor letter:
“In terms of current portfolio positioning, due to the net trimming of a few holdings during the second quarter, portfolios are overweight in cash, though we expect it to be put to work as soon as the market serves up opportunity. However, at the present time, our bench of prospective new companies to invest in is still quite bare. It is not that we haven't identified terrific companies that we would like to own there are plenty in fact. The gating factor continues to be valuation, parti cularly in the context of a booming bull market. That said, our current short list of our most attractive purchase candidates largely reside within the current portfolio.”
Rolfe’s top holdings include Apple Inc. (NASDAQ:AAPL), Berkshire Hathaway Inc. (NYSE:BRK.B), Qualcomm Inc. (NASDAQ:QCOM), EMC Corporation (NYSE:EMC) and Cognizant Technology Solutions Corporation (NASDAQ:CTSH).
The New Buy
M&T Bank Corp. (NYSE:MTB)
Rolfe purchased 1,476,540 shares of M&T Bank Corp. (NYSE:MTB), representing 4% of his portfolio. The average third quarter share price was $116. Shares have declined about 3% from the average.
M&T Bank is one of the 20 largest U.S. headquartered commercial bank holding companies by assets which stood at $83.2 billion as of June 30, 2013. The $14.74 billion market cap bank operates 725 branches across the U.S. and Canada.
M&T Bank has five-year annual growth rates of 7.4% for revenue, 8.7% for EBITDA and 6.6% for book value. Free cash flow exhibited a decline rate of 19.5% annually over the same period.
M&T’s 10-year revenue and earnings growth history:
The bank’s shares were traded at around $113.18 on Friday, near a 10-year high price. They have a P/E ratio of 12.10 and P/S ratio of 3.20, near a five-year high. The P/B ratio is 1.46, close to a one-year low. The dividend yield of M&T Bank Corp stocks is 2.50%, near a five-year low.
GuruFocus rated M&T Bank Corp the business predictability rank of 3-star.
See more of David Rolfe’s stock picks in his portfolio here. Also check out the Undervalued Stocks, Top Growth Companies, and High Yield stocks of David Rolfe.
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