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Gabelli and Robbins Highlight Guru Buys of the Week

December 27, 2013 | About:
Monica Wolfe

Monica Wolfe

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The following information is a highlight of the real-time guru activity we saw this week. To view more information on these gurus, check out their guru portfolios. The “Real Time Picks” reports the stock purchases and sells that Gurus have made within the prior two weeks. If a Guru makes a purchase or sell of a company in which they own a greater-than 5% stake, SEC regulations require them to report their transaction within two days. This week we saw notable increases in Real Time activity from Mario Gabelli and Larry Robbins.

Larry Robbins

On Dec. 18 Robbins upped his stake in Tenet by 10.25%. The guru added 1 million shares to his holdings at an average price of $40.92 per share. Since his buy, the price per share is trading at about -3% lower at $39.81 per share.

Even more recently, on Dec. 20 Robbins added an additional 5.99% to his holdings. The guru purchased 644,582 shares at $40.31 per share. This cost the guru approximately $25,983,100, and since his buy the price per share is now down about -1%.

The guru now holds on to 11,403,921 shares of the company’s stock, representing 11.22% of the company’s shares outstanding.

Robbins’ historical holding history of Tenet Healthcare:

1388181479018.png

After decreasing his holdings multiple times over the past year, the guru has already increased his position three times since the close of the third quarter. As of the most recent quarter Tenet Healthcare was Robbins’ seventh largest holding with a 3.5% portfolio weighting.

Tenet Healthcare is a health care services company that operates acute care hospitals, ambulatory surgery centers, diagnostic imaging centers and related health care facilities. Its core business is focused on providing acute care treatment, including inpatient care, intensive care, cardiac care, radiology services and emergency medical treatment.

Tenet Healthcare’s historical revenue and net income:

1388182145211.png

The analysis on Tenet Healthcare reports that over the past three years the company has issued $1 billion of debt, its asset growth is currently faster than its revenue growth, but on the other hand, the company’s operating margin has shown consistent signs of expansion.

The top guru shareholders of THC:

  1. Larry Robbins: 11,403,921 shares, representing 11.22% of the company’s shares outstanding.
  2. John Griffin: 3,085,000 shares, representing 3.04% of the company’s shares outstanding.
  3. Vanguard Health Care: 1,400,000 shares, representing 1.38% of the company’s shares outstanding.
The company most recently presented at the Bank of America Merrill Lynch Leveraged Finance Conference on Dec. 3. You can listen to a recording of that presentation here.

Prior to that the company released its third quarter results which highlighted:

  • Adjusted EBITDA of $288 million, representing a 7.1% increase.
  • Net operating revenues of $2.408 billion, representing an 8.4% increase.
  • The company’s California Provider Fee Program was extended through 2016 in an enhanced 36-month program.
  • Total net patient revenue per adjusted admission was $11,928, representing a 3% increase.
​ Tenet Healthcare Corporation has a market cap of $3.95 billion. Its shares are currently trading at around $39.84 with a P/S ratio of 0.40 and a P/B ratio of 4.70. The company had an annual average earnings growth of 7.50% over the past five years.

Mario Gabelli

Over the past week Mario Gabelli altered his holdings in two companies.  The guru upped his stake in Communications Systems (JCS) and reduced his position in Park-Ohio Holdings (PKOH).

Over the past week Mario Gabelli upped his stake in Communications Systems 7.06% by adding an additional 21,779 shares of the company’s stock.  He bought these shares at an average price of $11.05 per share, and the shares are now trading slightly lower at $11.04 per share.  As of his most recent buy, the guru holds on to 330,172 shares of the company’s stock, representing 3.86% of the company’s shares outstanding.

Gabelli’s holding history as of the close of the third quarter:

1388183168038.png

Communications Systems manufactures and sells modular connecting and wiring devices for voice and data communications, digital subscriber line filters, and structured wiring systems as well as media and rate conversion products for telecommunications networks.

Communications Systems’ historical revenue and net income:

1388183277066.png

The analysis on Communications Systems reports that the company’s price is near a 1-year high, its revenue has been in decline over the past five years and its P/S ratio is trading at near a 1-year low.

Gabelli, John Keeley and Jim Simons all maintain a position in the company.  Gabelli holds the largest stake, maintaining 3.86% of the company’s shares outstanding.

Communications Systems has a market cap of $93.4 million.  Its shares are currently trading at around $10.96 with a P/S ratio of 0.70 and a P/B ratio of 1.10.  The company holds a dividend yield of 5.90% and its annual average earnings growth has been 3.80% over the past ten years.

Also over the past week Mario Gabelli made a slight reduction in his holdings in Park-Ohio Holdings.  The guru cut his position -2.08% by selling 20,600 shares of the company’s stock.  He sold these shares for $49.89 per share, and now the company is trading 1% higher at $50.58 per share.  As of his most recent sell, Gabelli holds on to 971,502 shares of Park-Ohio, representing 7.85% of the company’s shares outstanding.

Gabelli’s holding history of Park-Ohio as of the close of the third quarter:

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The Company performs industrial supply chain logistics and diversified manufacturing through three operating segments: supply technologies, aluminum products and manufactured products.

Park-Ohio’s historical revenue and net income:

1388184145478.png

The analysis on the company reports that its price is near a 10-year high, it has issued $55.072 million of debt over the past three years and its P/S ratio is also trading at near a 10-year high.

Mario Gabelli, Joel Greenblatt and Jim Simons all maintain holdings in PKOH.  Gabelli is the largest shareholder with 7.85% of the company’s shares outstanding.

The Peter Lynch Chart suggests that the company is currently undervalued:

1388184177201.png

Park-Ohio has a market cap of $625.5 million.  Its shares are currently trading at around $50.58 with a P/E ratio of 14.70, a P/S ratio of 0.50 and a P/B ratio of 4.40.

You can check out all of the guru’s real time picks here.

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