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Scott Black's Largest Stock Buys of the Fourth Quarter

January 09, 2014 | About:
Holly LaFon

Holly LaFon

273 followers

Scott Black (Trades, Portfolio) is founder and president of Delphi Management, a long-only firm operating bottom-up, value-based strategies. Black told CNBC in November that despite the rising tide in the market, attractive opportunities still exist. “What you have to do is find deep value, high-return on equity companies that have solid earnings prospects that still sell at low multiples,” he said.

In the fourth quarter, Black purchased 10 new stocks, for a total of 117 holdings in his portfolio, valued at $916 million. Quarter-over-quarter turnover in the portfolio totaled 7%.

Black’s top new positions are: KLA-Tencor Corporation (KLAC), Flextronics International Ltd. (FLEX), Deluxe Corporation (DLX), General Motors Co. (GM) and Vishay Intertechnology (VSH).

KLA Tencor Corporation (KLAC)

Black purchased 121,257 shares of KLA Tencor Corp., which had a quarterly average price of $63. The holding accounts for 0.85% of his portfolio. KLA Tencor shares gained 31% over the past year, and trade around $62.53 on Thursday, which is near a 10-year high.

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KLA Tencor is a supplier to the semiconductor, light emitting diode, data storage and general materials research industries. It has a $10.41 billion market cap.

In fiscal 2013, KLA Tencor had return on equity of 15.6%, compared to 22.8% the previous year. Its five-year per-share growth rates are 20.2% for revenue, 48.1% for free cash flow and 14.9% for book value.

KLA Tencor 10-year revenue and earnings history:

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The company has a P/E of 20.2, P/B of 3.1 and P/S of 3.79.

Flextronics International Ltd. (FLEX)

Black purchased 712,528 shares of Flextronics International Ltd., which had a quarterly average price of $8. The holding represents 0.6% of his portfolio. Flextronics’ share price rose 22.3% over the past year, to trade around $7.70 on Thursday.

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Flextronics is a global supply chain solutions company for original equipment manufacturers (OEM) through four business groups: high reliability solutions, high velocity solutions, integrated network solutions, and industrial and emerging industries. Its market cap is $4.7 billion.

Flextronic’s return on equity in fiscal 2013 was 12.3%, compared to 21.4% in 2012. It also had five-year, per-share annual growth rates of 1.7% for revenue and 12.4% for book value. Its free cash flow had an annual decline rate of 5.3% over the same period.

Flextronics 10-year revenue and earnings history:

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The company has a P/E of 27.8, P/B of 2.2 and P/S of 0.2.

Deluxe Corporation (DLX)

Black bought 54,385 shares of Deluxe Corporation, which had a quarterly average price of $48. The holding represents 0.31% of the portfolio. Deluxe Corporation shares rose 61% over the past year to trade around $53.37 on Thursday, which is near a 10-year high.

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Deluxe is a personal checks company that helps small businesses and financial institutions with printed materials, marketing and other products and services. Its market cap is $2.69 billion.

For 2012, the company had return on equity of 39.4%, compared to 47.8% in 2011. The five-year, per-share annual growth rates for Deluxe Corp. are 1.2% for revenue, 8.2% for EBITDA, 7.4% for free cash flow and 67.7% for book value.

Deluxe 10-year revenue and earnings history:

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The company has a P/E of 14.8, P/B of 5.1 and P/S of 1.7, which is near a 10-year high.

General Motors Co. (GM)

Black purchased 59,580 shares of General Motors, which had a quarterly average price of $38. The portfolio weighting of the position is 0.27%. GM shares gained 36% over the past year, trading around $40.49 a share on Thursday, which is near a five-year high.

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General Motors is an automobile manufacturer with a $56.24 billion market cap.

Return on equity for fiscal 2012 was 17.1%, compared to 24.1% for 2011. The company’s free cash flow per share increased at a rate of 4.5% annually, while revenue declined at rates of 7.7% and EBITDA at 17.4%, over the past five years.

General Motors’ long-term revenue and earnings history:

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The company has a P/E of 12.9, P/B of 2 and P/S of 0.44.

Vishay Intertechnology (VSH)

Black purchased 124,400 shares of Vishay Intertechnology, which traded at an average quarterly price of $13. The holding represents 0.18% of the portfolio. Vishay shares gained 27% for the past year, and trade around $13.49 on Thursday.

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Vishay Intertechnology is a global semiconductor and passive electronic components company with a $1.99 billion market cap.

The return on equity of Vishay for fiscal 2012 was 7.6%, compared to 14.9% for 2011. The company’s per-share annual growth rates for the past five-years are 2.3% for revenue, 9.1% for free cash flow and 8.9% for book value.

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Vishay has a P/E of 17.8, P/B of 1.1 and P/S of 0.9.

For more stocks of Scott Black (Trades, Portfolio), see his portfolio here. Not a Premium Member of GuruFocus? Try it free for 7 days here!


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