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 (NASDAQ:KLAC), Flextronics International Ltd. (NASDAQ:FLEX), Deluxe Corporation (NYSE:DLX), General Motors Co. (NYSE:GM) and Vishay Intertechnology (NYSE:VSH).
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KLA Tencor Corporation (NASDAQ: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.
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:
The company has a P/E of 20.2, P/B of 3.1 and P/S of 3.79.
Flextronics International Ltd. (NASDAQ: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.
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:
The company has a P/E of 27.8, P/B of 2.2 and P/S of 0.2.
Deluxe Corporation (NYSE: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.
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:
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. (NYSE: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.
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:
The company has a P/E of 12.9, P/B of 2 and P/S of 0.44.
Vishay Intertechnology (NYSE: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.
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.
Vishay has a P/E of 17.8, P/B of 1.1 and P/S of 0.9.