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GuruFocus Real Time Picks of the Week

January 10, 2014 | About:
Monica Wolfe

Monica Wolfe

121 followers

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 Seth Klarman (Trades, Portfolio), Jean-Marie Eveillard (Trades, Portfolio) and Chris Davis (Trades, Portfolio).

Chris Davis (Trades, Portfolio)

Over the past week Chris Davis (Trades, Portfolio) of Davis Selected Advisers added to his holdings in Laboratory Corporation of America (LH).  The guru upped his stake 21.11% by purchasing 1,666,957 shares of the company’s stock.  He bought these shares at an average price of $91.37 per share, and since then the price per share is up about 1% to $92.57 per share.

Davis’ most recent buy gives him control of 10.61% of the company’s shares outstanding and accounts for approximately 3% of his total portfolio.  Davis now holds on to a total of 9,561,830 shares of Laboratory Corporation of America.

Chris Davis (Trades, Portfolio)’ historical holding history as of the close of the third quarter:

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The guru has steadily been increasing his position in Laboratory Corporation since the fourth quarter of 2012.

Laboratory Corporation of America Holdings is an independent clinical laboratory company in the United States.  Through its national network of laboratories, the company offers a broad range of clinical laboratory tests that are used by the medical profession in routine testing, patient diagnosis, and in the monitoring and treatment of disease.

Laboratory Corporation’s historical revenue and net income:

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The analysis on Laboratory Corporation reports that the company has issued $1.3 billion of debt over the past three years, it has shown predictable revenue and earnings growth and its P/E, P/B and P/S ratios are all trading at historical lows.

Most recently the company updated its 2013 guidance and provided its 2014 preliminary guidance which reported:

  • Reaffirmed its prior revenue growth guidance of approximately 3%.
  • Updated its non-GAAP full year 2013 EPS to between $6.90 and $7.05.
  • The company expects that revenue growth will be 2% in 2014.
  • The company will release its 2013 results on Feb. 7, 2014.

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

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Laboratory Corporation of America Holdings has a market cap of $8.09 billion.  Its shares are currently trading at around $92.57 with a P/E ratio of 15.30, a P/S ratio of 1.50 and a P/B ratio of 3.10.  The company had an annual average earnings growth of 12.10% over the past ten years. 

GuruFocus rated the company the business predictability rank of 4.5-star.

Jean-Marie Eveillard (Trades, Portfolio)

Over the past week Jean-Marie Eveillard (Trades, Portfolio) of First Eagle Investment Management made a notable decrease of their position in UniFirst Corporation (UNF).  The guru cut his position -70.49% by selling 528,976 shares of the company’s stock.  He sold these shares at an average price of $107.00 per share, and now the stock is trading up about 2% to $109 per share.

The guru’s most recent sell gives him control of 1.11% of the company’s shares outstanding.  Eveillard now holds on to 221,413 shares of the company’s stock.

Jean-Marie Eveillard (Trades, Portfolio)’s historical holding history as of the close of Q3:

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UniFirst Corporation, together with its subsidiaries, is a provider of workplace uniforms and protective work wear clothing in the U.S. It has operating segments: US and Canadian Rental and Cleaning, Manufacturing, Specialty Garments Rental and Cleaning, First Aid and Corporate.

UniFirst Corporation’s historical revenue and net income:

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The analysis on UniFirst reports that the company has shown predictable revenue and earnings growth, its operating margin is expanding and its dividend yield is near a 10-year low.  The analysis also notes that the company’s price is sitting near a 10-year high.

The company recently announced their first quarter 2014 results which reported:

  • Revenues were up 4.3% to $346.7 million.
  • Net income of $34.5 million, or $1.71 per share, representing a 12% increase from last year.
  • Cash provided by operating activities of $68.6 million, up 22.2% from last year.
  • Cash and cash equivalents at the end of the quarter of $141.8 million, down from $197.5 mil.

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

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UniFirst Corporation has a market cap of $2.17 billion.  Its shares are currently trading at around $108.13 with a P/E ratio of 18.30, a P/S ratio of 1.60 and a P/B ratio of 2.10.  The company had an annual average earnings growth of 9.20% over the past ten years. 

GuruFocus rated UniFirst the business predictability rank of 4.5-star.

Seth Klarman (Trades, Portfolio)

Over the past week Seth Klarman (Trades, Portfolio) of The Baupost Group made one real time reduction; the guru reduced his holdings in Enzon Pharmaceutical (ENZN).  The guru cut his holdings in the company -43.6% by selling 3,353,595 shares of the company’s stock.  He sold these shares at an average price of $1.15 per share; the shares are still currently trading at around the same price.

The guru’s most recent reduction leaves him in control of 9.88% of the company’s shares outstanding.

Klarman’s historical holding history:

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Enzon Pharmaceuticals is a biotechnology company engaged in the research and development of therapeutics for cancer patients primarily in the US. Its drug development programs utilize two platforms - Customized PEGylation Linker Technology and third-generation messenger ribonucleic acid antagonists utilizing the Locked Nucleic Acid technology.

Enzon’s historical revenue and net income:

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The analysis n Enzon reports that the company’s revenue has been in decline over the past five years, its price is at a 10-year low and its Piotroski F-Score is currently high, indicating a healthy situation for the company.

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

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Enzon Pharmaceuticals has a market cap of $50.238 million.  Its shares are currently trading at around $1.15 with a P/E ratio of 7.70, a P/S ratio of 1.54 and a P/B ratio of 2.50.

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

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