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FPA Capital’s Top Five of Q4

January 23, 2014 | About:
Monica Wolfe

Monica Wolfe

127 followers

First Pacific Advisors Capital Fund and the FPA New Income Fund, reported their third quarter portfolio holdings earlier today. FPA Capital primarily invests in the stocks of smaller companies, and according to his investing philosophy they base their investments on the following criteria: strong balance sheets, free cash flow, an understandable and successful business strategy under capable management and unique business characteristics.

Over the past quarter the portfolio managers at FPA Capital added one new stock to their portfolio, bringing the total number of stocks to 28 which are valued at $861 million. 

The following five stocks are FPA Capital’s largest holdings as of the close of the fourth quarter.

Arrow Electronics (ARW)

FPA Capital’s largest holding is in Arrow Electronics where they hold on to 1,515,500 shares of the company’s stock.  The fund position represents 9.5% of their total portfolio and 1.51% of the company’s shares outstanding.

The fund did not alter their position in the fourth quarter.  They last changed his holdings in Arrow Electronics in the third quarter when they cut their holdings by approximately 600,000 shares. Since the last transaction, the price per share is up approximately 17.7%

Rodriguez’s historical holding history:

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Arrow Electronics is a global provider of products, services and solutions to industrial and commercial users of electronic components and computer products. The company offers products and services such as materials planning, new product design, programming, inventory management and a variety of online supply chain tools.

Arrow Electronics’ historical revenue and net income:

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The analysis on Arrow Electronics reports that the company’s revenue has slowed down over the past year, the price is nearing a 10-year high and it has issued $695.574 million of debt over the past three years.

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

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There are currently nine gurus with positions in Arrow Electronics.  Check out their holdings here.

Arrow Electronics has a market cap of $5.35 billion. Its shares are currently trading at around $53.19 with a P/E ratio of 12.80, a P/S ratio of 0.30 and a P/B ratio of 1.40.

Avnet Inc (AVT)

The fund’s second largest position is in Avnet where he holds on to 1,772,400 shares of the company’s stock.  This position makes up for 9.1% of the fund’s total portfolio as well as for 0.39% of the company’s shares outstanding.

FPA did not alter their position in the fourth quarter.  They last changed their holdings in the third quarter when they sold over 550,000 shares.  Since this last move in the company the price per share has increased approximately 13.6%.

Rodriguez’s historical holding history:

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Avnet is an industrial distributor of electronic components, enterprise computer and storage products and embedded subsystems. The company creates a link in the technology supply chain that connects the world's electronic component and computer product manufacturers and software developers with its customer base.

Avnet’s historical revenue and net income:

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The analysis on Avnet reports that the company’s revenue has slowed down over the past year, its price is nearing a 10-year high and it has issued $513.415 million of debt.

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

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Avnet has a market cap of $6.09 billion. Its shares are currently trading at around $44.22 with a P/E ratio of 13.10, a P/S ratio of 0.20 and a P/B ratio of 1.30. 

Rowan Companies PLC (RDC)

The fund’s third largest holding goes to Rowan Companies where they hold on to 2,065,700 shares of the company’s stock. This position in the company represents 8.5% of their total portfolio as well as 1.66% of the company’s shares outstanding.

The fund did not alter his position in Rowan Companies over the duration of the fourth quarter.  During the third quarter they sold nearly 200,000 shares of the company’s stock, and since that move the price per share has dropped about -7.7%. 

FPA Capital’s historical holding history:

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Rowan Companies is a provider of international and domestic contract drilling services. The company also owns and operates a manufacturing division that produces equipment for the drilling, mining and timber industries.

Rowan Companies’ historical revenue and net income:

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The analysis on Rowan Companies reports that the revenue has been in decline for the past five years, the operating margin has been in a 5-year decline and the P/S ratio is nearing a 2-year low.

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

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Rowan Companies has a market cap of $4.12 billion. Its shares are currently trading at around $33.19 with a P/E ratio of 16.00, a P/S ratio of 2.70 and a P/B ratio of 0.90. The company had an annual average earnings growth of 11.80% over the past ten years.

Western Digital Corporation (WDC)

The guru’s fourth largest holding goes to Western Digital Corporation where they hold on to 647,600 shares of the company’s stock.  This position makes up for 6.3% of the fund’s total portfolio as well as 0.27% of the company’s shares outstanding.

Over the past quarter the fund dropped their stake -18.18% by selling 143,900 additional shares of the company’s stock.  He sold these shares in the fourth quarter price range of $63.12 to $83.90, with an estimated average quarterly price of $73.92 per share.  Since then the price per share has increased approximately 19.8%.

FPA Capital’s historical holding history:

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Western Digital is an industry developer and manufacturer of storage solutions that enable people to create, manage, experience and preserve digital content. The company designs and makes storage devices and home entertainment products under the HGST, WD and G-Technology brands.

Western Digital’s historical revenue and net income:

The analysis on Western Digital reports that the company’s price is near a 10-year high, it has shown predictable revenue and earnings growth and its P/E and P/S ratios are trading near historical highs.

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

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Western Digital has a market cap of $20.94 billion. Its shares are currently trading at around $88.53 with a P/E ratio of 22.80, a P/S ratio of 1.40 and a P/B ratio of 2.50. The company had an annual average earnings growth of 27.30% over the past ten years.

GuruFocus rated Western Digital the business predictability rank of 3.5-star.

Rosetta Resources (ROSE)

The fund’s fifth largest holding is in Rosetta Resources where they maintain 647,600 shares of the company’s stock.  This position makes up for 5.9% of their total portfolio as well as 1.73% of the company’s shares outstanding.

During the fourth quarter FPA decreased their position -25.41% by selling off 360,700 shares. They bought these shares in the price range of $46.41 to $61.82 per share, with an estimated average quarterly price of $53.88 per share.  Since then the price per share has dropped approximately -14.1%.

The fund’s holding history of Rosetta as of the fourth quarter:

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Rosetta is an exploration and production company involved in the acquisition and development of onshore energy resources in the U.S. The company owns producing and non-producing oil and gas properties in proven or prospective basins that are primarily located in South Texas.

Rosetta Resources’ historical revenue and net income:

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The analysis on Rosetta reports that the price is nearing a 10-year high, its P/S ratio is nearing a 1-year high and it has issued $769 million of debt over the past three years.

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

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Rosetta Resources has a market cap of $2.89 billion. Its shares are currently trading at around $58.25 with a P/E ratio of 12.60, a P/S ratio of 3.40 and a P/B ratio of 2.10.

Check out Robert Rodriguez’s completer fourth quarter holdings here.

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