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Guru Donald Smith's Top Five Q4 Stocks

February 10, 2014 | About:
Monica Wolfe

Monica Wolfe

130 followers

Donald Smith (Trades, Portfolio) is the guru and CIO of Donald Smith (Trades, Portfolio) & Co., a registered investment adviser specializing in managing value equity accounts for tax-exempt and taxable funds, as well as high net worth individuals. The deep-value investing fund looks for out-of-favor stocks that are valued in the bottom decile of price-to-tangible book value ratios.

Over the past quarter Donald Smith (Trades, Portfolio) added three new stocks to his holdings bringing his total portfolio to 80 stocks valued at $5.017 billion.

Micron Technology (MU)

The guru’s largest holding is in Micron Technology where he maintains 20,320,887 shares of the company’s stock. This position represents 8.8% of his portfolio as well as 1.96% of the company’s shares outstanding.

During the fourth quarter Smith reduced his position -9.7% by selling a total of 2,181,707 shares of the Micron’s stock. He sold these shares in the fourth quarter portfolio of $16.55 to $23.14 per share with an estimated average quarterly price of $19.44 per share. The price per share has since then jumped up an additional 26.1%.

Donald Smith (Trades, Portfolio)’s historical holding history:

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Micron Technology is global manufacturer and marketer of semiconductor devices as well as other memory technologies, packaging solutions and semiconductor systems for use in leading-edge computing, consumer, networking, automotive, industrial, embedded and mobile products.

Micron Technology’s historical revenue and net income:

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The analysis on Micron Technology reports that over the past three years the company has issued $715 million of debt, its revenue has slowed down over the past year, its price is at a 10-year high and its P/E, P/S and P/B ratios are all trading at near historical highs.

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

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Micron Technology has a market cap of $26.38 billion. Its shares are currently trading at around $24.87 with a P/E ratio of 16.40, a P/S ratio of 2.40 and a P/B ratio of 2.90. Micron had an annual average earnings growth of 1.40% over the past ten years.

GuruFocus rated Micron Technology the business predictability rank of 3-star.

AerCap NV (AER)

Smith’s second largest holding is in AerCap where the guru owns 9,528,538 shares of the company’s stock, representing 7.3% of his total portfolio as well as 8.39% of the company’s shares outstanding.

During the fourth quarter Donald Smith (Trades, Portfolio) cut his holdings -6.16% by selling 625,378 shares of the company’s stock. The guru sold these shares in the quarterly price range of $18.15 to $38.53, with an estimated average quarterly price of $23.55 per share. Since then the price per share has increased 63.4% from the average quarterly price.

Donald Smith (Trades, Portfolio)’s historical holding history:

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AerCap Holdings N.V. is an integrated global aviation company, conducting aircraft leasing and trading aircrafts. It also provides aircraft management services to other owners of aircrafts. It operates its business on a global basis, providing aircraft, engines and parts to customers in every major geographical region.

AerCap Holdings’ historical revenue and earnings growth:

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The analysis on AerCap reports that the company’s price is near a 10-year high, its revenue has been in decline for the past five years and over the past three years the company issued $511.522 million of debt.

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

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AerCap Holdings has a market cap of $4.32 billion. Its shares are currently trading at around $35.05 with a P/E ratio of 18.20, a P/S ratio of 4.60 and a P/B ratio of 1.90.

WPX Energy (WPX)

The guru’s fourth largest holding is in WPX Energy where he holds on to 12,808,677 shares. His position in the company makes up for 5.2% of his total assets managed and 6.39% of the company’s shares outstanding.

During the fourth quarter Smith reduced his holdings -5.68% by selling a total of 771,715 shares of the company’s stock. He sold these shares in the price range of $17.80 to $23.45, with an estimated average quarterly price of $19.97 per share. From that average price, the price per share has dropped about -4.4%.

Smith’s historical holding history:

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WPX Energy is an independent natural gas and oil exploration and production company engaged in the exploitation and development of long-life unconventional properties.

WPX Energy’s historical revenue and net income:

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The analysis on WPX Energy reports that the company’s revenue has been in decline over the past year, it has been in operating loss over the past three years and also over the past three years the company has issued $2.5 billion of debt.

WPX Energy has a market cap of $3.8 billion. Its shares are trading at around $18.92 with a P/S ratio of 1.30 and a P/B ratio of 0.80.

JetBlue Airways Corporation (JBLU)

Donald Smith (Trades, Portfolio)’s fourth largest holding is in JetBlue Airways where he maintains 26,174,069 shares of the company’s stock. This position makes up for 4.5% of his total portfolio holdings as well as 9.27% of the company’s shares outstanding.

Over the past quarter Smith cut his holdings -9.05% by selling 2,605,652 shares of the company’s stock. He sold these shares in the price range of $6.63 to $9.09, with an estimated average quarterly price of $7.94 per share. Since then the price per share is up approximately 6.4%.

Donald Smith (Trades, Portfolio)’s historical holding history:

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Jet Blue is a passenger airline that has established a new airline category - a 'value airline' - based on service, style and cost.

Jet Blue’s historical revenue and earnings growth:

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The analysis on JetBlue reports that the company’s price is sitting at its 5-year high, its operating margin is expanding and its P/E and P/S ratios are sitting near 3-year highs.

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

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JetBlue Airways has a market cap of $2.4 billion. Its shares are currently trading at around $8.49 with a P/E ratio of 22.80, a P/S ratio of 0.50 and a P/B ratio of 1.20. The company had an annual average earnings growth of 1.20% over the past ten years.

Air France-KLM (AFLYY)

The guru’s fifth largest holding goes to Air France where he maintains 19,311,805 shares. This position makes up for 4% of his total assets managed as well as 6.43% of the company’s shares outstanding.

Over the past quarter Smith reduced his position a slight -0.89% by selling 172,632 shares of Air France’s stock. Smith sold these shares in the quarterly price range of $9.49 to $10.77, with an estimated average quarterly price of $10.08 per share. Since then the price per share is up roughly 16.2%.

Smith’s holding history as of the fourth quarter:

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Air France-KLM is the result of the merger between Air France and KLM. It provides passenger transportation services on scheduled flights. It operates through Passenger, Cargo, Maintenance, and Other segments. The company also offers freight transport services; and aeronautics maintenance services to other airlines and customers.

Air France’s historical revenue and net income:

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The analysis on Air France reports that the company’s revenue has slowed down over the past year, over the past three years the company has issued EUR1.2 billion of debt and the company has seen long term decline in its operating and gross margins.

Air France-KLM has a market cap of $3.52 billion. Its shares are currently trading at around $11.71 with a P/S ratio of 0.10 and a P/B ratio of 0.80.

Check out Donald Smith’s complete fourth quarter portfolio here.

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Rating: 3.0/5 (1 vote)

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