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Lou Simpson’s Top Five Stocks at Year End

February 13, 2014 | About:
Monica Wolfe

Monica Wolfe

133 followers

Lou Simpson (Trades, Portfolio) did not make any new buys or sell outs over the past quarter, but he was very active in increasing and decreasing the positions he holds. As of the most recent quarter Simpson holds on to 13 stocks valued at over $2.1 billion. The following five companies represent the guru’s top holdings as of the close of the fourth quarter.

United Parcel Service (UPS)

The guru’s largest holding is in United Parcel Service, or UPS, where he maintains 2,378,662 shares of the company’s stock. This holding makes up for 11.9% of his total assets managed as well as 0.25% of the company’s shares outstanding.

Over the duration of the fourth quarter Simpson upped his position 8.16% by purchasing a total of 179,376 shares. He purchased these shares near the average quarterly price of $98.5 per share. From this average price the price per share is down a slight -2.5%.

Simpson’s historical holding history:

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UPS is a package delivery organization less-than-truckload industry and the premier provider of global supply chain management solutions.

UPS’s historical revenue and earnings growth:

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The analysis on UPS notes that the company has issued $2.8 billion of debt over the past three years, its price is near a 10-year high and its operating margin is expanding.

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

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United Parcel Service has a market cap of $88.56 billion. Its shares are currently trading at around $95.84 with a P/E ratio of 59.20, a P/S ratio of 1.70 and a P/B ratio of 24.40. The dividend yield of UPS stock is currently at 2.60%.

Oracle (ORCL)

Simpson’s second largest position goes to Oracle where he holds on to 5,887,075 shares of the company’s stock. His holdings make up for 10.7% of his total assets managed and a much smaller 0.13% of the company’s shares outstanding.

During the fourth quarter Simpson increased his holdings 11.03% by purchasing 584,722 shares of the company’s stock. He bought these shares near the estimated average quarterly price of $34.38 per share. Since then the price per share has jumped up approximately 10.7%.

Simpson’s holding history as of the fourth quarter:

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Oracle provides technologies of cloud computing, including database and middleware as well as web-based applications, virtualization, clustering and systems management. It provides cloud services as well as software and hardware products to other cloud service providers, both public and private.

Oracle’s historical revenue and net income:

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The analysis on Oracle reports that the company’s revenue has slowed down over the past year, its price is near a 10-year high, its operating margin is expanding and its dividend yield is also near a 5-year high.

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

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Oracle Corporation has a market cap of $171.62 billion. Its shares are currently trading at around $38.16 with a P/E ratio of 16.30, a P/S ratio of 4.80 and a P/B ratio of 3.90. The company had an annual average earnings growth of 18.90% over the past ten years.

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

Wells Fargo (WFC)

Lou Simpson (Trades, Portfolio)’s third largest position is in Wells Fargo where he currently owns 5,887,075 shares. His holdings make up for 10.4% of his total portfolio and 0.09% of Wells Fargo’s shares outstanding.

During the fourth quarter Simpson decreased his holdings -2.36% by selling 1,390,586 shares of the company’s stake. He sold these shares in the quarterly price range of $40.24 to $45.54, with an estimated average quarterly price of $43.19. Since then the price per share is up 6.5%%.

Simpson’s holding history as of the close of the fourth quarter:

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Wells Fargo is a financial services companies, providing a range of retail banking and brokerage, asset and wealth management and corporate and investment banking products and services to customers.

Wells Fargo’s historical revenue and net income:

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The analysis on Wells Fargo reports that the company’s operating margin is expanding, its dividend yield is close to a 3-year high, its price is near a 10-year high and its revenue has been in decline over the past three years.

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

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Wells Fargo has a market cap of $239.99 billion. Its shares were traded at around $45.56 with a P/E ratio of 11.90, a P/S ratio of 2.90 and a P/B ratio of 1.60. The company offers a dividend yield of 2.60%. Wells Fargo had an annual average earnings growth of 3.70% over the past ten years.

Berkshire Hathaway (BRK.B)

Simpson’s fourth largest position is in Berkshire Hathaway where he holds on to 1,754,366 shares of the company’s stock. His holdings represent 9.9% of his total portfolio as well as 0.08% of the company’s shares outstanding.

During the past quarter Simpson increased his holdings 7.07% by purchasing 115,904 shares of Berkshire Hathaway. He bought these shares in the quarterly price range of $111.37 to $118.56, with an estimated average quarterly price of $115.63. Since then the price per share has decreased approximately -2%.

Lou Simpson (Trades, Portfolio)’s historical holding history:

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Berkshire Hathaway is a conglomerate holding company owning subsidiaries engaged in a number of business activities, including property and casualty insurance and reinsurance, utilities and energy, finance, manufacturing, service and retailing.

Berkshire Hathaway’s historical revenue and net income:

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The analysis on Berkshire Hathaway reports that the company’s price is near a 10-year high, it has shown predictable revenue and earnings growth and its operating margin is expanding.

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

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Berkshire Hathaway has a market cap of $255.18 billion. Its shares are currently trading at around $109.158 with a P/E ratio of 13.60, a P/S ratio of 1.40 and a P/B ratio of 1.30. Berkshire Hathaway had an annual average earnings growth of 6.80% over the past ten years.

GuruFocus rated Berkshire Hathaway the business predictability rank of 2.5-star.

Valeant Pharmaceuticals (VRX)

The guru’s fifth largest holding goes to Valeant Pharmaceuticals where he holds on to 1,658,555 shares of the company’s stock. This position makes up for 9.3% of his total holdings as well as 0.50% of the company’s shares outstanding.

The guru cut his holdings a minor -0.14% over the past quarter by selling a total of 2,362 shares of the company’s stock. He sold these shares near the estimated average quarterly price of $109.57 per share. Since then the price per share has increased a notable 28.2%.

Simpson’s historical holding history:

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Valeant is a multinational specialty pharmaceutical company that develops, manufactures and markets a broad range of pharmaceutical products primarily in the areas of neurology, dermatology and branded generics. Valeant is focused on the neurology and dermatology therapeutic areas.

Valeant Pharmaceuticals’ historical revenue and net income:

The analysis on Valeant Pharmaceuticals reports that the company’s price is near a 10-year high, the company has issued $8.6 billion of debt over the past three years and its P/B and P/S ratios are trading at historical highs.

Valeant Pharmaceuticals International has a market cap of $46.81 billion. Its shares are currently trading at around $140.51 with a P/S ratio of 9.40 and a P/B ratio of 9.40. The company had an annual average earnings growth of 0.20% over the past ten years.

Check out Lou Simpson’s entire portfolio here.

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