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Southeastern Asset Management, Chase Coleman Add to Positions

March 07, 2014 | About:
fox business

Holly LaFon

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Chase Coleman (Trades, Portfolio) of Tiger Global Management and Mason Hawkins (Trades, Portfolio) of Southeastern Asset Management both found two stocks within their portfolios worth growing this week. Southeastern Asset Management seeks deeply discounted but good businesses for its portfolio, which contains 33 stocks and is valued at $20.4 billion. Tiger Global Management is also a fundamental-based firm but which also invests according to long-term sector trends. Its long equity portfolio holds 61 stocks with a combined value of $8 billion.

This week, Southeastern Asset Management bought more shares of its holding Consol Energy Inc. (CNX), and Chase Coleman (Trades, Portfolio)’s Tiger Global increased its stake in dElia’s Inc. (DLIA).

Consol Energy (CNX)

Southeastern increased its Consol Energy stake by 1.74% as of Feb. 28, when the price closed at $40.10 per share. The buy increased Southeastern’s stake from 22,691,279 shares to 23,086,745 shares, equal to 10.1% of the company, and 4.2% of its shares outstanding.

This was the second purchase of Consol Energy by Southeastern recently. It had increased its stake by 1.93% on Feb. 10.

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Pittsburgh-based CONSOL energy is a natural gas and coal company that operates primarily in the shale of the Appalachian basin. It has a market cap of $9.15 billion and its share price lifted almost 5% year to date.

Hawkins commented on the stock in his third quarter 2013 investor letter:

“Other strong performers in the quarter included Level 3, up 27%, and CONSOL Energy (CNX), up 25%... Brett Harvey, CEO at CONSOL indicated that management is exploring the sale of assets and could potentially split the company into various parts: natural gas, coal, and infrastructure. Even with meaningful recent stock gains, both companies remain among our most discounted names.”

In January, Consol reported new records in its quarterly and annual production rates, and said it plans to increase production in 2014. On the coal side, it expects to complete three major projects by early 2014.

Consol Energy’s shares are traded at around $39.96 on Friday, near a two-year high, with a P/E ratio of 126.60, near a one-year low, and P/S ratio of 2.80, near a five-year high. The dividend yield of Consol Energy stocks is 1.10%. Consol Energy had an annual average earnings growth of 12.30% over the past 10 years. GuruFocus rated Consol Energy the business predictability rank of 2.5-star.

dElia’s Inc. (DLIA)

Tiger Global increased its stake in dElia’s by 31.74%, building it up to 4,469,875 share, equal to 13.61% of the company, on March 6. That day, the stock’s price closed at $1.10 per share. Year to date, its price has soared almost 40%.

Tiger Global originally bought the stock in the fourth quarter, buying 3.4 billion shares.

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dElia’s is a retail company marketing to teenage girls through stores in the mall, direct mail catalogs and its website.

Coleman also bought shares of the company on the same day the company released its preliminary fourth quarter financial results. dElia’s said it expects its total revenue for the quarter to decrease by 34.2% to $35.4 million, with a gross margin between 7.0% and 8.0%, compared to 29.6% in the prior-year quarter. Its total loss from continuing operations is projected to fall between $17.0 million and $18.0 million. The company ended 2013 with $3.2 million in cash and $14.5 million in borrowings in its revolving credit facility.

The company’s leader, CEO Tracy Gardner, said in the statement that the company is aiming to execute a turnaround whose effects have not been felt yet: "We remain in the early stages of our turnaround and we believe the headwinds that continue to pressure the retail industry hampered our progress in the fourth quarter. That said, we continued to make progress in executing on key initiatives that we believe will drive improved performance in our business longer term.”

Delia*s Inc. has a market cap of $85.0 million; its shares are trading Friday around $1.23 with and P/S ratio of 0.20. Delia*s had an annual average earnings growth of 9.30% over the past five years.

These buys were reported using GuruFocus Real Time Picks, which is a Premium Member feature only. Not a Premium Member of GuruFocus?Try it free for 7 days here!


Rating: 4.5/5 (2 votes)

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