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Davis Selected Advisers Chris Davis' Top Five Holdings for the First Quarter

May 13, 2014 | About:
Monica Wolfe

Monica Wolfe

131 followers
Over the past quarter Chris Davis of Davis Selected Advisers reported a total portfolio of 184 stocks valued at $36.324 billion. The guru purchased 11 new stocks over the quarter.

The Davis Funds select their stocks based on the types of businesses that they would want to own. Their criterion includes companies with proven management and durable, financially strong business models as well as companies with sustainable competitive advantages.

The following five companies represent Chris Davis’ top five stock positions:

Wells Fargo & Co (WFC)

Chris Davis’ largest position is in Wells Fargo where he currently owns 51,060,078 shares. His holdings make up for 7% of his total portfolio and 0.96% of Wells Fargo’s shares outstanding.

During the first quarter Davis decreased his holdings -11.26% by selling 6,481,392 shares of the company’s stake. He sold these shares in the quarterly price range of $44.23 to $49.74, with an estimated average quarterly price of $46.58. Since then the price per share is up 7%.

Davis’ holding history as of the close of the first 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 $262.35 billion. Its shares were traded at around $49.81 with a P/E ratio of 12.70, a P/S ratio of 3.20 and a P/B ratio of 1.60. The company offers a dividend yield of 2.50%. Wells Fargo had an annual average earnings growth of 4.60% over the past ten years.

Bank of New York Mellon Corp (BK)

The guru’s second largest holding is in Bank of New York Mellon Corp where he maintains 71,031,905 shares of the company’s stock. Davis’ position makes up for 6.9% of his total portfolio as well as 6.17% of the company’s shares outstanding.

During the first quarter Davis reduced his holdings -14.75% by selling 12,291,333 shares. He sold these shares near the first quarter estimated average quarterly price of $33.03 per share. Since then the price per share has increased approximately 5.2%.

Davis’ historical holding history:

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The company is a global financial services company. Bank of New York Mellon provides a comprehensive array of services that enable institutions and individuals to manage and service their financial assets in more than 100 markets worldwide.

Bank of New York Mellon’s historical revenue and net income:

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The analysis on BK reports that the company’s dividend yield is at a two-year low, its price is nearing a three-year high, they have issued $3.2 billion of debt over the past three years and the company’s interest coverage is comfortable.

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

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Bank of New York Mellon Corp has a market cap of $39.57 billion. Its shares are currently trading at around $34.86 with a P/E ratio of 19.80, a P/S ratio of 2.70 and a P/B ratio of 1.10.

American Express (AXP)

Davis’s third largest position is in American Express where he holds on to a total of 27,936,377 shares of the company’s stock. His holdings make up for 6.9% of his total holdings and 2.59% of the company’s shares outstanding.

During the past quarter Davis made a reduction of his holdings. The guru reduced his position -21.9% by selling 7,831,464 shares. He sold these shares in the quarterly price range of $82.86 to $93.86, with an estimated average quarterly price of $89.33. Since then the price per share has decreased approximately -0.3%.

Davis’ historical holding history:

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American Express together with its subsidiaries is a global service company that provides customers with access to products, insights and experiences that enrich lives and build business success. Its principal products and services are charge and credit payment card products.

American Express’s historical revenue and net income:

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The analysis on American Express reports that the company’s dividend yield is near a 5-year low, its price is sitting near a 10-year high and its operating margin is expanding. It also reports that American Express has shown predictable revenue and earnings growth.

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

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American Express has a market cap of $94.31 billion. Its shares are currently trading at around $89.09 with a P/E ratio of 18.30, a P/S ratio of 2.90 and a P/B ratio of 5.00. The company had an annual average earnings growth of 6.90% over the past ten years.

GuruFocus rated American Express the business predictability rank of 2-star.

Berkshire Hathaway (BRK.A)

The guru’s fourth largest holding is in Berkshire Hathaway where he maintains 8,546 shares of the company’s stock. This position makes up for 4.4% of his total holdings and 0.52% of the company’s shares outstanding.

During the first quarter, Davis decreased his holdings -10.84% by selling 1,039 shares of Berkshire stock. He sold these shares around the estimated average quarterly price of $175515.25 per share. Since then the price per share has increased an additional 9.3%.

Davis’s historical holding history:

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Berkshire Hathaway is a holding company owning subsidiaries engaged in a number of diverse 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 reports that the company’s price is at 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 overvalued:

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Berkshire Hathaway has a market cap of $313.92 billion. Its shares are currently trading at around $191826 with a P/E ratio of 15.60, a P/S ratio of 1.70 and a P/B ratio of 1.30. The company had an annual average earnings growth of 9.30% over the past ten years.

GuruFocus rated the company the business predictability rank of 3-star.

Costco Wholesale (COST)

Chris Davis (Trades, Portfolio)’s fifth largest holding is in Costco where he maintains a total of 11,535,342 shares of the company’s stock. This position makes up for 3.5% of his total portfolio and 2.53% of the company’s shares outstanding.

Over the past quarter Davis reduced his holdings -8.9% by selling 1,127,576 shares. He sold these shares near the estimated average quarterly price of $114.39 per share. Since then the price per share has increased approximately 1.7%.

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Costco operates membership warehouses based on the concept that offering its members low prices on a limited selection of nationally branded and private-label products in a wide range of merchandise categories will produce high sales volumes and rapid inventory turnover.

Costco’s historical revenue and net income:

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

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

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Check out Chris Davis’ complete portfolio holdings here.

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