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Bill Nygren's Low-P/E Stocks

June 20, 2014 | About:
Holly LaFon

Holly LaFon

257 followers
Discount to intrinsic value is a central component of Bill Nygren (Trades, Portfolio)’s investing strategy at Oakmark Funds, where he has a track record of beating indices. In a recent interview with Barrons, he stated the key to his success:

“We bring a private-equity perspective to public-equity investing. By that, I man we take the very long-term time horizon that private equity firms typically take, and try to anticipate how investors might view a company differently five years from now. We are very, very long-term investors and being able to buy a great business at an average price is just as much value investing as buying an average business at a great price.”

Nygren’s portfolio currently contains plenty of low-P/E stocks. The lowest are: Apple Inc. (AAPL), AIG (AIG), Aflac Inc. (AFL) and Union Pacific Corp. (UNP).

Apple (AAPL)

Nygren owns 1,757,000 shares of Apple, after adding 140,000 in the first quarter. His average share price was $65 and he has an approximate 41% gain on the position.


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Apple’s P/E: 2.20

Apple Inc. is a California corporation established in 1977. Apple Inc has a market cap of $553.89 billion; its shares were traded at around $91.86 with a P/E ratio of 2.20 and P/S ratio of 3.30. The dividend yield of Apple Inc stocks is 1.90%. Apple Inc had an annual average earnings growth of 63.60% over the past 10 years. GuruFocus rated Apple Inc the business predictability rank of 4.5-star.

AIG (AIG)

Nygren holds 5,495,000 shares of AIG after increasing the position by 200,000 shares in the first quarter. Overall, he has a gain of 67% on his approximate average share price of $50.

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AIG’s P/E: 9.6

American International Group Inc., a Delaware corporation, is a holding company which, through its subsidiaries, is engaged in a range of insurance and insurance-related activities in the United States and abroad. American International Group Inc. has a market cap of $80.58 billion; its shares were traded at around $55.70 with a P/E ratio of 9.60 and P/S ratio of 1.20. The dividend yield of American International Group Inc stocks is 0.80%.

Aflac (AFL)

Nygren holds a total of 3.21 million Aflac shares, and has not added to the position since second quarter 2013. With his average buy price of $47, he has an approximate 33% gain on the holding.

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Aflac Inc. was incorporated in 1973 under the laws of the state of Georgia. Aflac Inc has a market cap of $28.53 billion; its shares were traded at around $62.82 with a P/E ratio of 9.70 and P/S ratio of 1.20. The dividend yield of Aflac Inc stocks is 2.30%. Aflac Inc. had an annual average earnings growth of 12.30% over the past 10 years. GuruFocus rated Aflac Inc. the business predictability rank of 4.5-star.

Union Pacific Corp. (UNP)

Nygren holds 1.7 million shares of Union Pacific Corp., which he bought in fourth quarter 2013. He has not bought or sold shares of the company since. His average buy price was $79, giving him an approximate gain of 28% on the holding.

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Union Pacific P/E: 10.2

Union Pacific Corp., a Utah corporation, was incorporated in 1969. Union Pacific Corp has a market cap of $91.52 billion; its shares were traded at around $101.03 with a P/E ratio of 10.20 and P/S ratio of 4.20. The dividend yield of Union Pacific Corp stocks is 2.90%. Union Pacific Corp had an annual average earnings growth of 16.50% over the past 10 years. GuruFocus rated Union Pacific Corp the business predictability rank of 5-star.

For more of Bill Nygren (Trades, Portfolio)’s low-P/E stocks, check out his portfolio here. Not a Premium Member of GuruFocus? Try it free for 7 days here!


Rating: 5.0/5 (1 vote)

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Comments

chompinchuck
Chompinchuck - 2 months ago

When you write the UNP has a PE of 10 it is just further proof that this is a page view motivated and rushed writing.

batman
Batman - 2 months ago

Apple's P/E ratio is not 2.2 but 15.27. Stock splits do not add to earnings. Earnings is not $42.07 but $6.01.The earnings yeild is not 45.46% but 6.55%. The dividend yeild is 2.05% not 14.35%.

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