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A Look at Van Den Berg's Top Five Stocks

July 09, 2014 | About:
Monica Wolfe

Monica Wolfe

119 followers
Arnold Van Den Berg is the founder of Austin-based Century Management. He and his team seek companies that are trading at discounts to their intrinsic value either because they are lesser known, have a short-term problem or are temporarily out of favor.

As of the close of the second quarter, Century Management held 78 stocks valued at $1.140 billion. The guru bought nine new stocks during the second quarter for a quarter-over-quarter turnover of 13%. The following five companies are the five largest stock positions held by Century Management as of the close of the second quarter.

Berkshire Hathaway (BRK.B)

Van Den Berg’s largest position is in Berkshire Hathaway. The guru holds on to 373,026 shares, representing 0.02% of the company’s shares outstanding and 4.1% of his total portfolio.

The guru decreased his position in Berkshire Hathaway -0.86% over the duration of the first quarter. Van Den Berg sold 3,224 shares in the second quarter price range of $121.70 to $129.06, with an estimated average price of $126.57. Since then the share price has increased approximately 1.6%.

Van Den Berg’s holding history as of the second quarter:

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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 Hathaway reports that the company’s price is near a 10-year high, its P/S ratio is near a 5-year high and over the past three years the company has issued $4.9 billion of debt. The analysis also notes that the company has shown predictable revenue and earnings growth, its operating margin is expanding and its P/B ratio is trading at near a 1-year low.

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

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Berkshire Hathaway has a market cap of $299.97 billion. Its shares are currently trading at around $128.31 with a P/E ratio of 15.60, a P/S ratio of 1.60 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 Berkshire Hathaway the business predictability rank of 3-star.

Jacobs Engineering Group (JEC)

Van Den Berg’s second largest position is in Jacobs Engineering where the guru holds on to 847,473 shares. His position in the company represents 0.64% of the company’s shares outstanding and 4% of his total portfolio.

During the second quarter Van Den Berg reduced his position by -0.97%. The guru sold a total of 40,674 shares in the first quarter price range of $52.92 to $64.62, with an estimated average price of $57.62. The price per share has decreased about -7.4% since then.

Van Den Berg’s historical holding history:

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Jacobs Engineering is a professional services firm in the U.S. Its business focuses on providing a range of technical, professional and construction services to a large number of industrial, commercial and governmental clients around the world.

Jacobs Engineering’s historical revenue and net income:

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The analysis on Jacobs Engineering reports that the company’s Piotroski F-Score is low, its operating margin is expanding and it’s P/E and P/B ratios are trading at near historic lows.

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

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Jacobs Engineering has a market cap of $7.08 billion. Its shares are currently trading at around $53.55 with a P/E ratio of 17.70, a P/S ratio of 0.60 and a P/B ratio of 1.60. The company had an annual average earnings growth of 12% over the past ten years.

Wells Fargo & Co. (WFC)

Van Den Berg’s fifth largest position is in Wells Fargo. The guru holds on to 847,473shares, representing 0.02% of the company’s shares outstanding and 4% of his total portfolio.

The guru decreased his position in Wells Fargo -0.99% over the duration of the first quarter. Van Den Berg sold 8,575 shares in the first quarter price range of $47.71 to $52.98, with an estimated average price of $50.23. Since then the share price has increased approximately 4%.

Van Den Berg’s holding history as 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 revenue has been in decline over the past five years, its operating margin is expanding and its dividend yield is close to a 3-year high. The analysis also notes that the company’s price is sitting near its 10-year high.

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

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Wells Fargo has a market cap of $274.36 billion. Its shares were traded at around $52.09 with a P/E ratio of 13.00, a P/S ratio of 3.40 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 4.20% over the past ten years.

Corning Inc (GLW)

The guru’s fourth largest position is in Corning. The guru holds on to 1,965,378 shares, representing 0.13% of the company’s shares outstanding and 3.8% of his total portfolio.

During the second quarter Van Den Berg reduced his position -31.7% by selling a total of 912,015 shares. He sold these shares in the second quarter price range of $20.38 to $22.08, with an estimated average price of $21.20. The price per share has jumped up approximately 3.5% since then.

Van Den Berg’s holding history as of the second quarter:

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Corning is a provider of high-performance glass, optical fiber and cable and hardware and equipment products, ceramic substrates, laboratory products and specialized polymer products, advanced optical materials and other technologies.

Corning’s historical revenue and net income:

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The analysis on Corning reports that the company’s revenue has slowed down over the past year, its dividend yield is close to a 2-year low and its Piotroski F-Score is high, indicating a healthy situation.

The Peter Lynch Chart suggests that Corning is currently overvalued:

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Corning has a market cap of $28.85 billion. Its shares are currently trading at around $28.85 with a P/E ratio of 22.05, a P/S ratio of 3.80 and a P/B ratio of 1.50. The company had an annual average earnings growth of 2.50% over the past five years.

Cisco Systems (CSCO)

The guru’s fifth largest holding is in Cisco Systems where he maintains 1,636,589 shares of the company’s stock. This position makes up for 0.03% of the company’s shares outstanding as well as 3.6% of the guru’s portfolio.

Over the past quarter Van Den Berg reduced his holdings -1.11% by selling 18,422 shares of the company’s stock. He sold these shares near the estimated average quarterly price of $23.82 per share. Since then the price per share has increased approximately 5.2%.

The guru’s historical holding history:

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Cisco sells networking and communications products and provides related services. The company's two main products are switches and routers (devices that manage network traffic within local-area networks and between different networks), but Cisco essentially touches everything in the networking industry, from security to storage to application switching.

Cisco’s historical revenue and net income:

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The analysis on Cisco reports that the company’s revenue per share has slowed down over the past year, the price is sitting near a 5-year high and its dividend yield is near a 5-year high.

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

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Cisco Systems has a market cap of $130.22 billion. Its shares were trading at around $25.42 with a P/E ratio of 17.20 and a P/S ratio of 2.9000… The company’s dividend yield is at 2.80%, and they had an annual average earnings growth of 9.30% over the past ten years.

GuruFocus rated Cisco the business predictability rank of 3.5-star.

Check out Arnold Van Den Berg (Trades, Portfolio)’s entire second quarter portfolio here.

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