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Tom Gayner’s Top 5 New Portfolio Picks

August 11, 2014 | About:
Chris Mydlo

Chris Mydlo

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Tom Gayner, chief investment officer of Markel (MKL), is certainly a value investor. Markel is commonly referred to as a mini Berkshire. Gayner thinks of stock as a part of a business and the business is worth what the present value of the future cash flows are. “We operate with a Margin of Safety in the investment portfolio,” says Gayner. He also believes that he can earn the best returns by concentrating his focus and portfolio in promising areas where he has the best understanding and knowledge.

His stock portfolio, valued at $3.5 billion, contained 105 stocks as of the second quarter, in which he initiated 8 new positions. The top new stocks are: Deere & Co (DE), Aaron’s Inc (AAN), Rent-A-Center (RCII), CME Group Inc (CME) and Lab Corp of America (LH).

Deere & Co (DE)

Gayner purchased 190,000 shares of Deere, whose share price averaged $91.97 during the quarter. The position equates to 0.49 percent of the portfolio.

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Deere manufactures and distributes agriculture and turf, and construction and forestry equipment worldwide. The company has a market cap of $37.71 billion. The stock closed at $87.16 on Monday, August 11, with a P/E ratio of 9.50 and P/S ratio of 0.90. The dividend yield of Deere is 2.50 percent.

Aaron’s Inc (AAN)

Gayner purchased 125,000 shares of Aaron’s, whose share price averaged $32.18 during the quarter. The position equates to 0.13 percent of the portfolio.

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Aaron’s is a leading specialty retailer of consumer electronics, computers, residential furniture, household appliances and accessories. It engages in the lease ownership, lease and retail sale of a wide variety of products. The company has a market cap of $1.84 billion. The stock closed at $25.50 on Monday, August 11, with a P/E ratio of 20.80 and P/S ratio of 0.90. The dividend yield of Aaron’s is 0.3 percent.

Rent-A-Center Inc (RCII)

Gayner purchased 110,000 shares of Rent-A-Center, whose share price averaged $28.27 during the quarter. The position equates to 0.09 percent of the portfolio.

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Rent-A-Center is the largest rent-to-own operator in North America, focused on improving the quality of life for its customers by providing them the opportunity to obtain ownership of high-quality durable products, such as consumer electronics, appliance, computer, furniture and accessories, under flexible rental purchase agreements with no long-term obligation. The company has a market cap of $1.32 billion. The stock closed at $24.96 on Monday, August 11, with a P/E ratio of 15.50 and P/S ratio of 0.40. The dividend yield of Rent-A-Center is 3.6 percent.

CME Group Inc (CME)

Gayner purchased 24,000 shares of CME Group, whose share price averaged $70.38 during the quarter. The position equates to 0.05 percent of the portfolio.

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CME Group is a combination of the Chicago Mercantile Exchange, Chicago Board of Trade, NYMEX, COMEX, as well as other exchanges. The company has a market cap of $24.65 billion. The stock closed at $73.37 on Monday, August 11, with a P/E ratio of 25.60 and P/S ratio of 8.50. The dividend yield of CME Group is 2.5 percent.

Laboratory Corp of America Holdings (LH)

Gayner purchased 15,000 shares of Lab Corp of American, whose share price averaged $100.80 during the quarter. The position equates to 0.04 percent of the portfolio.

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Lab Corp is the second-largest independent clinical laboratory company in the United States based on 2013 net revenues. Its tests are used by the medical profession in core testing, patient diagnosis, and in the monitoring and treatment of disease. The company has a market cap of $8.73 billion. The stock closed at $102.85 on Monday, August 11, with a P/E ratio of 17.10 and P/S ratio of 1.60. Lab Corp does not pay a dividend.

See the rest of Tom Gayner (Trades, Portfolio)’s portfolio and latest stock picks here: Tom Gayner Stock Picks. Not a Premium Member of GuruFocus? Try it free for 7 days here!


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