GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

Howard Marks' Top Five of the Second Quarter

August 12, 2014 | About:
Monica Wolfe

Monica Wolfe

127 followers
Howard Marks (Trades, Portfolio), the chairman of Oaktree, reported its second quarter holdings earlier today. Marks has been responsible for the investing philosophy and direction of Oaktree since its formation in 1995. Oaktree provides investment management within a limited number of specialized niche markets where we believe the potential for reward outweighs the risk entailed. All of its investment activities operate according to the unifying philosophy that follows: the primacy of risk control, emphasis on consistency, the importance of market inefficiency, etc.

Marks’ second quarter holdings reported seven new holdings, bringing its total to 71 stocks valued at over $5.74 billion. The following five stocks represent Howard Marks (Trades, Portfolio)’ top five holdings as of the close of the second quarter.

EXCO Resources (XCO)

Howard Marks (Trades, Portfolio)’ largest holding of the quarter goes to EXCO Resources where he maintains 45,173,683 shares of the company’s stock. This position makes up for 4.6% of the guru’s total holdings as well as 16.56% of the company’s shares outstanding.

Marks did not alter his position over the past quarter. But since his last buy in the first quarter of 2014 the price per share has fallen -12.6%, and from the estimated average quarterly price of the second quarter the price has fallen an additional -20.7%.

Marks’ historical holding history:

1407868244006.png

EXCO Resources is an independent oil and natural gas company engaged in the exploration, exploitation, development and production of onshore North American oil and natural gas properties with a focus on shale resource plays.

EXCO Resources’ historical revenue and net income:

1407868394698.png

The analysis on EXCO Resources reports that the company’s dividend yield is near a 5-year high, its price is near a 10-year low and its P/S ratio is near a 5-year low. The analysis also notes that the company’s payout ratio may be too high, meaning that its dividend might not be sustainable.

EXCO Resources has a market cap of $1.22 billion. Its shares are currently trading at around $4.46 with a P/S ratio of 1.60 and a P/B ratio of 3.10. The dividend yield of EXCO Resources is currently at 4.40%.

Dynegy Inc (DYN)

The guru’s second largest holding is in Dynegy where he holds on to 6,940,100 shares of the company’s stock. This holding represents 4.2% of his total portfolio holdings as well as 6.92% of the company’s shares outstanding.

During the second quarter Marks decreased his holdings -15.84% by selling a total of 1,305,886 shares. He sold these shares in the quarterly price range of $24.80 to $36.14, with an estimated average quarterly price of $30.83. Since then the price per share has fallen approximately -9.9%.

Marks’ holding history as of the close of Q2:

1407868685051.png

Dynegy is holding companies and conducts all of its business operations through its subsidiaries. The company's business operations are the power generation sector of the energy industry. It now manages its generation assets by fuel type with two main reportable segments: the Coal segment &the Gas Segment.

Dynegy’s historical revenue and net income:

1407868772003.png

The analysis on Dynegy reports that the company has issued $222 million of debt over the past three years, its P/S ratio is near a 2-year low, and it has had operating loss over the past 3 years.

Dynegy has a market cap of $2.77 billion. Its shares are currently trading at around $27.62 with a P/S ratio of 1.30 and a P/B ratio of 1.40.

First BanCorp (FBP)

Marks’ third largest holding goes to First BanCorp where he holds on to a total of 41,843,581 shares of the company’s stock. This position makes up for 4% of his total assets managed as well as 20% of First BanCorp’s shares outstanding.

The guru did not alter his holdings in the company over the past quarter. In fact the last change the guru made in this position was in the third quarter of 2013 when he made a reduction in holdings. Since that sell the price per share has dropped -30%, but since his initial buy in the fourth quarter of 2011 the price per share is up 45.2%.

Marks’ historical holding history:

1407869152140.png

The company is a provider of financial services and products with operations in Puerto Rico, the United States and the US and British Virgin Islands. It provides a range of financial services for retail, commercial and institutional clients.

First BanCorp’s historical revenue and net income:

1407869323562.png

The analysis on First BanCorp reports that the company’s P/B and P/S ratios are near 1-year lows, its revenue per share has been in decline over the past five years and its Piotroski F-Score is low – indicating poor business operation.

First BanCorp has a market cap of $1.04 billion. Its shares are currently trading at around $4.95 with a P/S ratio of 2.00 and a P/B ratio of 0.80.

Masonite International (DOOR)

Marks’ fourth largest holding is in Masonite International where he maintains 3,621,363 shares. This position makes up for 3.5% of his total assets managed as well as 12.31% of the company’s shares outstanding.

Over the past quarter the guru cut his holdings -11.38% by selling 465,009 shares of the company’s stock. He sold these shares in the quarterly price range of $49.76 to $58.77 with an estimated average quarterly price of $54.37 per share. Since then the price per share has increased a slight 0.2%.

Marks’ historical holdings as of the close of Q2:

1407873416512.png

As of the most recent update there are five gurus that hold a position in Masonite International. Check out their holdings here.

Masonite’s historical revenue and net income:

1407873718991.png

The analysis on Masonite International reports that the company’s revenue per share has been in decline over the past year, its price is near a 2-year high and its inventory has been building up.

Masonite International has a market cap of $1.62 billion. Its shares are currently trading at around $54.43 with a P/S ratio of 0.90 and a P/B ratio of 2.00.

Ally Financial (ALLY)

Howard Marks (Trades, Portfolio)’ fifth largest position is in Ally Financial where he holds on to 7,993,230 shares of the company’s stock. This position represents 3.3% of his total portfolio as well as 1.67% of the company’s shares outstanding.

This holding was a new buy over the past quarter. The guru added all 7,993,230 shares in the second quarter price range of $23.46 to $27.90 per share. The estimated average quarterly price of the second quarter was $24.29 per share and the price per share has dropped -5.5% since then.

Marks’ historical holding history of ALLY:

1407874668314.png

Ally Financial Inc. is an independent financial services firm which provides financial products and services to automotive dealers and their customers.

Ally Financial’s historical revenue and net income:

1407875168321.png

The analysis on Ally Financial reports that the company’s Piotroski F-Score is low, its cash flow from operations has severe divergence from the reported net income, and its P/B ratio is near a 1-year low.

Ally Financial has a market cap of $11.03 billion. Its shares are currently trading at around $22.99 with a P/S ratio of 1.90 and a P/B ratio of 0.80.

Check out Marks’ complete second quarter holdings here.

Try a free 7-day premium membership trial here.


Rating: 5.0/5 (1 vote)

Voters:

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK