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Scott Black's Top Second Quarter Stock Buys

August 19, 2014 | About:
Holly LaFon

Holly LaFon

278 followers
Founder and president of Delphi Management Inc. Scott Black (Trades, Portfolio) is a Graham-Dodd value investor who focuses in particular on management, contacting the heads of every company in which he invests. Black’s company also takes only long positions and holds only U.S.-based stocks.

Black attended Barron’s 2014 roundtable earlier in the year and provided an analysis of the market:

“Analysts' consensus estimate for 2014 S&P 500 earnings is $121.48, up 13.3%, year over year. That is ridiculous. My estimate is $116. At [its recent] close of 1842.37, the S&P was trading for 15.9 times expected earnings. Based on history, it is about fairly valued.”

As of the second quarter-end, Black has as his portfolio’s top-weighted sectors Consumer Cyclical (19.5%) and Technology (18.2%). He added 13 new stocks in the second quarter and holds a total of 109, valued at $686 million in total.

These are his five largest new buys.

KapStone Paper and Packaging Corp (KS)

Black purchased 275,883 shares of KapStone Paper and Packaging Corp, making the holding 1.3% of his portfolio. The stock’s price averaged $28 in the quarter.

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KapStone Paper and Packaging Corporation, formerly Stone Arcade Acquisition Corporation, was formed in Delaware as a special purpose acquisition corporation on April 15, 2005 for the purpose of effecting a merger, capital stock exchange, asset acquisition or other similar business combination with an unidentified operating business in the paper, packaging, forest products and related industries. Kapstone Paper And Packaging Corp has a market cap of $2.95 billion; its shares were traded at around $30.72 with a P/E ratio of 21.90 and P/S ratio of 2.66.

Super Micro Computer Inc. (SMCI)

Black bought 294,385 shares of Super Micro Computer Inc., for 1.1% of his portfolio. The average share price for the company was $21 in the second quarter.

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Super Micro Computer Inc. is engaged in server technology and green computing innovation. Super Micro Computer Inc. has a market cap of $1.17 billion; its shares were traded at around $26.02 with a P/E ratio of 25.60 and P/S ratio of 0.90. Super Micro Computer Inc. had an annual average earnings growth of 3.10% over the past five years.

Finish Line Inc. (FINL)

Black purchased 228,788 shares of Finish Line Inc., accounting for 0.99% of the portfolio. The stock’s price averaged $28 in the second quarter.

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Finish Line Inc. is an Indiana corporation. The company is a mall-based specialty retailer in the United States, and operates two retail divisions under the Finish Line brand name (Finish Line) and Running Specialty Group (Running Specialty). Finish Line Inc. has a market cap of $1.38 billion; its shares were traded at around $28.81 with a P/E ratio of 16.30 and P/S ratio of 0.80. The dividend yield of Finish Line Inc. stocks is 1.00%. Finish Line Inc. had an annual average earnings growth of 12.30% over the past five years.

DR Horton Inc. (DHI)

Black purchased 240,661 shares of DR Horton Inc., a 0.86% portfolio weight. The stock price averaged $23 in the quarter.

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DR Horton Inc. began its homebuilding business in 1978. DR Horton Inc. has a market cap of $7.93 billion; its shares were traded at around $21.76 with a P/E ratio of 15.10 and P/S ratio of 1.10. The dividend yield of DR Horton Inc. stocks is 0.60%.

For more Scott Black (Trades, Portfolio) stocks, visit his portfolio. Not a Premium Member of GuruFocus? Try it free for 7 days here.


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