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