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Donald Smith's Largest Second Quarter Holdings

August 22, 2014 | About:
Monica Wolfe

Monica Wolfe

133 followers

Donald Smith (Trades, Portfolio) is the President and Chief Investment Officer at Donald Smith (Trades, Portfolio) & Co., a discipline-based value investing fund. The fund’s website boasts that that they are a “deep-value manager employing a strict bottom-up approach.” Donald Smith (Trades, Portfolio) & Co.’s investment team seeks out-of-favor companies that are valued in the bottom decile of price-to-tangible book value ratios.

The guru recently released his portfolio holdings for the quarter ended June 30, 2014. These holdings consisted of 75 stocks, with four being new buys from the quarter, valued at $5.34 billion. The following five stocks are Donald Smith (Trades, Portfolio)’s top five holdings as of the close of the second quarter.

Micron Technology (MU)

The guru’s largest holding as of the close of the second quarter was in Micron Technology where he maintains 18,691,359 shares of the company’s stock. This position makes up for 11.5% of his entire portfolio as well as 1.76% of the company’s shares outstanding.

Donald Smith (Trades, Portfolio) decreased his holdings -7.56% over the past quarter by selling a total of 1,528,187 shares of the company’s stock. He sold these shares in the quarterly price range of $21.18 to $33.98, with an estimated average quarterly price of $28.17 per share. Since then the price per share has increased approximately 21.7%.

Smith’s historical holding history:

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Micron Technology is global manufacturer and marketer of semiconductor devices, principally NAND Flash, DRAM and NOR Flash memory, as well as other innovative memory technologies, packaging solutions and semiconductor systems for use in leading-edge computing, consumer, networking, automotive, industrial, embedded and mobile products.

Micron Technology’s historical revenue and net income:

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The analysis on Micron Technology reports that the company has issued $602 million of debt over the past three years, its price is near a 10-year high, and its asset growth is faster than its revenue growth. The analysis also reports that the company has shown predictable revenue and earnings growth and that its Piotroski F-Score is high.

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

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Micron Technology has a market cap of $35.62 billion. Its shares are currently trading at around $33.26 with a P/E ratio of 10.90, a P/S ratio of 2.60 and a P/B ratio of 3.40. The company had an annual average earnings growth of 1.60% over the past ten years.

GuruFocus rated Micron Technology the business predictability rank of 3-star.

AerCap Holdings NV (AER)

Smith’s second largest position is in AerCap Holdings where he holds on to 8,595,356 shares of the company’s stock. This position makes up for 7.4% of Smith’s holdings as well as 7.55% of the company’s shares outstanding.

During the second quarter the guru reduced his position -6.28% by selling 576,360 shares of the company’s stock. He sold these shares in the quarterly price range of $38.91 to $48.03, with an estimated average quarterly price of $44.22 per share. Since then the price per share is up approximately 11.3%.

Smith’s holding history as of the close of the second quarter:

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AerCap Holdings is an integrated global aviation company, conducting aircraft leasing and trading aircraft. It also provides aircraft management services to other owners of aircraft. It operates its business on a global basis, providing aircraft, engines and parts to customers.

AerCap Holdings’ historical revenue and net income:

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The analysis on AerCap Holdings reports that the company’s price is near a 10-year high, its revenue per share has been in decline over the past year, and the company has issued $365.61 million of debt over the past three years. The analysis also notes that the company’s operating margin is expanding.

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

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AerCap Holdings has a market cap of $10.43 billion. Its shares are currently trading at around $49.13 with a P/E ratio of 20.10, a P/S ratio of 3.90 and a P/B ratio of 2.20. The company had an annual average earnings growth of 1.90% over the past five years.

WPX Energy (WPX)

Donald Smith (Trades, Portfolio)’s third largest holding comes from WPX Energy where he maintains 12,640,948 shares of the company’s stock. This position represents 5.7% of his total portfolio as well as 6.25% of the company’s shares outstanding.

Over the past quarter the guru decreased his stake a minor -1.43% by selling 182,892 shares. The guru sold these shares in the quarterly price range of $18.16 to $24.05, with an estimated average quarterly price of $21.22 per share. From this average price the price per share is now trading up approximately 16.9%.

Donald Smith (Trades, Portfolio)’s historical holding history:

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WPX Energy is an independent natural gas and oil exploration and production company engaged in the exploitation and development of long-life unconventional properties.

WPX Energy’s historical revenue and net income:

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The analysis on WPX Energy reports that the company has issued $2.1 billion of debt over the past three years, its price is near a 3-year high, and its P/B and P/S ratios are also trading near historical highs.

There are currently nine gurus holding a position in WPX Energy. Check out their holding histories here.

WPX Energy has a market cap of $5.03 billion. Its shares are currently trading at around $24.80 with a P/S ratio of 1.60 and a P/B ratio of 1.20.

XL Group PLC (XL)

The guru’s fourth largest position is in XL Group where he holds on to 7,619,232 shares of the company’s stock. This position makes up for 4.7% of Smith’s total portfolio and 2.81% of XL Group’s shares outstanding.

Over the past quarter the guru cut his stake a minor -0.09% by selling 6,918 shares of the company’s stock. He sold these shares in the quarterly price range of $30.67 to $34.20, with an estimated average quarterly price of $32.05 per share. Since then the price per share has increased about 4.3%.

Smith’s holding history of XL Group as of the close of the second quarter:

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XL Group, through its subsidiaries, is an insurance and reinsurance company providing property, casualty and specialty products to industrial, commercial and professional firms, insurance companies and other enterprises.

XL Group’s historical revenue and net income:

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The analysis on XL Group reports that the company’s price is near a 5-year high, the P/B ratio is near a 1-year low, and the P/S ratio is near a 5-year high.

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

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XL Group has a market cap of $8.87 billion. Its shares are currently trading at around $33.42 with a P/E ratio of 23.40, a P/S ratio of 1.30 and a P/B ratio of 0.90. The dividend yield of XL Group stocks is currently at 1.80%.

Air France-KLM (AFLYY)

The guru’s fifth largest holding goes to Air France-KLM. The guru holds on to 18,862,360 shares of the company’s stock, representing 4.4% of his total portfolio as well as 6.37% of Air France’s shares outstanding.

Over the duration of the second quarter Smith reduced his holdings -0.91% by selling 173,702 shares of the company’s stock. He sold these shares in the quarterly price range of $12.76 to $16.13, with an estimated average quarterly price of $14.78 per share. Since his buy the price per share is down approximately -29.8%.

Smith’s historical holding history:

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Air France-KLM is the result of the merger between Air France and KLM. It provides passenger transportation services on scheduled flights. It operates through Passenger, Cargo, Maintenance, and Other segments.

Air France-KLM’s historical revenue and net income:

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The analysis on Air France-KLM reports that the company’s Piotroski F-Score is low, indicating poor business operation, and that the company’s revenue per share has slowed down over the past year.

Air France-KLM has a market cap of $3.07 billion. Its shares are currently trading at around $10.38 with a P/S ratio of 0.10 and a P/B ratio of 2.20.

Check out Donald Smith (Trades, Portfolio)’s complete second quarter portfolio here.

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