The Real Time Picks section of GuruFocus is a great way to ideas from the investing gurus. We currently follow 147 guru portfolios. If a guru makes a purchase or sale of a company in which he or she owns a greater than 5 percent stake, SEC regulations require the trade to be reported within 10 days. Some of the gurus report their trades within 2 days. The type of filing can disclose whether the trade is a passive (Schedule 13G) or activist (Schedule 13D) holding. The link to the filing is available through the Real Time Picks section. The latest Real-Time Picks are from John Paulson, Ron Baron, Mario Gabelli and Dodge & Cox.
John Paulson of Paulson & Company initiated a new holding of 61,384,234 Class A shares of Overseas Shipholding Group (OSGIQ, Financial)on 08/31/2014, as reported in the latest 13G filings by John Paulson (Trades, Portfolio). The filing indicates that Paulson owns 56,425,082 shares of Class A common stock and 4,959,152 shares of common stock issuable upon exercise of Class A warrants. The investment gives Paulson a 19.35 percent stake in the company. OSG is a leading provider of global energy transportation services. It owns and operates a fleet of international and U.S. Flag vessels that transport crude oil, refined petroleum products and liquefied natural gas (LNG) worldwide. The company filed for Chapter 11 bankruptcy in November of 2012. On August 5, the emergence from bankruptcy was announced. Class B shares are now trading under the symbol, OGSRB, but the Class A shares are not shown as trading yet. Paulson most likely had an earlier investment in the company and received the new shares and warrants as part of the bankruptcy plan. It will be difficult to value the new company until its first post-bankruptcy financial statements are filed. I had left a message for investor relations but have not received a call back, yet. I was informed by a brokerage office that the current shares trading OTC are Class B shares.
Ron Baron of Baron Funds added 52.35 percent to his Manchester United PLC (MANU) holding at the average price of $17.06 on 08/31/2014, as reported in the latest SC filings by Ron Baron (Trades, Portfolio). He now owns 15,026,190 shares, representing 9.17 percent of the shares outstanding. Manchester United is one of the world’s most popular teams in the world’s most popular sport of soccer. It is the third most valuable sports franchise in the world behind Real Madrid and Barcelona and just ahead of the New York Yankees, according to the Forbes rankings released July 17. With an EPS of $1.28 over the past twelve months, earnings only have to grow at a rate of 6.9 percent, according to the GuruFocus DCF Calculator. Earnings can be volatile depending on the performance of the team. The team failed to qualify for the Champions League for the first time in 20 years. Missing out on the Champions league will materially affect the team’s 2015 revenues. Although I am not an avid follower of the team, it seems to be a temporary issue. If so, a further drop in price could be a buying opportunity.
Market Cap: 2.69 billion, P/E: 12.20
Business Predictability: Not Rated, Financial Strength: 7/10, Profitability & Growth: 6/10
Mario Gabelli of GAMCO Investors reduced his Handy & Harman Ltd (HNH) holding by 96.73 percent at the average price of $26.16 on 09/09/2014, as reported in the latest SC filings by Mario Gabelli (Trades, Portfolio). He now owns 16,090 shares, representing 0.12 percent of the shares outstanding. HNH is a diversified manufacturer of engineered niche industrial products. Its product segments are Joining Materials, Tubing, Building Materials, Arlon Electronic Materials, Kasco Blades and Route Repair Services. The company recently had a tender offer to buy back shares at $26. That price of the tender offer was increased from its previously announced price of $24 per share. Gabelli more than doubled his money since he began buying the stock in 2011 with an average buying price of $12.19 per share. The company has a low P/E ratio of 10.5 and would have to grow its earnings at a rate of 6.28 percent to justify its current price according to the GuruFocus DCF Calculator. According to the company’s second quarter earnings press release, earnings have increased 10.5 percent over the first six months of the year. A steady increase of earnings at 10.5 percent would value the stock at $34.90 with a 24 percent margin of safety.
Market Cap: 338.9 million, P/E: 10.50
Business Predictability: 1/5, Financial Strength: 5/10, Profitability & Growth: 7/10
Dodge & Cox added 9.38 percent to its NetApp Inc (NTAP) holding at the average price of $42.16 on 08/31/2014, as reported in the latest SC filings by Dodge & Cox. The firm now owns 32,525,040 shares, representing 10.5 percent of the shares outstanding. NetApp is a leading global provider of innovative storage and data management software, systems and services. Its storage solutions help customers create the flexible, efficient and highly available IT infrastructures they need to support their organizations. The stock is now trading below 5-year median ratios of P/E at 32.2, P/S at 2.8 and P/B at 4. The current ratios for P/E, P/S and P/B are 22.4, 2.3, and 3.6.
Market Cap: 13.58 billion, P/E: 22.40
Business Predictability: 3/5, Financial Strength: 6/10, Profitability & Growth: 9/10
Mario Gabelli of GAMCO Investors added 9.09 percent to his Pep Boys - Manny Moe & Jack (PBY) holding at the average price of $10.31 on 09/09/2014, as reported in the latest 13D filings by Mario Gabelli (Trades, Portfolio). He owns 6,161,999 shares, representing 11.57 percent of the shares outstanding. Pep Boys has been a place to shop and care for your car since it began operations in 1921. There are nearly 800 locations throughout the United States and Puerto Rico. The stores offer auto service, tires, parts and accessories. Earnings have been in a downward trend since 2011 and decreasing at an annual rate of 29.49 percent over the past five years. Its low P/B ratio of 1.00 can help support the stock, but earnings will need to increase again for the stock to gain any material value.
Market Cap: 532.6 million, P/E: 116.30
Business Predictability: 1/5, Financial Strength: 7/10, Profitability & Growth: 6/10
Following the Real Time Picks from the investing gurus is a great way to generate ideas. After gaining a familiarity with the gurus, you can customize your own list of gurus to follow. A great way to familiarize yourself with the different gurus is to go to the List of Gurus page, and there you will get a grid of the different gurus. Move the mouse cursor over the gurus’ names, and you will get a popup with brief information about the gurus that will include a profile and investing philosophy.
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