Howard Marks (Trades, Portfolio) of Oaktree Capital Management LP currently owns 78 stocks in his portfolio with a quarter-over-quarter turnover rate of 6%.
Howard's favorite stocks come from the ETF, options, preferred sector, which makes up 47.3% of his overall portfolio. Next is the financial services sector, making up 10.9% of his portfolio and third is industrials, which makes up 9.5% of his portfolio.
"On the other hand –Â and in investing, there's always another hand –Â high levels of confidence, complacency and composure on the part of investors have in good measure given way to disarray and doubt, making markets much more to our liking, " Marks has said.
The top four most heavily weighted stocks include: Star Bulk Carriers Corp. (SBLK, Financial), Dynegy Inc (DYN, Financial), First BanCorp (FBF, Financial) and Ally Financial Inc. (ALLY, Financial).
Star Bulk Carriers Corp, part of the transportation and logistics industry, is 9.4% of the portfolio's overall weight.
Since the third quarter of 2013, Marks purchased a total of 51,234,231 shares, valued at $564.6 million, at an average price of $11.95/share. Increasing in this position has ultimately left Marks with a 65% overall loss.
The company was incorporated in 2006 and provides transportation of drybulk commodities through its vessel-owning subsidiaries for customers.
According to Lynch's chart above, this stock is worth $3.50 and is currently priced at $4.05, meaning the stock is overvalued.
As of today, SBLK's P/S ratio is 1.59 and is ranked higher than 68% One warning sign, however, is that revenue has been in a steady decline in the past five years. The company's P/B ratio is 0.37, which is close to the 1-year low.
Dynegy Inc, which is part of the utilitites-independent power prodicers industry, makes up 3.8% of the overall portfolio.
Since 2012, Marks purchased 9,234,464 shares of DYN at an aaverage price of $20.11/share, resulting in a 45% gain. Marks sold 1,305,886 shares at an average price of $30.83/share, which resulted in a 6% loss. Marks now owns 7,928,800 shares, valued at $228.8 million.
According to the chart above, Lynch values this stock at $1.50 and the current price is $29.12, meaning this stock is overvalued.
As of today, DYN's market cap is $3.58 billion, its P/S ratio is 1.27 and close to the 2-year low of 1.23. The company's P/B ratio is 1.43.
3.3% of Marks' portfolio consists of shares from First BanCorp, which is part of the banking industry.
During the fourth quarter of 2011, Marks purchased 50,684,485 shares of FBP at an average price of $3.41/share, resulting in a 60% gain. During the third quarter of 2013, he sold 8,840,904 shares at an average price of $7.07/share, which left him with a 23% loss. He nows owns a total of 41,843,581 shares, valued at $198.8 million.
According to Lynch, this stock is worth $5.30 and is currently selling at $5.49, meaning the stock is slightly overvalued.
As of today, Frist BanCorp's market cap is at $1.165 billion. Its P/E ratio is 14.70, P/B ratio is 0.90 and P/S ratio is 1.97. One thing investors should be aware of is that the company's revenue has been declining over the past five years.
Ally Financial Inc, which is also part of the banking industry, makes up 3.2% of Marks' overall portfolio.
Marks first acquired this position during the second quarter of 2014. He now owns 8,256,030 shares, which were purchased at an average price of $24.28/share. The stock's value in his portfolio is $191.0 million.
According to Lynch, this stock should cost $33.50, but the current price is $20.68, which means this stock is undervalued.
Ally Financial's market cap is currently $9.913 billion, the P/E ratio is 24.86, P/B ratio is 0.71 and P/S ratio is 1.42, which is close to the one-year low of 1.40.
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