Guru Chuck Royce (Trades, Portfolio), co-chief investment officer and portfolio manager of Royce Funds in New York, follows an investment philosophy that favors investing in smaller companies. “We are looking for what we believe are terrific stocks trading for less than our estimate of the company's worth as a business – its enterprise value,” he has said.
As is typical for him, Royce traded in literally hundreds of stocks in the fourth quarter, adding to existing stakes or buying new ones in 211 companies – and selling all or part of his stakes in more than 350 others.
Royce traded in all of the top 20 stakes in his portfolio in the fourth quarter. He added to his existing stakes in five of his top 20 holdings – Ritchie Bros Auctioneers Inc (RBA, Financial), Trustco Bank Corp N Y (TRST, Financial), Ascena Retail Group Inc (ASNA, Financial), National Instruments Corp (NATI, Financial) and Benchmark Electronics Inc (BHE, Financial). Those acquisitions had modest impacts on his portfolio.
The purchase that had the greatest influence on his portfolio was his addition of 765,064 shares to his existing stake in Anixter International Inc (AXE, Financial), an Illinois-based communications and security products company, for an average price of $84.58 per share. That purchase had a 0.24% impact on his portfolio.
Other gurus who own shares of Anixter are Ken Fisher (Trades, Portfolio), Third Avenue Management (Trades, Portfolio), Steven Cohen (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio), Murray Stahl (Trades, Portfolio), John Rogers (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio) and Jim Simons (Trades, Portfolio).
The acquisition that had the second-greatest influence on Royce’s portfolio was his purchase of 1,139,780 shares of Artisan Partners Asset Management Inc (APAM, Financial), a Milwaukee-based investment management firm, for an average price of $49.89 per share. That had a 0.2% impact on his portfolio.
Other gurus who own shares of Artisan Partners are Paul Tudor Jones (Trades, Portfolio), Ron Baron (Trades, Portfolio), Jim Simons (Trades, Portfolio) and Steven Cohen (Trades, Portfolio).
The purchase of a new stock that had the greatest impact on Royce’s portfolio was his acquisition of 1,911,784 shares of Avid Technology Inc (AVID, Financial), a hardware and software company based in Massachusetts, for an average price of $11.56 per share. The transaction had a 0.09% impact on his portfolio.
Other gurus who own shares of Avid are Arnold Van Den Berg (Trades, Portfolio), Private Capital (Trades, Portfolio) and Arnold Schneider (Trades, Portfolio).
Divestitures and reductions
The sales of his stakes in two companies – Sapient Corp (SAPE, Financial) and Strayer Education Inc (STRA, Financial) – each had a -0.14% impact on his portfolio.
Royce sold his 2,909,902-share stake in Sapient, a Boston-based marketing and consulting company, for an average price of $21.11 per share. He sold his 710,137-share stake in Strayer, an education services holding company that started as a small business college in Baltimore in the late 19th century, for an average price of $70.74 per share.
Gurus who own shares of Sapient are Mario Gabelli (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio), Jim Simons (Trades, Portfolio), Wallace Weitz (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio) and Steven Cohen (Trades, Portfolio). Gurus Ken Fisher (Trades, Portfolio) and John Hussman (Trades, Portfolio) also sold their stakes in Sapient in the fourth quarter.
Gurus who own shares of Strayer are Jim Simons (Trades, Portfolio) and Joel Greenblatt (Trades, Portfolio).
Royce parted with portions of his stakes in 15 of his top 20 companies – AVX Corp (AVX, Financial), Vishay Intertechnology Inc (VSH), Brocade Communications Systems Inc (BRCD), Federated Investors, Inc. (FII), Globe Specialty Metals Inc (GSM), Teradyne Inc (TER), Buckle, Inc. (BKE), Kennedy-Wilson Holdings Inc (KW), GrafTech International Ltd (GTI), MKS Instruments Inc (MKSI), Fairchild Semiconductor International Inc (FCS), Thor Industries Inc (THO), Gentex Corp (GNTX), Finish Line Inc (FINL) and Adtran Inc (ADTN).
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