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Weekly Guru Bargains Highlights: Wells Fargo & Company, USG Corp., JPMorgan Chase & Co., WellPoint Inc., J. Crew Group Inc.

July 15, 2008 | About:
10qk

Financials continue their struggle. Investors lost their confidence in Freddie Mac and Fannie Mae even as government tries to back up. The economic weather is volatile, are you still in the mode of buying Guru bargains: Wells Fargo & Company (WFC), USG Corp. (USG), JPMorgan Chase & Co. (JPM), WellPoint Inc. (WLP), J. Crew Group Inc. (JCG).

Wells Fargo & Company (WFC): Down 21% Since Ron Baron Bought In the First Quarter of 2008

Bank operator Wells Fargo & Company slimmed down their first quarter earnings from $0.66 per share in 2007 to $2 billion $0.60 per share in 2008, despite a $2 billion pre-tax provision for losses. By the end of 2008, Wells Fargo & Co plans to fully acquire Farmers State Bank of Fort Morgan in Colorado, which has $145 million in assets and $116 million in cash deposits. Last Thursday, the National Association of Realtors reported that the nation’s pending home sales declined 4.7%, although the number of new mortgage applications rose 7.5% in the first week of July. As of last week, home mortgage rates for 30-year-fixed is 6.43%, 15-year-fixed is 5.94%, and 1-year-ARMs is 7.24%.

Ron Baron bought more shares of Wells Fargo stock between $24.97 and $32.98. Warren Buffet kept his WFC holdings about the same, as George Soros increased his holdings. Other gurus also own shares in Wells Fargo & Company: Brian Rogers, Dodge & Cox, Ron Baron, Chris Davis, David Dreman, Kenneth Fisher, Tweedy Browne, Ruane Cunniff, NWQ Managers, Chuck Akre, Arnold Van Den Berg, Wallace Weitz, and Ken Heebner.

President & CEO, Director John G. Stump bought 1,550 shares on 5/15/08 at $28.93; EVP Julie M. White bought 2,000 shares on 6/27/08 at $24.26; and Chairman, Director Richard M. Kovacevich bought 40,398 shares on 6/6/08 at $26.05.

Wells Fargo & Company has a market cap of $75.96 billion; its shares were traded at around $20.5 with a P/E ratio of 9.89 and P/S ratio of 2.28. The dividend yield of Wells Fargo & Company stocks is 5.18%.

USG Corp. (USG): Down 29% Since George Soros Bought In the First Quarter of 2008

USG Corporation (USG) lost $45 million or $0.45 per share for the first quarter of 2008, compared to a profit of $41 million or $0.45 per share for 2007. Revenue dropped to $1.17 billion from $1.26 billion. The drywall and construction product company reassured investors, “Housing market continues to be challenging; new residential construction has shown signs of stabilizing.”

George Soros bought 11,319 shares between $31.25 and $38.25, while John Rogers sold out all his USG holdings. Bruce Berkowitz and Brian Rogers increased their USG holdings by 30% and 20%, respectively. Warren Buffet and other gurus, which includes Third Avenue Management, Martin Whitman, Ruane Cunnif, and Wallace Weitz, kept their holdings unchanged.

Director Judith A. Sprieser bought a total of 16,000 shares on 2/27/08 at $35.01, and 10% Owner Knauf Verwaltungsgesells Gebr. bought 289,900 shares on 1/16/08 at $31.38.

USG Corp. has a market cap of $2.42 billion; its shares were traded at around $24.39 with P/S ratio of 0.51.

JPMorgan Chase & Co. (JPM): Down 21% Since John Keeley Bought In the First Quarter of 2008

JPMorgan Chase & Co. (JPM) trimmed their quarterly profits by 49% to $2.4 billion or $0.68 per share, compared to $4.8 billion or $1.34 per share. The financial service company added $2.5 billion to their provisions for losses in the first quarter; currently, JP Morgan’s allowance for credit losses total $12.6 billion. Revenue also declined by 52% to $3.0 billion from $6.2 billion in the prior year.

John Keeley upped his JPMorgan holdings by 60% to 133,700 shares; he bought his shares at an average price of $41.80.

Other guru updates: Ken Heebner, Richard Snow, Ruane Cunniff, and Richard Pzena bought more JPM shares; David Williams, Brian Rogers, Chris Davis, Kenneth Fisher, David Dreman, NWQ Managers, Bill Nygren, and HOTCHKIS & WILEY made minimal changes to their JPM holdings; lastly, Bill Miller, John Rogers, and Jean-Marie Eveillard reduced their JPM holdings.

Director Crandall Close Bowles bought 2,000 shares on 4/25/08 at $47.51.

Insiders sold between $36.11 and $46.68 since January: Managing Director James E. Staley sold a total of 41,440 shares; EVP Heidi Miller sold 25,000 shares; 10% Owner P. Morgan Chase & Co J sold 24,300 shares; and Managing Director William T. Winters sold 14,500 shares.

JPMorgan Chase & Co. has a market cap of $113.63 billion; its shares were traded at around $31.02 with a P/E ratio of 8.94 and P/S ratio of 2.00. The dividend yield of JPMorgan Chase & Co. stocks is 4.3%.

WellPoint Inc. (WLP): Down 36% Since Bruce Berkowitz Bought In the First Quarter of 2008

The shares of health insurer, like WellPoint, Inc. (WLP), decreased last week, after a new Medicare bill was passed. The bill ultimately lowers payments to most medical insurers by $13.5 billion. In May, WellPoint won a 5-year-$324 million contract to administer Medicare & Medicaid services in New York and Connecticut. The company’s first quarter profits fell 25% to $588.1 million or $1.07 per share, on high medical and debt costs. WellPoint earned $783.1 million or $1.26 per share in the same period a year ago. In addition, revenue rose 3% to $15.5 million for the quarter.

Bruce Berkowitz bought 11,015,800 shares at $43.23 to $87.63. Also, Seth Klarman and

David Einhorn bought WLP shares in the past quarter. Robert Olstein and Ruane Cuniff sold out all their WLP holdings. In addition, George Soros and Warren Buffett kept their shares of WellPoint the same. Jean-Marie, Edward Owens, Wallace Weitz, and Dodge & Cox bought more shares of WLP.

Director Ramiro G. Peru bought 1,000 shares on 3/14/08 at $47.21, as other gurus sold their shares between $48.26 and $79.35: Director Larry C Glasscock sold a total of 188,224 shares; Pres & CEO Comm and EVP Kenneth R Goulet sold 15,000 shares; Director Sheila P Burke sold 9,920 shares; and Director William H T Bush sold 3,056 shares.

WellPoint Inc. has a market cap of $23.61 billion; its shares were traded at around $44.4 with a P/E ratio of 8.31 and P/S ratio of 0.39.

J. Crew Group Inc. (JCG): Down 33% Since George Soros Bought In the First Quarter of 2008

Apparel retailer, J. Crew Group, Inc. (JCG) lowered their 2008 earnings outlook to $1.70 to $1.75 per share from $1.85 to $1.87, due to slow summer sales. The company’s first quarter increased 24% to $30.5 million or $0.48 per share compared to $24.6 million or $0.39 per share. J. Crew Group’s revenue also rose 15% to $340.6 million.

George Soros purchased a total of 17,103 shares around $39.96 to $46.86. Ron Baron owns 5,879,800 shares as of 3/31/08.

Director, 10% Owner James G. Coulter and Advisors Inc Tpg II each sold 3,000,000 shares of on 3/18/08 at $42.50.

EVP, CFO James S. Scully sold 110,000 shares on 3/24/08 at $44.99; President Tracy Gardner sold 106,467 shares on 5/9/08 at $46.80; and Director Steven D. Grand-jean sold 12,500 shares on 3/18/08 at $44.14.

J. Crew Group Inc. has a market cap of $1.77 billion; its shares were traded at around $28.54 with a P/E ratio of 17.63 and P/S ratio of 1.34.


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