Famed investor Joel Greenblatt (Trades, Portfolio), author of The Little Book That Beats The Market and inventor of the Magic Formula, purchased 200 new stocks during the first quarter, according to GuruFocus Real Time Picks.
Greenblatt manages Gotham Asset Management along with Robert Goldstein, who combined have more than 50 years of investment experience.
The majority of Greenblatt’s portfolio is held in the industrial sector at 24.1%, followed by 22.4% in consumer cyclical and 22% in technology. Since inception in 2012, the Gotham Absolute Fund returned an annualized 15.66%.
The following are Greenblatt’s five largest purchases during the first quarter in terms of portfolio impact.
Orbital ATK Inc (OA, Financial)
Greenblatt purchased 913,810 shares of Orbital ATK, which traded for an average price of $65.83 during the quarter. The new holding has a 0.53% portfolio weighting. The graph below depicts Greenblatt’s holding history.
Orbital ATK is an aerospace and defense company that produces military small-caliber ammunition for use in soldier-carried weapons. The stock increased 37% over the past year and is currently priced at $76.92 with a P/E ratio of 7.9, and P/S ratio of 0.49.
Over the past five years, the company has struggled to increase revenue, with the growth rate at only 0.4%. EBIT, however, increased by 6.2%.
Greenblatt bought 3,456,153 shares of Teradyne for an average of $19.16 per share. The stock has a 0.5% portfolio weighting.
The company supplies automatic test equipment to test semiconductors, wireless products, and hard disk drives among others. Over the past year, the stock has risen 16%, and now trades at $20.80.
In 2014, Teradyne reported net income of $81 million, down from $165 million the year before. Similarly, the company’s operating margin has been in decline since 2012, reporting at 5.85% last year.
The current dividend yield is 1.2%, while the payout ratio is 46%.
Greenblatt initiated a new position in Kennametal, purchasing 1,741,739 shares after the stock price plunged. He purchased the new shares for an average price of $33.76 per share.
Kennametal supplies tooling, engineered components and advanced materials for production processes. The stock declined 17% over the past year, and currently has a forward P/E ratio of 18.21 and P/S ratio of 1.1. Over the past five years, the revenue growth rate was 7.3%, while EBITDA grew by 76.5%.
The dividend yield is 1.9%, and the payout ratio is 36%.
Greenblatt bought 834,087 shares of First Solar for an average price of $51.35 per share, which now accounts for 0.38% of the portfolio.
The stock currently trades at $55.89 with a P/E ratio of 25.1 and P/S ratio of 1.91. In 2014, the solar power company reported net income of $397 million, which was up from $353 million the year before. The operating margin also increased from 11.14% in 2013 to 12.51% last year.
NewLink Genetics Corp (NLNK, Financial)
Greenblatt’s fifth-largest purchase was 838,221 shares of NewLink Genetics, which traded for an average price of $43.06 during the quarter. Unlike the aforementioned stocks, Greenblatt has not owned NewLink Genetics in the past five years.
NewLink is a biopharmaceutical company that develops immunotherapeutic products to improve cancer treatment options for patients. The increased a whopping 104% over the past year and currently trades at $41.96. The P/E ratio is 13.9, while the P/S ratio is 6.3.
The company reported a profit for the first time in 2014, with net income of $102.9 million, up from $-31.2 million the year before.
View Joel Greenblatt (Trades, Portfolio)’s latest trades here. Not a Premium Member of GuruFocus? Try it free for 7 days.
