John Rogers' Investment Propels Two Stakes into His Personal Top 10

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May 22, 2015

John Rogers (Trades, Portfolio), founder of Ariel Investment, LLC, is known to like to invest in small and medium-sized companies whose share prices are undervalued, believing that patience, independent thinking and a long-term outlook are critical to achieving good returns. Ariel had a 44.68% return in 2013 and a 20.32% return in 2012.

In the first quarter, Rogers made additions to two stakes – Kennametal Inc (KMT, Financial) and Blount International Inc (BLT, Financial) – that were sufficient to land them in his Top 10 by volume.

Rogers bought 2,959,253 shares of Kennametal, a Pennsylvania-based supplier of tooling and industrial materials, for an average price of $33.76 per share. The transaction had a 1.12% impact on Rogers’ portfolio.

Kennametal has a market cap of $3 billion and an enterprise value of $3.78 billion. It has a Price/Book of 2.2 and a Price/Sales of 1.1. Columbia Wanger (Trades, Portfolio), Chuck Royce (Trades, Portfolio), Richard Snow (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Diamond Hill Capital (Trades, Portfolio), Mario Gabelli (Trades, Portfolio), Pioneer Investments (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) have shares of Kennametal in their portfolios. John Burbank (Trades, Portfolio) and David Einhorn (Trades, Portfolio) sold their stakes in the first quarter.

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Rogers purchased 5,132,174 shares of Blount International, a global industrial company, for an average price of $15.36 per share. That transaction had a 0.74% impact on Rogers’ portfolio.

Blount International has a market cap of $590.83 million and an enterprise value of $988.94 million. It has a P/E of 17.2, a Price/Book of 4.2 and a Price/Sales of 0.7. Joel Greenblatt (Trades, Portfolio), Michael Price (Trades, Portfolio), Jim Simons (Trades, Portfolio), Robert Olstein (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio) and Mario Gabelli (Trades, Portfolio) have shares of Blount International in their portfolios.

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Rogers added to more than 100 existing stakes in his portfolio in the first quarter, including Anixter International Inc (AXE, Financial), Lazard Ltd (LAZ, Financial) and Verizon Communications Inc (VZ, Financial).

Rogers made five new buys in the first quarter, investing in SeaChange International Inc (SEAC, Financial), Credicorp Ltd (BAP, Financial), W W Grainger Inc (GWW, Financial), Fastenal Co (FAST, Financial) and Lumber Liquidators Holdings Inc (LL, Financial).

The most significant was the acquisition of 1,281,730 shares of SeaChange International, a Massachusetts-based provider of products and services for telecommunications and cable television. Rogers paid an average price of $7.32 per share for the stock, which had a 0.11% impact on his portfolio.

SeaChange has a market cap of $227.4 million and an enterprise value of $129.96 million. It has a Price/Book of 1.3 and a Price/Sales of 1.9. Chuck Royce (Trades, Portfolio) and Jim Simons (Trades, Portfolio) have shares of SeaChange in their portfolios.

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