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David Goodloe
David Goodloe
Articles (722) 

PRIMECAP Adds to Three Stakes in Portfolio

July 07, 2015 | About:

At the end of June, when most Americans were embarking or about to embark on their Fourth of July holidays, which likely included fireworks displays, PRIMECAP Management (Trades, Portfolio) made some modest fireworks of its own by adding to three stakes in its portfolio – SanDisk Corp (NASDAQ:SNDK), Chegg Inc (NYSE:CHGG) and Abaxis Inc (NASDAQ:ABAX).

PRIMECAP bought 2,089,140 shares of SanDisk, a Silicon Valley-based company that designs, develops and manufactures flash memory storage solutions and software, for an average price of $58.22 per share. That purchase had a 0.12% impact on PRIMECAP’s portfolio.

PRIMECAP’s stake in SanDisk is now 10,415,455 shares. SanDisk operates in one segment, flash memory storage products, in the United States, China, Taiwan, Other Asia-Pacific & Europe, Middle East and Africa.

SanDisk has a market cap of $11.41 billion and an enterprise value of $11.88 billion. It has a P/E of 16.9, a Price/Book of 2.0 and a Price/Sales of 2.0. First Eagle Investment (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Ken Fisher (Trades, Portfolio), Scott Black (Trades, Portfolio), Ray Dalio (Trades, Portfolio), Louis Moore Bacon (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Jim Simons (Trades, Portfolio), David Dreman (Trades, Portfolio) and Chuck Royce (Trades, Portfolio) have shares of SanDisk in their portfolios.

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SanDisk, the flash memory supplier for Samsung Electronics Co. Ltd. (SSNLF), has had its share of challenges. In the last year, the price of a share of its stock has fallen 43%, largely because Samsung’s smartphone sales have been declining but also because investors have doubts about the outlook for the flash and computer memory market.

PRIMECAP acquired 4,206,282 shares of Chegg, an education company based in Santa Clara, California, that focuses on renting textbooks, homework assistance, scholarships, internships and tutoring, for an average price of $7.84 per share. The transaction had a 0.03% impact on PRIMECAP’s portfolio.

The purchase raised PRIMECAP’s stake in Chegg by more than 45% – to 9,338,372 shares.

Chegg has a market cap of $660.86 million and an enterprise value of $592.51 million. It has a Price/Book of 2.8 and a Price/Sales of 2.1. Jim Simons (Trades, Portfolio) and Chuck Royce (Trades, Portfolio) have shares of Chegg in their portfolios.

PRIMECAP also bought 323,800 shares of Abaxis, a medical and veterinary blood analysis company based in California, for an average price of $51.48 per share. The acquisition had a 0.02% impact on PRIMECAP’s portfolio.

PRIMECAP’s stake in Abaxis is now 2,345,000 shares.

Abaxis has a market cap of $1.15 billion and an enterprise value of $1.04 billion. It has a P/E of 42.1, a Price/Book of 5.2 and a Price/Sales of 5.7. Columbia Wanger (Trades, Portfolio) and Joel Greenblatt (Trades, Portfolio) have shares of Abaxis in their portfolios.

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About the author:

David Goodloe
I'm a journalist by training. I grew up in Arkansas and earned my B.A. at the University of Arkansas. I earned my master's degree at the University of North Texas. My background includes stints at newspapers in Arkansas and Texas and teaching news writing and news editing to students at the University of Oklahoma and Richland College here in Dallas. I'm a writer/editor at GuruFocus.

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