Mariko Gordon Acquires Five New Stakes in Second Quarter

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Aug 27, 2015
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Mariko Gordon (Trades, Portfolio)’s Daruma Capital Management has had an enviable record of late. It registered a return of 44.08% in 2014 and 19.89% in 2013. Gordon started the firm 20 years ago with no assets under management. Today Gordon's firm has more than $2 billion in assets. Not bad for someone whose college degree was in comparative literature.

The most significant transaction that Gordon made in the second quarter was the sale of her stake in Westinghouse Air Brake Technologies Corp. (WAB, Financial), a Pennsylvania-based maker of products for the rail industry. Gordon sold her 747,443-share stake for an average price of $98.14. The deal had a -3.17% impact on Gordon’s portfolio.

Westinghouse has a market cap of $9.29 billion and an enterprise value of $9.49 billion. It has a P/E of 24.7, a Price/Book of 4.8 and a Price/Sales of 2.8. Columbia Wanger (Trades, Portfolio), Ron Baron (Trades, Portfolio), Chuck Royce (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Jim Simons (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), John Keeley (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Steven Cohen (Trades, Portfolio), Ray Dalio (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio) and First Pacific Advisors (Trades, Portfolio) have shares of Westinghouse in their portfolios.

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Most of Gordon’s largest transactions in the second quarter, however, were her new buys and additions.

Gordon bought five new stakes in the second quarter – Briggs & Stratton Corporation (BGG, Financial), HMS Holdings Corp. (HMSY, Financial), Forward Air Corp. (FWRD, Financial), Bruker Corp. (BRKR, Financial) and Sensient Technologies Corp. (SXT, Financial).

Gordon acquired a 3,473,949-share stake in Briggs & Stratton, a Wisconsin-based maker of gas engines mostly for outdoor power equipment, for an average price of $19.59 per share. The transaction had a 2.94% impact on Gordon’s portfolio.

Briggs & Stratton has a market cap of $878.17 million and an enterprise value of $984.78 million. It has a P/E of 19.3, a Price/Book of 1.6 and a Price/Sales of 0.5. Charles Brandes (Trades, Portfolio), Chuck Royce (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) also have shares of Briggs & Stratton in their portfolios.

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Gordon purchased 3,258,692 shares of HMS Holdings, a business services company based in Irving, Texas, for an average price of $16.89 per share. The acquisition had a 2.24% impact on Gordon’s portfolio.

HMS Holdings has a market cap of $886.41 million and an enterprise value of $932.85 million. It has a P/E of 65.4, a Price/Book of 1.6 and a Price/Sales of 2.0. RS Investment Management (Trades, Portfolio) and Chuck Royce (Trades, Portfolio) have shares of HMS Holdings in their portfolios.

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Gordon bought 672,441 shares of Forward Air Corp., a Greenville, Tenn.-based provider of surface transportation and related logistics services to the air freight market, for an average price of $52.69 per share. The deal had a 1.54% impact on Gordon’s portfolio.

Forward Air has a market cap of $1.4 billion and an enterprise value of $1.42 billion. It has a P/E of 27.6, a Price/Book of 2.9 and a Price/Sales of 1.6. Chuck Royce (Trades, Portfolio), Columbia Wanger (Trades, Portfolio), James Barrow (Trades, Portfolio), Jim Simons (Trades, Portfolio), Louis Moore Bacon (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) have shares of Forward Air in their portfolios.

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Gordon added to 25 existing stakes in her portfolio in the second quarter. The most noteworthy addition was her purchase of 3,504,985 shares of Entegris Inc. (ENTG, Financial), a Massachusetts-based provider of microelectonics materials and components, for an average price of $14.02 per share. The deal had a 2.24% impact on Gordon’s portfolio.

Entegris has a market cap of $1.92 billion and an enterprise value of $2.3 billion. It has a P/E of 40.9, a Price/Book of 2.5 and a Price/Sales of 1.8. PRIMECAP Management (Trades, Portfolio), NWQ Managers (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Robert Olstein (Trades, Portfolio) and Mario Gabelli (Trades, Portfolio) have shares of Entegris in their portfolios.

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Gordon added 754,191 shares to her existing stake in Constant Contact Inc. (CTCT, Financial), a Massachusetts-based online marketing company, for an average price of $31.85 per share. The acquisition had a 0.95% impact on her portfolio.

Constant Contact has a market cap of $779.6 million and an enterprise value of $598.86 million. It has a P/E of 42.6, a Price/Book of 2.7 and a Price/Sales of 2.3. Gordon is Constant Contact’s leading shareholder among the gurus, but RS Investment Management (Trades, Portfolio), Jim Simons (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio) and Joel Greenblatt (Trades, Portfolio) also have shares of Constant Contact in their portfolios.

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Gordon also bought 176,960 shares of Brunswick Corp. (BC, Financial), a Lake Forest, Ill.-based company that has been involved in manufacturing of numerous products since 1845, for an average price of $52.26 per share. The purchase had a 0.4% impact on Gordon’s portfolio.

Brunswick Corp. has a market cap of $4.51 billion and an enterprise value of $4.36 billion. It has a P/E of 17.0, a Price/Book of 3.6 and a Price/Sales of 1.2. Meridian Funds (Trades, Portfolio), RS Investment Management (Trades, Portfolio), Steven Cohen (Trades, Portfolio), Mario Gabelli (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) have shares of Brunswick in their portfolios.

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Among the other stakes to which Gordon added shares in the second quarter were Rogers Corp. (ROG, Financial), A. Schulman Inc. (SHLM, Financial) and Electronics for Imaging Inc. (EFII).

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