Chris Davis' Holdings With Wide Margin of Safety

Chris Davis (Trades, Portfolio) is the portfolio manager of Davis Financial Fund, an independent, employee-owned investment management firm founded in 1969. He manages a portfolio composed of 186 stocks with a total value of $28,521 million.

The following are the stocks he holds that are trading with a wide margin of safety and with a very low P/E ratio.

Grupo Televisa SAB (TV)

The company operates four broadcast channels in Mexico and has network coverage through affiliated stations throughout the country. It produces pay-TV channels with national and international feeds, which reach subscribers throughout Latin America, the United States, Canada, Europe and Asia Pacific. The company also owns Televisa.com and Esmas.com.

Grupo Televisa is trading at about $29 with a very low trailing 12-month P/E multiple of 1.90 and an estimated forward P/E multiple of 35.84. Over the last 10 years, the stock has risen by 59%, and during the past year, the price has been as high as $40.05 and as low as $26.59.

The DCF model gives a fair value of $246.22 that puts the stock as undervalued with a margin of safety of 88% at current prices. The Peter Lynch earnings line gives an even higher margin of safety, with a fair price for the stock of $368.3.

During the last quarter, due to revenue growth in Telecommunications and Sky segments, net sales increased by 8.5%. Operating segment income increased by 6.6% and thanks to the success of pay-TV networks in Mexico and Latin America, the company had strong growth in Network Subscription Revenue of 27.1%.

The main shareholder is First Eagle Investment (Trades, Portfolio) with 32,462,479 shares, or 5.61% of shares outstanding. Dodge & Cox is second with 4.23% of shares outstanding, followed by Bill Gates (Trades, Portfolio) with 2.92%.

ICICI Bank Ltd. (IBN)

The company together with its subsidiaries, joint ventures and associates is a diversified financial services company. It provides banking and financial services and its segments include Retail Banking; Wholesale Banking; Treasury; Other Banking; Life Insurance; General Insurance and Others.

ICICI is trading at about $9 with a trailing 12-month P/E multiple of 12.66 and an estimated forward P/E multiple of 22.78. Over the last 10 years, the stock has risen by 66%, and during the past year the price has been as high as $13.24 and as low as $8.45.

The DCF model gives a fair value of $19.7 that puts the stock as undervalued with a margin of safety of 57% at current prices. The Peter Lynch earnings line suggests a smaller margin of safety, giving a fair price of $10.3.

During the last quarter, net profit for the company was up 15.2% and net interest income grew 15.2% from the year-ago quarter.

Ken Fisher (Trades, Portfolio) is the main guru holding IBN with 10,255,919 shares that is 0.35% of shares outstanding. Howard Marks (Trades, Portfolio) is second with 0.15% of shares outstanding, followed by Sarah Ketterer (Trades, Portfolio) with 0.13%.

Apple Inc. (AAPL)

The company designs, manufactures, and markets mobile communication and media devices, personal computers and portable digital music players.

Apple is trading at about $116.28 with a trailing 12-month P/E multiple of 13.41 and an estimated forward P/E multiple of 11.59. Over the last 10 years, the stock has risen by 1446%, and during the past year the price has been as high as $134.54 and as low as $92.00.

The DCF model gives a fair value of $246.54 that puts the stock as undervalued with a margin of safety of 53% at current prices. The Peter Lynch earnings line suggests a smaller margin of safety, giving a fair price of $125.6 that puts the stock as fairly valued at current prices.

The company had an amazing quarter, with iPhone revenue up 59% over last year, strong sales of Macs, all-time record revenue from services, driven by the App Store, and a great start for Apple Watch.

Apple posted quarterly revenue of $49.6 billion, and for the third quarter, it expects to have revenue between $49 billion and $51 billion. Gross margin was 39.7% compared to 39.4% in the year-ago quarter and expect to have between 38.5% and 39.5% for the next quarter.

Carl Icahn (Trades, Portfolio) is the main guru holding Apple with 52,760,848 shares, that is 0.93% of shares outstanding. Ken Fisher (Trades, Portfolio) is second with 0.19% of shares outstanding, followed by Jeremy Grantham (Trades, Portfolio) with 0.14%.

International Business Machines Corp. (IBM)

The company creates business value for clients and solves business problems through integrated solutions that leverage information technology and knowledge of business processes. Its solutions create value by reducing a client's operational costs or by enabling new capabilities that generate revenue.Â

IBM is trading at $147.53 with a trailing 12-month P/E multiple of 13.01 and an estimated forward P/E multiple of 8.98. Over the last 10 years, the stock has risen by 86%, and during the last 52 weeks the price has been as high as $195.00 and as low as $140.62.

The DCF model gives a fair value of $284 that puts the stock as undervalued with a margin of safety of 48% at current prices. The Peter Lynch earnings line suggests a smaller margin of safety, giving a fair price of $230.2.

In the second quarter, operating (non-GAAP) EPS was $3.84, down 13%. Total revenues from continuing operations were down 13%.

Warren Buffett (Trades, Portfolio) is the main guru holding IBM with 79,565,115 shares, that is 8.12% of shares outstanding. Jeremy Grantham (Trades, Portfolio) is second with 0.28%, followed by HOTCHKIS & WILEY with 0.17 % of shares outstanding.

Franklin Resources Inc. (BEN)

The company together with its subsidiaries operates as an investment management company. It offers investment services under Franklin, Templeton, Mutual Series, Bissett, Fiduciary Trust, Darby, Balanced Equity Management and K2 brand names.

BEN is trading at $39.45 with a trailing 12-month P/E multiple of 10.58 and an estimated forward P/E multiple of 10.91. Over the last 10 years, the stock has risen by 45%, and during the last 52 weeks the price has been as high as $59.43 and as low as $38.25.

The DCF model gives a fair value of $64.94 that puts the stock as undervalued with a margin of safety of 39% at current prices. The Peter Lynch earnings line gives to the company a fair price of $39.5.

For the second quarter of 2015 operating income was 3% in QOQ and operating revenues were 3% in QOQ as well. Operating margin was 37.7% a few down compared to 37.9% in the same quarter of a year before.

Mason Hawkins (Trades, Portfolio) is the main guru holding BEN with 8,230,490 shares, that is 1.34% of shares outstanding. Bill Nygren (Trades, Portfolio) is second with 0.88% of shares outstanding, followed by Richard Pzena (Trades, Portfolio) with 0.86%.

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