John Keeley Buys Synovus Financial and ABM, Sells Several Stakes

Most important 3rd-quarter sales are about Timken, Bonanza, CoreLogic

Author's Avatar
Nov 16, 2015
Article's Main Image

John Keeley (Trades, Portfolio) is president and portfolio manager/analyst at Keeley Asset Management Corp., a registered investment adviser he established in 1982. Keeley emphasizes the purchase of companies undergoing corporate redevelopment such as spinoffs, companies emerging from bankruptcy, securities trading below actual or perceived book value, savings and loan and insurance conversions and distressed utilities.

The hedge fund has a portfolio composed of 325 stocks with a total value of $3,530,000,000, and the following are the most weighted trades based on the impact on the portfolio during the third quarter.

The hedge fund has bought 1,620,430 shares of Synovus Financial Corp. (SNV)with an impact of 1.36% on the portfolio.

The company provides integrated financial services including commercial and retail banking, financial management, insurance and mortgage services to its customers through 28 locally branded banking divisions of its wholly owned subsidiary bank, Synovus Bank, and other offices in Georgia, Alabama, South Carolina, Florida and Tennessee. Synovus Bank is a Georgia state-chartered bank.

During the last quarter diluted EPS grew by 32.2% as compared to the third quarter 2014 and adjusted diluted EPS grew 14.6% as compared to the same quarter of 2014.

The stock is trading with a P/E ratio of 20.40 and has been as high as $33.80 per share and as low as $24.41 per share in the past year. It is currently 5.21% below its 52-week high and 31.26% above its 52-week low. According to the DCF calculator, at the current price of $32.04 per share the company looks overpriced by 38%.

The company's main shareholder among the gurus is Richard Pzena (Trades, Portfolio) with a stake of 1.38% of outstanding shares followed by Keeley with 1.24% and Private Capital (Trades, Portfolio) with 0.28% of outstanding shares.

The investor sold out his stake of The Timken Co. (TKR) with an impact of 0.74% on the portfolio.

Timken designs, manufactures and markets mechanical components such as bearings and power transmission solutions, tapered roller bearings, precision cylindrical and ball bearings, spherical and cylindrical roller bearings, chains and augers, gear-drive systems, and aerospace products, industrial services, steel, and precision steel components. The company operates under four reporting segments: Mobile Industries; Process Industries; Aerospace; and Steel.

For the third quarter sales decreased by 10% from the same quarter of a year before but net income from continuing operations was 75 cents per diluted share for the quarter, versus a loss of 12 cents per share a year ago.

The stock is trading with a P/E ratio of 193.20 and has been as high as $44.30 per share and as low as $26.31 per share in the past year. It is currently 31.11% below its 52-week high and 16.00% above its 52-week low. According to the DCF calculator, at the current price of $30.52 per share the company looks highly overpriced by 1962%.

First Eagle Investment (Trades, Portfolio) is the company's leading shareholder among the gurus with a stake of 7.29% of outstanding shares, followed by David Dreman (Trades, Portfolio) with 0.01%.

The hedge fund sold out its stake of Bonanza Creek Energy Inc. (BCEI) with an impact of 0.72% on the portfolio.

The company is an independent energy company engaged in the acquisition, exploration, development and production of onshore oil and associated liquids rich natural gas in the United States. It owns and operates oil producing assets in the North Park Basin in Colorado and the McKamie Patton Field in Southern Arkansas.

The stock is trading with a forward P/E ratio of 129.87 and has been as high as $39.49 per share and as low as $3.72 per share in the past year. It is currently 80.32% below its 52-week high and 108.87% above its 52-week low.

The company's only shareholder among the gurus is Ron Baron (Trades, Portfolio) with a stake of 1.34% of outstanding shares that is 0.05% of his total assets.

The investor bought 912,490 shares of ABM Industries Inc. (ABM) with an impact of 0.71% on the portfolio.

The company is a provider of integrated facility solutions. The company provides end-to-end integrated facilities management services to thousands of commercial, governmental, industrial, institutional, residential and retail client facilities in hundreds of cities, primarily throughout the United States.

During the third quarter revenues grew by 5.7%, but net income declined 92.3% and adjusted EBITDA decreased 14.6% compared to the third quarter of 2014.

The stock is trading with a P/E ratio of 24.80 and has been as high as $34 per share and as low as $25.94 per share in the past year. It is currently 16.29% below its 52-week high and 9.71% above its 52-week low. According to the DCF calculator, at the current price of $28.46 per share the company looks highly overpriced by 134%.

John Keeley (Trades, Portfolio) is the company's leading shareholder among the gurus with a stake of 1.62% of outstanding shares, followed by David Dreman (Trades, Portfolio) with 0.54%, Robert Olstein (Trades, Portfolio) with 0.43% and Third Avenue Management (Trades, Portfolio) with 0.31%.

Keeley reduced his stake in Spectrum Brands Holdings Inc. (SPB) by 77.43% and with an impact of 0.67% on the portfolio.

The company manufactures and markets alkaline, zinc carbon and hearing aid batteries, herbicides, insecticides and repellants and specialty pet supplies. It designs and markets rechargeable batteries, battery-powered lighting products, electric shavers, grooming products and hair care appliances.

Spectrum reported 10.5% growth for sakes and organic sales increased 3.7% from the prior year. Adjusted EBITDA grew by 16.8% and adjusted EBITDA margin was 18.9% compared to 17.9% in the same quarter of a year before.

The stock is trading with a P/E ratio of 29.00 and has been as high as $106.55 per share and as low as $86.02 per share in the past year. It is currently 14.91% below its 52-week high and 5.39% above its 52-week low. According to the DCF calculator, at the current price of $90.66 per share the company looks overpriced by 96%.

John Keeley (Trades, Portfolio) is the company’s main shareholder among the gurus with a stake of 0.14% of outstanding shares which is 0.21% of his total assets.

The hedge fund sold out its stake of CoreLogic Inc. (CLGX) with an impact of 0.61% on the portfolio.

The company is a provider of property, financial and consumer information, analytics and services to mortgage originators and servicers, financial institutions and other businesses and government-sponsored enterprises. Its data, query, analytical and business outsourcing services help its clients identify manage and mitigate credit and interest rate risk.

CoreLogic reported 5% growth for revenues while operating income declined by 15% compared to the same quarter of last year. Adjusted EBITDA grew by 3% and adjusted EBITDA margin of 30% was in line with prior-year and prior-quarter levels.

The stock is trading with a P/E ratio of 30.90 and has been as high as $42.31 per share and as low as $30.10 per share in the past year. It is currently 15.95% below its 52-week high and 18.14% above its 52-week low. According to the DCF calculator, at the current price of $35.56 per share the company looks highly over priced by 106%.

Joel Greenblatt (Trades, Portfolio) is the company's only shareholder among the gurus with a stake of 0.06% of outstanding shares, which is 0.02% of his total assets.

Keeley sold out his stake in Federal-Mogul Holdings Corp. (FDML) with an impact of 0.61% on the portfolio.

It supplies components, accessories and systems to the automotive, small engine, heavy-duty, marine, railroad, agricultural, off-road, aerospace and energy, industrial and transportation markets, including customers in both the original equipment manufacturers and services market and the replacement market. The company operates in two segments, Powertrain and Vehicle Components Solutions.

Net sales for the third quarter had a decrease of 3% compared to the same quarter of last year and operational EBITDA was 8.4% of sales in Q3 2015 compared to 8.1% of sales in Q3 2014,

The stock is trading with a forward P/E ratio of 9.96 and has been as high as $16.72 per share and as low as $6.01 per share in the past year. It is currently 55.32% below its 52-week high and 24.29% above its 52-week low.

The company's mean shareholder among the guru is Carl Icahn (Trades, Portfolio) with a stake of 81.99% of outstanding shares followed by Mario Gabelli (Trades, Portfolio) with 4.62%.

The hedge fund reduced its stake of Starz (STRZA) by 59.75% with an impact of 0.59% on the portfolio.

The company, through its subsidiaries, operates as a media and entertainment company. The company was formerly known as Starz LLC and changed its name to Starz Inc. in January 2013.

Starz Networks reported revenues with an increase of 1% and 2% growth for operating income, compared to the same quarter of a year before.

The stock is trading with a P/E ratio of 12.50 and has been as high as $46.59 per share and as low as $27.31 per share in the past year. It is currently 27.88% below its 52-week high and 23.03% above its 52-week low. According to the DCF calculator, at the current price of $33.6per share the company looks undervalued by 15%.

Keeley is the company's main shareholder among the gurus with a stake of 0.37% of outstanding shares, followed by Mario Gabelli (Trades, Portfolio) with 0.32%, First Eagle Investment (Trades, Portfolio) with 0.05% and Joel Greenblatt (Trades, Portfolio) with 0.02% of outstanding shares.