Bill Nygren Invests in Stake in Alphabet

Guru buys stake in Cummins, reduces stake in Amazon.com

Nov 24, 2015

Bill Nygren (Trades, Portfolio) and his partners at Oakmark Fund look for companies that are trading below their true value, then hold the shares until the businesses rise to that level. It is a strategy that has produced double-digit returns in recent years.

Nygren’s most noteworthy third-quarter transaction was his acquisition of a 1,900,000-share stake in Cummins Inc. (CMI, Financial), a Columbus, Ind.-based heavy equipment company, for an average price of $123.51 per share. The deal had a 1.31% impact on Nygren’s portfolio.

Cummins has a market cap of $17.43 billion and an enterprise value of $17.69 billion. It has a P/E of 10.5, a forward P/E of 11.2, a P/B of 2.3 and a P/S of 0.9. GuruFocus has given Cummins a Financial Strength rating of 6/10 and a Profitability and Growth rating of 8/10.

Cummins sold for $98.14 per share Monday afternoon.

Nygren also purchased a 2,700,000-share stake in Anadarko Petroleum Corp. (APC, Financial), an oil and gas company based in The Woodlands, Texas, for an average price of $71.04 per share. The transaction had a 1.04% impact on Nygren’s portfolio.

Anadarko has a market cap of $30.67 billion and an enterprise value of $47.49 billion. It has a forward P/E of 312.5, a P/B of 2.2 and a P/S of 3.1. GuruFocus has given Anadarko a Financial Strength rating of 6/10 and a Profitability and Growth rating of 6/10.

Monday afternoon Anadarko sold for $60.35 per share.

Nygren acquired a 210,000-share stake in Alphabet Inc. (GOOG, Financial), the California-based parent company of Google, for an average price of $614.57 per share. The transaction had a 0.81% impact on Nygren’s portfolio.

Alphabet has a market cap of $519.91 billion and an enterprise value of $465.87 billion. It has a P/E of 33.5, a forward P/E of 23, a P/B of 4.6 and a P/S of 7.6. GuruFocus has given Alphabet a Financial Strength rating of 8/10 and a Profitability and Growth rating of 8/10.

Alphabet sold for $755.98 per share Monday afternoon.

Nygren also sold his 3,800,000-share stake in Las Vegas Sands Corp. (LVS, Financial), a Paradise, Nev.-based casino and resort operating company, for an average price of $50.41 per share. The deal had a -1.18% impact on Nygren’s portfolio.

Las Vegas Sands has a market cap of $35.97 billion and an enterprise value of $44.74 billion. It has a P/E of 16.2, a forward P/E of 16.9, a P/B of 5.2 and a P/S of 3.0. GuruFocus has given Las Vegas Sands a Financial Strength rating of 7/10 and a Profitability and Growth rating of 8/10.

Chris Davis (Trades, Portfolio), Frank Sands (Trades, Portfolio), T. Rowe Price Income Equity Fund, PRIMECAP Management (Trades, Portfolio), Murray Stahl (Trades, Portfolio), Mario Gabelli (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Ray Dalio (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Tom Gayner (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) have shares of Las Vegas Sands in their portfolios.

Monday afternoon Las Vegas Sands sold for $45.19 per share.

Nygren sold his 38,040,000-share stake in Glencore PLC (LSE:GLEN, Financial), a Swiss commodities company, for an average price of £2.73 (approximately $4.15 in U.S. currency) per share. The deal had a -0.9% impact on Nygren’s portfolio.

Glencore has a market cap of $13.29 billion and an enterprise value of $43.42 billion. It has a P/E of 8, a forward P/E of 8.6, a P/B of 0.4 and a P/S of 0.1. GuruFocus has given Glencore a Financial Strength rating of 7/10 and a Profitability and Growth rating of 6/10.

David Herro (Trades, Portfolio) has shares of Glencore in his portfolio.

Glencore sold for £0.9 (about $1.37 in American money) per share Monday.

Nygren reduced his stake in Amazon.com Inc. (AMZN, Financial), a Seattle-based ecommerce company, by more than 34%. Nygren sold 320,000 shares for an average price of $505.62 per share. The transaction had a -0.83% impact on Nygren’s portfolio.

Amazon.com has a market cap of $318.28 billion and an enterprise value of $312.1 billion. It has a P/E of 970, a forward P/E of 90.1, a P/B of 25.6 and a P/S of 3.2. GuruFocus has given Amazon.com a Financial Strength rating of 5/10 and a Profitability and Growth rating of 7/10.

Amazon.com sold for $678.99 per share Monday afternoon.

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