MSD Capital, which manages the portfolio of Michael Dell (Trades, Portfolio), founder of Dell Inc. (DELL, Financial), made five transactions on the guru’s behalf in the second quarter.
The largest was the sale of Dell’s 717,683-share holding in Esterline Technologies Corp. (ESL, Financial), a provider of specialty products for aerospace and defense clients, for an average price of $65.47 per share. The divestiture had a -8.56% impact on Dell’s portfolio.
First Pacific Advisors (Trades, Portfolio) is Esterline’s leading shareholder among the gurus with a stake of 3,690,554 shares. The stake is 12.55% of Esterline’s outstanding shares and 1.94% of First Pacific Advisors (Trades, Portfolio)’ total assets.
Esterline has a price-earnings (P/E) ratio of 43.1, a forward P/E of 14.8, a price-book (P/B) ratio of 1.4 and a price-sales (P/S) ratio of 1.3. GuruFocus gives Esterline a Financial Strength rating of 6/10 and a Profitability and Growth rating of 7/10 with return on equity (ROE) of 3.39% that is lower than 58% of the companies in the Global Aerospace & Defense industry and return on assets (ROA) of 1.74% that is lower than 54% of the companies in that industry.
Esterline sold for $76.32 per share at market close Wednesday. The DCF Calculator gives Esterline a fair value of $34.08.
Dell’s remaining transactions in the quarter were reductions.
Dell sold 229,371 shares, nearly 84% of his holding, in WEX Inc. (WEX, Financial), a Maine-based payment processing and information management services provider, for an average price of $89.1 per share. The deal had a -3.56% impact on Dell’s portfolio.
Dell’s holding in the company is now 44,115 shares, which is 0.1% of WEX’s outstanding shares and 0.98% of Dell’s total assets. RS Investment Management (Trades, Portfolio), with 300,500 shares, is WEX’s leading shareholder among the gurus. The holding is 0.7% of WEX’s outstanding shares and 0.27% of RS Investment Management (Trades, Portfolio)’s total assets.
WEX has a P/E of 43.5, a forward P/E of 23.6, a P/B of 3.5 and a P/S of 4.4. GuruFocus gives WEX a Financial Strength rating of 4/10 and a Profitability and Growth rating of 7/10 with ROE of 8.13% that is higher than 51% of the companies in the Global Business Services industry and ROA of 2.36% that is lower than 58% of the companies in that industry.
WEX sold for $99.08 per share Wednesday. The DCF Calculator gives WEX a fair value of $47.58.
Dell’s holding in PVH Corp. (PVH, Financial), a clothing company based in New York City, was trimmed by more than 16% with the sale of 157,503 shares for an average price of $94.06 per share. The transaction had a -2.91% impact on Dell’s portfolio.
The holding is 0.99% of PVH’s outstanding shares and 18.86% of Dell’s total assets. Sarah Ketterer (Trades, Portfolio) is PVH’s leading shareholder among the gurus with a stake of 1,706,519 shares. The stake is 2.11% of PVH’s outstanding shares and 3.92% of Ketterer’s total assets.
PVH has a P/E of 13, a forward P/E of 16.9, a P/B of 1.8 and a P/S of 1.1. GuruFocus gives PVH a Financial Strength rating of 5/10 and a Profitability and Growth rating of 8/10 with ROE of 15.12% that is higher than 72% of the companies in the Global Apparel Manufacturing industry and ROA of 6.41% that is higher than 64% of the companies in that industry.
PVH sold for $108.82 per share Wednesday. The DCF Calculator gives PVH a fair value of $120.02 with a 9% margin of safety.
Dell’s stake in Asbury Automotive Group Inc. (ABG, Financial), an Atlanta-based operator of U.S. automobile dealerships, was reduced by more than 10% by the sale of 224,900 shares for an average price of $56.18 per share. The deal had a -2.51% impact on Dell’s portfolio.
The remaining stake of 2,000,696 shares is 9.03% of Asbury’s outstanding shares and 26.39% of Dell’s total assets. Dell is Asbury’s leading shareholder among the gurus.
Asbury has a P/E of 8.1, a forward P/E of 8.9, a P/B of 5.3 and a P/S of 0.2. GuruFocus gives Asbury a Financial Strength rating of 5/10 and a Profitability and Growth rating of 7/10 with ROE of 54.83% that is higher than 98% of the companies in the Global Auto & Truck Dealerships industry and ROA of 6.91% that is higher than 72% of the companies in that industry.
Asbury sold for $52.83 per share Wednesday. The DCF Calculator gives Asbury a fair value of $69.77 with a 24% margin of safety.
Dell’s stake in Wesco Aircraft Holdings Inc. (WAIR, Financial), a California-based provider of supply chain management solutions for the aerospace industry, was cut by nearly 1% by the sale of 53,834 shares for an average price of $14.24 per share. The transaction had a -0.14% impact on Dell’s portfolio.
The remaining stake of 5,510,284 shares is 5.59% of Wesco’s outstanding shares and 18.5% of Dell’s total assets. Dell is Wesco’s leading shareholder among the gurus.
Wesco has a forward P/E of 12, a P/B of 1.6 and a P/S of 0.9. GuruFocus gives Wesco a Financial Strength rating of 4/10 and a Profitability and Growth rating of 7/10 with ROE of -16.51% that is lower than 89% of the companies in the Global Industrial Distribution industry and ROA of -6.98% that is lower than 90% of the companies in that industry.
Wesco sold for $14.06 per share Wednesday. The DCF Calculator gives Wesco a fair value of $-16.27.
Disclosure: I do not own shares in any of the stocks in this article.
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