Olstein Capital Management’s Robert Olstein (Trades, Portfolio) bought eight new holdings in the third quarter. His top three new holdings are Stericycle Inc. (SRCL, Financial), Vista Outdoor Inc. (VSTO, Financial) and VWR Corp. (VWR, Financial).
Olstein founded his firm in 1995. It follows an accounting-driven, value-oriented philosophy that is based on the premise that the price of a common stock may not reflect the company’s true value. The investment team employs analytical and valuation methods to determine the quality of a company. It looks behind the numbers to assess the company’s financial strength and downside risk.
Stericycle
In Stericycle, the guru purchased 86,000 shares for an average price of $90.41 per share. The transaction had an impact of 0.9% on the portfolio.
Stericycle, which provides waste management services, has a market cap of $6.3 billion with an enterprise value of $10.01 billion. It has a price-earnings (P/E) ratio of 38.3, a forward P/E of 15.8, a price-book (P/B) ratio of 2.2 and a price-sales (P/S) ratio of 1.8.
GuruFocus ranked the company’s financial strength 5 of 10. The company has a strong Piotroski F-Score of 7 and a moderate Altman Z-Score of 2.1, which indicate the company has a healthy financial condition. The company’s return on invested capital (ROIC) outperforms its weighted average cost of capital (WACC). The cash-debt ratio of 0.01 is below the industry median of 0.43.
GuruFocus ranked Stericycle’s profitability and growth 9 of 10. It has an operating margin of 14.5% and a net margin of 7.5%. Stericycle’s return on equity (ROE) and return on assets (ROA) outperform 66% and 69% of other companies in the global waste management industry. Its return on capital (ROC) outperforms 88% of its competitors.
David Rolfe (Trades, Portfolio) is the company’s largest shareholder among the gurus with 3.2% of outstanding shares, which is 5.7% of his total assets managed. Other gurus with a position are Meridian Funds (Trades, Portfolio), David Carlson (Trades, Portfolio), Tom Gayner (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio).
The DCF Calculator gives the stock a fair value of $20.65; it was trading at $73.91 on Tuesday.
Vista Outdoor
In Vista Outdoor, Olstein purchased 113,230 shares for an average price of $44.15 per share. The transaction had an impact of 0.7% on the portfolio.
The company, which produces products for shooting sports and other outdoor sports, has a market cap of $2.33 billion with an enterprise value of $3.3 billion. It has a P/E of 16.7, a forward P/E of 14.2, a P/B of 1.4 and a P/S of 1.01.
GuruFocus ranked the company’s financial strength 5 of 10. It has a high Piotroski F-Score of 7 with a moderate Altman Z-Score, which suggests the company is in good financial condition. Its cash-debt ratio of 0.06 is below the industry median of 0.7.
GuruFocus ranked Vista’s profitability and growth 6 of 10. It has an operating margin of 11.02% and a net margin of 5.9%. Its ROE and ROA outperform 64% and 66% of other companies in the global leisure industry. Similarly, its ROC outperforms 78% of competitors.
First Eagle Investment (Trades, Portfolio) is Vista Outdoor’s largest investor among the gurus with 7.7% of outstanding shares, which is 0.5% of their total assets managed. Other gurus with a position are Keeley Asset Management Corp (Trades, Portfolio)., Greenblatt, Steven Cohen (Trades, Portfolio), Jim Simons (Trades, Portfolio) and Jones.
The DCF Calculator gives the stock a fair value of $24.61; it was trading at $38.72 on Tuesday.
VWR
In VWR, Olstein purchased 168,239 shares for an average price of $28.98 per share. The transaction had an impact of 0.6% on the portfolio.
The company, which distributes research laboratory products, has a market cap of $3.6 billion with an enterprise value of $5.5 billion. It has a P/E of 23.9, a forward P/E of 14.2, a P/B of 2.4 and a P/S of 0.8.
GuruFocus ranked VWR’s financial strength 5 of 10. The company has a stable Piotroski F-Score of 6 with a moderate Altman Z-Score of 1.86, indicating the company has minor financial stress. The cash-debt ratio of 0.06 is below the industry median of 1.8.
GuruFocus ranked the company’s profitability and growth 5 of 10. It has an operating margin of 7.5% and a net margin of 3.3%. VWR’s ROE and ROA outperform 74% and 64% of other companies in the global diagnostics and research industry. Similarly, its ROC outperforms 82% of competitors.
Columbia Wanger (Trades, Portfolio) is the company’s largest shareholder among the gurus with 3.6% of outstanding shares, which is 1.6% of their total assets managed. Other gurus with a position in VWR are Simons and Jones.
The DCF Calculator gives the stock a fair value of $11.66; it was trading at $26.26 on Tuesday.
Other new acquisitions Olstein made in the third quarter are Caterpillar (CAT, Financial), CF Industries (CF, Financial), Danaher Corp. (DHR, Financial), Snap-on Inc. (SNA, Financial) and John B Sanfilippo & Son (JBSS, Financial). To see all the guru’s buys and sells for the quarter, view his portfolio.
Disclosure: I do not own stock in any companies mentioned in the article.
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