Andreas Halvorsen (Trades, Portfolio), founding partner and CEO of Viking Global Investors, acquired 23 new holdings in the third quarter. His top three new holdings are Bank of America Corp. (BAC, Financial), LyondellBasell Industries (LYB, Financial) and Universal Health Services Inc. (UHS, Financial).
Halvorsen purchased 25,110,973 shares in Bank of America for an average price of $14.89 per share. The transaction impacted the portfolio by 1.7%.
The bank and financial holding company has a market cap of $203.7 billion with an enterprise value of $329.02 billion. It has a price-earnings (P/E) ratio of 16.02, a forward P/E of 12.9, a price-book (P/B) ratio of 0.8 and a price-sales (P/S) ratio of 2.7.
GuruFocus ranked the company’s financial strength 6 of 10. It has a stable Piotroski F-Score of 5. The company’s return on invested capital (ROIC) underperforms its weighted average cost of capital (WACC), meaning the company is destroying value as it grows. The cash-debt ratio of 0.6 is below the industry median of 2.1.
GuruFocus ranked the bank’s profitability and growth 5 of 10. It has an operating margin of 26.8% and a net margin of 18.7%. The return on equity (ROE) and return on assets (ROA) underperform 73% and 61% of other companies in the global banks industry. In contrast, the three-year EPS growth outperforms 96% of competitors.
Dodge & Cox is the bank’s largest shareholder among the gurus with 2.3% of outstanding shares, which is 3.4% of its total assets managed.
Halvorsen previously sold out of Bank of America in the fourth quarter of 2014. The stock was trading at $19.78 on Wednesday.
The guru purchased 3,960,078 shares of LyondellBasell for an average price of $77.28 per share. The transaction had an impact of 1.4% on the portfolio.
The chemical company has a market cap of $34.2 billion with an enterprise value of $41.4 billion. It has a P/E of 9.3, a forward P/E of 8.8, a P/B of 5.6 and a P/S of 1.3.
GuruFocus ranked the company’s financial strength 6 of 10. The Piotroski F-Score of 6 and Altman Z-Score of 4.2 suggest the company is financially healthy. Its ROIC outperforms its WACC so value is being created as the company grows. The cash-debt ratio of 0.2 is below the industry median of 0.8.
GuruFocus ranked LyondellBasell’s profitability and growth 6 of 10. It has an operating margin of 17.7% and a net margin of 13.6%. The ROE and ROA outperform 98% and 93% of other companies in the global specialty chemicals industry. Similarly, the return on capital (ROC) outperforms 90% of competitors.
With his purchase, Halvorsen became LyondellBasell's largest shareholder among the gurus. He holds 0.9% of outstanding shares, which is 1.4% of his total assets managed.
The guru previously sold out of the company in the second quarter. The stock was trading at $83.81 on Wednesday.
Halvorsen purchased 1,929,192 shares in Universal Health for an average price of $126.66 per share. The transaction had an impact of 1.03% on the portfolio.
The hospital management company has a market cap of $11.8 billion with an enterprise value of $15.5 billion. It has a P/E of 17.2, a forward P/E of 15.2, a P/B of 2.7 and a P/S of 1.3.
GuruFocus ranked the company’s financial strength 5 of 10. The high Piotroski F-Score of 7 and moderate Altman Z-Score of 2.7 suggest the company is financially healthy with minor stress. The ROIC outperforms the WACC so the company is creating value as it grows. The cash-debt ratio of 0.02 is far below the industry median of 0.3.
GuruFocus ranked Universal Health’s profitability and growth 9 of 10. It has an operating margin of 13.4% and a net margin of 7.3%. The ROE and ROA outperform 73% and 68% of other companies in the global medical care industry. The ROC outperforms 63% of competitors.
Lee Ainslie (Trades, Portfolio) is the largest shareholder among the gurus. He holds 4.7% of outstanding shares, which is 6.7% of his total assets managed.
Halvorsen previously sold out of United Health in the second quarter. The stock was trading at $122.33 on Wednesday.
Halvorsen co-founded Viking in 1999. His top three holdings are Amazon (AMZN, Financial), Facebook (FB, Financial) and Broadcom Ltd. (AVGO, Financial).
Disclosure: I do not own stock in any companies mentioned in the article.
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