Delphi Management founder Scott Black (Trades, Portfolio) gained 14 new holdings in the final quarter of 2016. His top three new holdings are HD Supply Holdings Inc. (HDS, Financial), Royal Caribbean Cruises Ltd. (RCL, Financial) and Fabrinet (FN, Financial).
Black founded Delphi in 1980 and currently serves in the capacity of president. Since Black is a follower of the Graham-Dodd school of value investing, the firm focuses on a company’s underlying fundamental performance as opposed to betting on short-term market movements. Taking only long positions, the firm invests in U.S.-listed companies that meet a set of rigorous criteria and have good management. The current portfolio is composed of 93 stocks.
The investor purchased 61,680 shares of HD Supply Holdings for an average price of $36.87 per share. The trade expanded the portfolio 1.5%, and the stock became one of Black’s top 10 holdings.
HD Supply is an industrial supplier to customers in maintenance, repair and operations, infrastructure, power and specialty construction. Headquartered in Atlanta, the company has a market cap of $8.7 billion; its shares were trading around $43.25 on Friday with a price-earnings (P/E) ratio of 7.7.
The Peter Lynch chart below shows the stock is trading below its fair value.
GuruFocus ranked the company’s financial strength 5 of 10 and its profitability and growth 4 of 10. HD Supply does not pay a dividend.
Jana Partners (Trades, Portfolio) is the company’s largest guru shareholder with 3.9% of its outstanding shares. This represents 6.1% of the firm’s total assets managed. In total, 10 gurus hold the stock.
Black bought 28,990 shares of Royal Caribbean Cruises for an average price of $78.71 per share, giving it 1.4% portfolio space.
Royal Caribbean Cruises, as its name suggests, owns and operates cruise liners. The Miami-based company has a market cap of $20.4 billion; its shares were trading around $95.21 on Friday with a P/E ratio of 16.03, a forward P/E of 13.5, a price-book (P/B) ratio of 2.2 and a price-sales (P/S) ratio of 2.4.
The Peter Lynch chart below shows the stock is trading slightly above its fair value.
GuruFocus ranked Royal Caribbean’s financial strength 5 of 10 and its profitability and growth 8 of 10. The trailing 12-month dividend yield is 1.8%, and the forward dividend yield is 2%. Over the past five years, the company has grown its dividend at a rate of 51.3% per year.
PRIMECAP Management (Trades, Portfolio) is the company’s largest shareholder among the gurus with 5.1% of outstanding shares. This represents 0.9% of its total assets managed. In all, 13 gurus have positions in Royal Caribbean Cruises.
Black purchased 57,227 shares of Fabrinet for an average price of $41.7 per share, expanding the portfolio 1.4%.
Fabrinet provides optical packaging and precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers. Based in Thailand, the company has a market cap of $1.8 billion; its shares were trading around $48.4 on Friday with a P/E ratio of 20.4, a P/B ratio of 2.8 and a P/S ratio of 1.5.
The Peter Lynch chart below shows the stock is trading above its fair value.
GuruFocus ranked Fabrinet’s financial strength 8 of 10 and its profitability and growth 7 of 10. The company does not pay a dividend.
Chuck Royce (Trades, Portfolio) is the company’s largest guru shareholder with 0.6% of its outstanding shares, which represents 0.05% of his total assets managed. Steven Cohen (Trades, Portfolio), Jim Simons (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) also hold the stock.
Other holdings Black established during the quarter are Sensata Technologies Holding NV (ST, Financial), Daimler AG (DDAIF, Financial), Royal Dutch Shell PLC (RDS.A, Financial), Wyndham Worldwide Corp. (WYN, Financial), Freeport-McMoRan Inc. (FCX, Financial), Life Storage Inc. (LSI, Financial) and Shire PLC (SHPG, Financial).
Disclosure: I do not own any stocks mentioned in the article.
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