AFAM Capital’s John Buckingham (Trades, Portfolio) established positions in two stocks and two exchange-traded funds (ETFs) in the third quarter.
Managing a portfolio of 189 stocks, Buckingham invests largely in domestic value stocks. ETFs, options and preferred shares make up the majority of his portfolio at 29.6%. In 2016, the firm’s Al Frank Fund returned 15.62%, beating the S&P 500’s return of 11.96%.
Buckingham invested in Lowe’s Companies Inc. (LOW, Financial) and Juniper Networks Inc. (JNPR, Financial). The two ETFs he invested in are iShares Russell 2000 Value (IWN, Financial) and VanEck Vectors Semiconductor (SMH, Financial).
Lowe’s
Buckingham invested in 54,782 shares of Lowe’s for an average price of $76.57 per share, giving it 0.53% portfolio space.
The North Carolina-based home improvement retailer has a market cap of $67.18 billion; its shares were trading around $80.67 on Wednesday with a price-earnings (P/E) ratio of 22.72, a price-book (P/B) ratio of 12.31 and a price-sales (P/S) ratio of 1.02.
The Peter Lynch chart below shows the stock is trading above its fair value.
GuruFocus ranked Lowe’s financial strength 5 of 10 and its profitability and growth 7 of 10. The company’s trailing dividend yield is 1.89% and its forward dividend yield is 2.01%. The dividend payout ratio is 41%.
Of the gurus invested in Lowe’s Barrow, Hanley, Mewhinney & Strauss has the largest position with 1.82% of outstanding shares. Other top guru shareholders include Larry Robbins (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Jim Simons (Trades, Portfolio) and Steven Cohen (Trades, Portfolio).
Juniper Networks
The guru purchased 15,604 shares of Juniper Networks for an average price of $27.99 per share, expanding the portfolio 0.05%.
The California-based provider of communication equipment has a market cap of $10.24 billion; its shares were trading around $27.32 on Wednesday with a P/E ratio of 16.36, a P/B ratio of 2.01 and a P/S ratio of 2.03.
According to the Peter Lynch chart below, the stock is trading about evenly with its fair value.
GuruFocus ranked Juniper’s financial strength 6 of 10 and its profitability and growth 8 of 10. The company’s trailing dividend yield is 1.46% and its forward dividend yield is 1.48%. The payout ratio is 24%.
With 5.32% of outstanding shares, Dodge & Cox is the company’s largest guru shareholder. Diamond Hill Capital (Trades, Portfolio), Simons, Joel Greenblatt (Trades, Portfolio), Ray Dalio (Trades, Portfolio) and Jeremy Grantham (Trades, Portfolio) also own the stock.
iShares Russell 2000 Value
Having previously exited a position in the iShares Russell 2000 Value ETF in the first quarter, Buckingham bought 10,321 shares for an average price of $117.89 per share. The trade had an impact of 0.15% on the portfolio.
The ETF tracks the investment results of an index of small-cap companies in the U.S. that have value characteristics. With a market cap of $9.2 billion, it was trading around $125.69 on Wednesday with a P/E ratio of 18.89 and a P/B ratio of 1.51.
VanEck Vectors Semiconductor
After closing a position in the VanEck Vectors Semiconductor ETF in the second quarter, Buckingham purchased 12,241 shares for an average price of $87.32 per share, expanding the portfolio 0.14%.
The ETF seeks to replicate the price and yield performance of the MVIS U.S. Listed Semiconductor 25 Index (MVSMHTR), which tracks the overall performance of companies in the semiconductor production and equipment industry. With a market cap of $1.5 billion, it was trading around $105.29 on Wednesday with a P/E ratio of 22.54 and a P/B ratio of 4.56.
Buckingham also added to many other ETF holdings during the quarter, including the SPDR Bloomberg Barclays 1-3 Month T-Bill (BIL, Financial), SPDR Select Sector Fund – Energy Select Sector (XLE, Financial), SPDR Select Sector Fund – Consumer Staples (XLP, Financial), iShares MSCI Italy Capped Index Fund (EWI), iShares MSCI Thailand Capped Investable Market Index Fund (THD, Financial) and iShares MSCI South Korea Capped Index Fund (EWY, Financial), among others.
Disclosure: I do not own any stocks mentioned.
