On Feb. 5, First Eagle Investment (Trades, Portfolio) disclosed four new positions for fourth-quarter 2017: Caterpillar Inc. (CAT, Financial), Huntsman Corp. (HUN, Financial), MGM Resorts International (MGM, Financial) and Molina Healthcare Inc. (MOH, Financial).
Caterpillar
First Eagle invested in 305,393 shares of Caterpillar, a major construction equipment company. The company’s share price averaged $138.66 during the quarter.
The Deerfield, Illinois-based company reported $12.9 billion in revenue for the quarter, up approximately $3.3 billion from the prior-year quarter. CEO Jim Umpleby mentioned that Caterpillar started fiscal 2018 with “strong sales momentum” through high order rates, lean dealer inventories and increasing backlog. The company expects full-year 2018 adjusted earnings between $8.25 and $9.25 per share, which would outperform past year’s earnings by about $2 per share.
Huntsman
First Eagle invested in 1,172,810 shares of Huntsman, a global manufacturer of organic and inorganic chemical products. The company’s share price averaged $30.60 during the quarter.
Huntsman’s profitability ranks a modest 5 out of 10: although the company’s operating margin is near a 10-year high, margins have declined approximately 2% per year over the past five years.
MGM Resorts
First Eagle invested in 713,004 shares of MGM Resorts, one of the largest resort operators on the Las Vegas Strip. MGM’s share price averaged $32.19 during the quarter.
MGM Resorts operates a wide variety of properties on the Strip, including Bellagio, MGM Grand, Mandalay Bay, Mirage, Luxor and New York-New York. The company announced on Jan. 25 that MGM Cotai, the company’s second casino resort in Macau, will open in February.
MGM’s Strip revenues account for approximately 60% of total revenues, which have increased approximately 1.60% per year over the past five years. As the company also has a high Piotroski F-score of 7 and good operating margins, MGM’s profitability ranks 7 out of 10.
Molina Healthcare
First Eagle invested in 339,551 shares of Molina Healthcare, a company specializing in Medicaid-related solutions for low-income families. The company’s share price averaged $72.08 during the quarter.
Even though the company’s profit margins underperform competitors, Molina still has a profitability rank of 6 primarily due to expanding operating margins and consistent revenue growth.
See also
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Disclosure: The author has no positions in the stocks mentioned.
