A growing cadre of gurus is buying up shares of two little known stocks of companies that posted gains out of the gate.
Altair Engineering Inc. (ALTR, Financial) and Loma Negra Cia Industria Argentina (LOMA, Financial), the largest cement producer of the emerging market, launched its initial public offering in the final months of the year, just in time for the gurus to stock up on shares. Gurus posted estimated gains of up to 37% on their investments, so far.
Altair Engineering has a current market cap of $813 million. The computer-aided engineering software company set its IPO at $13 a share. It sold 12 million shares, raising $156 million in gross proceeds. In its first week of trading, shares climbed 46% to $19, indicating a market cap of $1.2 billion.
Loma Negra currently has a market cap of $2.56 billion. The company reportedly raised $800 million through its public offering on Oct. 31. It reportedly sold 50 million American depository shares, representing five common domestic shares each at about $19 a share, filings show. At over $1 billion, it represented Argentina's largest IPO in 25 years, according to company leadership.
While cement products hit bottom during the 2008 recession, analysts say the industry is expected to be one of the fastest-growing sectors in the Argentine economy in the years ahead.
The third-largest economy in Latin America has been battling the negative effects of Brazil's major corruption scandals. Loma Negra's parent company is Intercement Brazil SA.
Argentine President Mauricio Marci has introduced new market-friendly policies that are drawing the interest of foreign investors.
Altair Engineering
Altair shares have risen 65% since trading kicked off three months ago.
The Michigan-based company was founded in 1985 and focuses on the development and application of simulation technology to synthesize and optimize designs and processes. It is known as as a provider of “enterprise-class engineering software.”
Tuesday trading show it was at $30.24 a share, up 2.23%.
Gurus who bought shares paid an average of $22 per share in the fourth quarter. Their total estimated gain is about 37% on the investment. Ron Baron (Trades, Portfolio) bought 2.1 million shares of Altair, which sit in 0.23% of his portfolio. PRIMECAP Management (Trades, Portfolio) bought 1 million shares, which sit in 0.02% of the portfolio. Chuck Royce (Trades, Portfolio) purchased 20,289 shares, GuruFocus records show.
GuruFocus ranks it 3 out of 10 in financial stability and profitability and growth.
Loma Negra
Baron kicked off the share-buying at 2.2 million shares of the Argentina-based cement supplier at an average price of $22 a share.
Its parent company is InterCement, one of the largest global producers of cement, limestone and related products.
Caxton Associates went home with 622,000 shares. Steven Cohen (Trades, Portfolio) took 65,000 shares and Stanley Druckenmiller (Trades, Portfolio) took home 150,000.
Loma Negra is up 1% since its initial public offering.
In late January, shares reached a high of $25 but have dropped to about $21.40 a share this month. On Tuesday, shares were trading at $21.44 a share, down 0.65%.
Its website says the company, founded in the 1920s, has provided cement and other related products in over half of the buildings in Argentina.
The company has a price-earnings ratio of 76.38 versus an industry median of 17.74. Its price-book ratio is 13.57 versus an industry median of 1.40. Its price-sales ratio is 4.33 versus an industry median of 1.08. The company does not pay a dividend.
Its revenue growth shot up by 50% in the last 12 months. EBITDA per share is a preliminary $1.50 per share. It posted a 19.95% operating margin in December 2017. GuruFocus ranks Loma Negra 4 out of 10 in financial strength and 6 of 10 in profitability and growth.
