Legendary investor Robert Rodriguez has a concentrated portfolio. He uses an absolute value approach in reaching stocks. If he cannot find value, he holds cash. Currently he holds 35% of his fund in cash. When he buys a stock, it means that he really thinks it is a undervalued stock. These are his buys and sells in the last quarter.
Regarding to the elavated level of cash he holds, he wrote in his shareholder letter:
"Our liquidity level is the residual of investment opportunity. We do not attempt to forecast how much liquidity we should have. For many years, we had a minimal level of liquidity because attractive investment opportunities were quite abundant. This is not the case at the current time. As you may recall, we are an absolute value rather than relative value style investor. What this means is that we have a strict valuation methodology that does not shift with the winds of the stock or bond markets. We explained this philosophy in our initial shareholder letter in September 1984. This is what drives us in our investment selection process. Because we have had several takeovers and other stocks that performed extremely well."
"We are of the opinion that relative value investing can and will get you into investment trouble since it can be used to justify almost any purchase. We will not compromise our standards. Furthermore, we will not allow the market or what other funds may be doing influence us in our investment decision making. One does not know to what degree these other funds may be accepting an elevated level of investment risk. In our judgment, we do not believe there have been sufficient investment opportunities that might compensate us appropriately for the potential risks. The ratio of upside return versus downside risk, for the many investments we have evaluated, has been inadequate, in our opinion. "
Robert Rodriguez buys Western Digital Corp. during the 3-months ended 06/30/2007, according to the most recent filings of his investment company, FPA Capital. Robert Rodriguez owns 25 stocks with a total value of $1378.5 billion. These are the details of the buys and sells.
New Purchase: Western Digital Corp. (WDC)
Robert Rodriguez initiated holdings in Computer Hardware company Western Digital Corp.. His purchase prices were between $16.77 and $19.78, with an estimated average price of $18.3. The impact to his portfolio due to this purchase was 0.41%. His holdings were 292,000 shares as of 06/30/2007. Shares of Western Digital Corp. were traded at around $22.83.
Western Digital Corporation engages in the design, development, manufacture, and sale of hard disk drives worldwide. Its products include 3.5-inch, 2.5-inch, and 1.0-inch form factor drives. Western Digital Corp. has a market cap of $5.07 billion, it was traded at around $21.75 with P/E ratio of 10.93 and P/S ratio of 0.93.
Among other Gurus, Richard Aster Jr owns 1,557,800 shares as of 03/31/2007, an increase of 67.99%
of from the previous quarter. This position accounts for 0.7% of the $3.72
billion portfolio of Meridian Funds.
Reduced: Avnet Inc. (AVT)
Robert Rodriguez reduced to his holdings in Business Support Services company Avnet Inc. by 36.89%. His sale prices were between $38.3 and $43.12, with an estimated average price of $41.1. The impact to his portfolio due to this sale was 6.63%. Robert Rodriguez still held 3,152,600 shares as of 06/30/2007. Shares of Avnet Inc. were traded at around $43.78.
Avnet, Inc. distributes electronic components, enterprise network and computer products, software, and embedded subsystems primarily in Americas, the Middle East, Asia, Africa, and Europe. Avnet Inc. has a market cap of $6.54 billion, it was traded at around $44.33 with P/E ratio of 19.83 and P/S ratio of 0.44.
Avnet, Inc. Chairman and CEO Roy Vallee has been selling his shares. He sold 28,450 shares of AVT stock on 05/11/2007 at the average price of $43.01, the price of the stock has increased by 3.07% since.
Reduced: Radioshack Corp. (RSH)
Robert Rodriguez reduced to his holdings in Specialty Retailers company Radioshack Corp. by 22.45%. His sale prices were between $27.61 and $34.32, with an estimated average price of $31. The impact to his portfolio due to this sale was 2.19%. Robert Rodriguez still held 1,116,400 shares as of 06/30/2007. Shares of Radioshack Corp. were traded at around $30.25. RadioShack Corp. has a market cap of $4.1 billion, it was traded at around $30.09 with P/E ratio of 38.44 and P/S ratio of 0.88.
Among other Gurus, Robert Olstein owns 1,462,000 shares of Radioshack Corp. (RSH) as of 03/31/2007, a decrease of -39.37% of from the previous quarter. This position accounts for 2.16% of the $1.83 billion portfolio of Olstein Financial Alert Fund. Brian Rogers sold out his holdings in the quarter ended 06/30/2007. Chris Davis sold out his holdings in the quarter ended 03/31/2007. Richard Pzena sold out his holdings in the quarter ended 03/31/2007.