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GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength : 4/10

GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth : 3/10

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» PCP's 10-Y Financials

Financials (Next Earnings Date: 0)

Revenue & Net Income
Cash & Debt
Operating Cash Flow & Free Cash Flow
Operating Cash Flow & Net Income

» Details

Guru Trades

Q2 2015

PCP Guru Trades in Q2 2015

Michael Price 23,000 sh (New)
Jana Partners 2,471,385 sh (New)
Chris Davis 2,011,431 sh (New)
Jim Simons 20,700 sh (New)
Jeff Auxier 25,256 sh (+84.20%)
Scott Black 45,950 sh (+10.90%)
Wallace Weitz 396,524 sh (+4.94%)
Lou Simpson 1,374,773 sh (+1.67%)
Mario Gabelli 752,077 sh (+1.27%)
Tom Russo 31,465 sh (+0.29%)
First Eagle Investment 900 sh (unchged)
Prem Watsa 2,000 sh (unchged)
Warren Buffett 4,200,792 sh (unchged)
Bill Nygren 1,000,000 sh (unchged)
Daniel Loeb Sold Out
Paul Tudor Jones Sold Out
Jeff Ubben Sold Out
Pioneer Investments 620,912 sh (-0.23%)
Ruane Cunniff 3,512,391 sh (-0.43%)
Ron Baron 30,190 sh (-9.67%)
George Soros 22,500 sh (-10.00%)
Westport Asset Management 212,105 sh (-12.39%)
Joel Greenblatt 102,497 sh (-14.60%)
Jeremy Grantham 685,734 sh (-14.70%)
Steven Cohen 78,600 sh (-60.62%)
Ray Dalio 3,656 sh (-86.43%)
» More
Q3 2015

PCP Guru Trades in Q3 2015

John Paulson 1,000,000 sh (New)
Paul Tudor Jones 176,293 sh (New)
Jeff Auxier 33,936 sh (+34.37%)
Wallace Weitz 440,563 sh (+11.11%)
Ruane Cunniff 3,533,754 sh (+0.61%)
Warren Buffett 4,200,792 sh (unchged)
First Eagle Investment 900 sh (unchged)
Jana Partners Sold Out
Jim Simons Sold Out
Bill Nygren Sold Out
Steven Cohen Sold Out
Ray Dalio Sold Out
Ron Baron Sold Out
Prem Watsa Sold Out
Tom Russo 30,820 sh (-2.05%)
Scott Black 44,941 sh (-2.20%)
Mario Gabelli 697,808 sh (-7.22%)
Westport Asset Management 177,205 sh (-16.45%)
Jeremy Grantham 558,467 sh (-18.56%)
Pioneer Investments 439,335 sh (-29.24%)
George Soros 13,000 sh (-42.22%)
Michael Price 12,500 sh (-45.65%)
Lou Simpson 90,692 sh (-93.40%)
Joel Greenblatt 1,534 sh (-98.50%)
Chris Davis 1,320 sh (-99.93%)
» More
Q4 2015

PCP Guru Trades in Q4 2015

Prem Watsa 4,300 sh (New)
Ruane Cunniff 4,732,708 sh (+33.93%)
Jeremy Grantham 638,555 sh (+14.34%)
Paul Tudor Jones 180,754 sh (+2.53%)
Mario Gabelli 700,160 sh (+0.34%)
Chris Davis 1,320 sh (unchged)
Michael Price 12,500 sh (unchged)
Warren Buffett 4,200,792 sh (unchged)
Lou Simpson Sold Out
George Soros Sold Out
John Paulson Sold Out
Scott Black Sold Out
Joel Greenblatt 1,533 sh (-0.07%)
Wallace Weitz 428,851 sh (-2.66%)
Jeff Auxier 32,831 sh (-3.26%)
Pioneer Investments 409,110 sh (-6.88%)
Westport Asset Management 132,144 sh (-25.43%)
First Eagle Investment 380 sh (-57.78%)
Tom Russo 3,395 sh (-88.98%)
» More
Q1 2016

PCP Guru Trades in Q1 2016

Jeremy Grantham Sold Out
Ruane Cunniff Sold Out
First Eagle Investment Sold Out
Mario Gabelli Sold Out
Pioneer Investments Sold Out
Tom Russo Sold Out
Westport Asset Management Sold Out
Chris Davis Sold Out
Wallace Weitz Sold Out
Prem Watsa Sold Out
Jeff Auxier Sold Out
Warren Buffett Sold Out
Michael Price Sold Out
Paul Tudor Jones Sold Out
Joel Greenblatt Sold Out
» More
» Details

Insider Trades

Latest Guru Trades with PCP

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Business Description

Industry: Industrial Products » Metal Fabrication  
Traded in other countries:PC9.Germany,

Precision Castparts Corp was incorporated in the State of Oregon. The Company is a manufacturer of complex metal components and products provides high-quality investment castings, forgings and fasteners/fastener systems for critical aerospace and power applications. It also provides investment castings and forgings for general industrial, armament, medical and other applications; nickel alloys and mill forms, as well as cobalt alloys, for the aerospace, chemical processing, oil and gas, pollution control and other industries; seamless pipe for coal-fired, industrial gas turbine, and nuclear power plants, as well as oil and gas applications; fasteners for automotive and general industrial markets; specialty alloys for the investment casting industry; refiner plates, screen cylinders and other products for the pulp and paper industry; metal-injection-molded and ThixoFormedparts for automotive and other markets; grinder pumps and affiliated components for low pressure sewer systems; critical auxiliary equipment and gas monitoring systems for the power generation industry; and metalworking tools for the fastener market and other applications. It manufactures complex metal components and products in three main business segments: Investment Cast Products, Forged Products and Fastener Products. The Company's Investment Cast Products segment manufactures investment castings for aircraft engines, IGT engines, airframes, medical prostheses, armament, unmanned aerial vehicles and other industrial applications. The segment also provides alloys to PCC's investment casting operations, as well as to other investment casting companies. It manufactures forged components for the aerospace and power generation markets. Forged Products' aerospace and IGT sales are mainly derived from the same large engine customers served by the Investment Cast Products segment, with additional aerospace sales to manufacturers of landing gear and airframes. Therefore, the dynamics of the aerospace and IGT markets, as described in the Investment Cast Products section above, are virtually the same for Forged Products. It manufactures forged components for the aerospace and power generation markets. Forged Products' aerospace and IGT sales are mainly derived from the same large engine customers served by the Investment Cast Products segment, with additional aerospace sales to manufacturers of landing gear and airframes. Therefore, the dynamics of the aerospace and IGT markets, as described in the Investment Cast Products section above, are virtually the same for Forged Products. The Company's main competitors are Ladish Co., a subsidiary of Allegheny Technologies, Inc., Fortech, S.A. and Thyssen AG for aerospace turbine products, Alcoa Inc. and Firth Rixson Limited for aerospace structural products, Vallourec & Mannesmann Tubes and Sumitomo Corporation for energy products and Allegheny Technologies, Inc., Carpenter Technology Corporation, Haynes International, Inc., an

Guru Investment Theses on Precision Castparts Corp

Mario Gabelli Comments on Precision Castparts Corp - Jan 29, 2016

Precision Castparts Corp. (1.9%) (PCP – $232.01 – NYSE) (NYSE:PCP), based in Portland, Oregon, manufactures complex metal components and products for the aerospace, power, and general industrial markets. On August 10, 2015, the company announced that it would be purchased by Berkshire Hathaway for $235 cash per share in a merger worth $32.3 billion. The transaction is expected to close in the first quarter of 2016, after receiving shareholder and regulatory approvals.

From Mario Gabelli (Trades, Portfolio)'s ABC Fund Merger and Arbitrage shareholder letter for the fourth quarter 2015.

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Wallace Weitz Comments on Precision Castparts Corp - Oct 27, 2015

Precision Castparts Corp (NYSE:PCP) is a manufacturer of complex metal components and products that provides investment castings, forgings and fasteners/ fastener systems for critical aerospace and power applications. On August 10th, Berkshire Hathaway announced an agreement to purchase Precision Castparts (NYSE:PCP) for $235/share, or roughly $37.2 billion including debt (Berkshire’s largest ever acquisition). While the transaction provides a boost to the Fund’s near-term performance, Berkshire is buying Precision at a modest discount to our base estimate of intrinsic value. Losing a long-term compounder early on in our investment horizon is disappointing, but the silver lining in this transaction is that we will continue to own PCP indirectly through our position in Berkshire.

From Wallace Weitz (Trades, Portfolio)'s 3Q 2015 commentary.

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Sequoia Fund Comments on Precision Castparts - Aug 27, 2015


Could you update us on Precision Castparts (NYSE:PCP)? I know that the stock underperformed in 2014. I know it was kind of slowing down. And in 2015, it preannounced a couple quarters back to back. I was wondering if you could update us on that and if you still see compelling value there.

Greg Steinmetz:

We do see compelling value, but it has been a disappointment. It was supposed to earn $16 a share in the fiscal year that we just started. Instead, management is guiding to something like $13. The difficulty has been confined largely to the forged product segment, which is a very high fixed cost business. So when volume goes against you, you really feel it in the margin. We saw a 900 basis point drop in the margin of that segment last quarter. Furthermore, the oil & gas market has gone against Precision. Management had big plans for the oil & gas business, making very large diameter pipes that are highly resistant to corrosion. Precision is the only company on earth that can make that kind of pipe. Management thought that whatever happens with the oil & gas market, the company would be ready, and it would still be able to sell this pipe because of its compelling value. That did not happen, and the company was late to restructure that business and cut costs. The restructuring is now completed; so things should get a little better. Management was expecting $400 million in revenue out of that pipe business last year and only got $200 million, and it will probably be similar this year.

Another thing that has hurt is that Rolls-Royce is aggressively trying to take inventory out of its system. Rolls had too much inventory because managers were worried about not being able to meet delivery schedules and overdid it on inventory. Now they are cutting back the other way. There have been some other issues. Precision makes a lot of parts for the military. Military spares are down 35%. That was not something that the company foresaw happening in the current fiscal year.

That $16 a share was a number that was derived three years ago and as recently as six months ago management was still talking about $16 a share for this year. But lately management recognized that the world had changed and decided to throw in the towel. In addition to the restructuring I mentioned, the company also wrote down some inventory. This year, Precision thinks it is going to make about $13. I think that is a conservative number. Time will tell.

What we like about Precision and why we are keeping it is, as I mentioned, that it is the only company in the world that can make these large diameter highly corrosive resistant pipes. Precision is also far and away the leader in making powdered metal components that are used in large jet engines. It is the only company that can make certain large structural castings, and there are some other things that only Precision can supply. That gives the company a lot of leverage over its customers. Management is not afraid to use it. So it has a very strong competitive position. We also have what should be a growing market for aerospace.

I was with Boeing (BA) management this week — the company is talking about raising the monthly unit deliveries of the narrow body 737 from 42 a month now to 47, and then to 50-something. That could even go to 60 because the backlog is so big, and there is still an enormous appetite even in China — which, as you know, has a soft economy — to get these planes and get them now. The 787 has gone from 10 a month to 12 and that is going to go to maybe 14. So there is growth there. Precision is seeing that in some of its segments. The company will not see it in other areas because of de-stocking at Rolls-Royce. And the build rate for the 747 is being dialed back. Also there is a transition going on from the old models of the 737 and the Airbus narrow body, the A320, from the current generation to a re-engined version. Precision has had to absorb a lot of development costs along the way as that transition has taken place. But now it is coming to an end.

One thing that I think worries people is that, okay, aerospace is going to be a growing market, but is Precision losing share? We all know that because of Precision’s arrogance in the way it treats its customers — raising prices and making demands on them — they would like to cut Precision down to size. So is there a case of customers taking market share away from Precision and giving it to Alcoa and others? I have looked under as many rocks as I can think of to try to get to the bottom of this and I am not finding the evidence. Maybe I am looking under the wrong rocks, but the fact that I have not turned anything up and the fact that the customers buy under long term contracts which they are locked into, and the fact that competitors are not giving me any examples of how they have taken share from Precision make me think we are okay on the market share question.

If Precision can preserve market share in a growing market, we should be okay, which is why we are still holding the stock. Plus at its current price it is not expensive. It trades at a discount to some other of the big names in aerospace. Before it always traded at a premium.

From Ruane, Cunniff & Goldfarb Investor Day 2015 Transcript Part I.

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Westport Select Cap Fund Comments on Precision Castparts Corp - May 29, 2015

Precision Castparts (PCP) has experienced weakness in demand from one of its important jet engine customers and softness in its less important energy-related businesses. As a result, management was forced to withdraw its long-standing estimate of $16.00 per share earnings for fiscal 2016. On its earnings call for fiscal 2015, ended March 31, management is expected to lay out revised forecasts for the new year as well as long-term goals.

From Westport Asset Management (Trades, Portfolio)’s Westport Select Cap Fund Q1 2015 Commentary.

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Bill Nygren Comments on Precision Castparts Corp - Apr 09, 2015

Precision Castparts Corp. (PCP - $212)

Precision Castparts Corp. (NYSE:PCP) is a manufacturer of complex metal components and products, including castings, forgings, fasteners and aerostructures for aerospace, power generation and general industrial applications. Precision Castparts enjoys what we believe is an outstanding corporate culture and is led by a long-tenured CEO who is known for aggressively pursuing operating efficiencies. For many years, the company’s stock traded at a significant premium to other aerospace and industrial peers, but recent weakness has brought the share price to attractive levels relative to these industry groups and the S&P 500. We believe the current valuation of less than 15x earnings is overly punitive, considering PCP’s organic growth prospects and the company’s ability to add value through acquisitions. PCP is providing more components on key new airplanes, which should allow the company to outgrow its end markets. In addition, management projects $4 billion-$6 billion of acquisition opportunities over the next couple of years with return characteristics similar to its existing business. Finally, the company’s unique technical and process capabilities, coupled with its efficiently run operations, should allow it to continue to generate above-average margins. We are pleased to have the opportunity to add shares of what we consider a best-in-class company at a price that implies it is only average.

From Bill Nygren (Trades, Portfolio)’s Oakmark Fund - 1Q 2015 Letter.

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Top Ranked Articles about Precision Castparts Corp

Paul Tudor Jones Trims Facebook, Precision Castparts The guru's largest 1st-quarter sales
Paul Tudor Jones (Trades, Portfolio) formed Tudor Investment Corporation, the first of the Tudor Group companies, in 1980. The Tudor Group manages assets across fixed income, currency, equity and commodity asset classes and related derivative instruments in the global markets for an international clientele. The following are his largest sales during the first quarter. Read more...
John Paulson Sells Allergan, Precision Castparts, AIG Top sales by the investor during the 4th quarter
John Paulson (Trades, Portfolio) is the president and portfolio manager of Paulson & Co. Inc. Paulson was ranked by Absolute Return Magazine as the third-largest hedge fund in the world managing approximately $29 billion in merger, event and distressed strategies. The following are the guru's largest sales during the fourth quarter of 2015. Read more...



Dividend & Buy Back

Dividend Yield % 0.05
PCP's Dividend Yield % is ranked lower than
99% of the 1736 Companies
in the Global Metal Fabrication industry.

( Industry Median: 1.80 vs. PCP: 0.05 )
Ranked among companies with meaningful Dividend Yield % only.
PCP' s Dividend Yield % Range Over the Past 10 Years
Min: 0  Med: 0 Max: 0.05
Current: 0.05
Dividend Payout Ratio 0.01
PCP's Dividend Payout Ratio is ranked higher than
100% of the 1088 Companies
in the Global Metal Fabrication industry.

( Industry Median: 0.35 vs. PCP: 0.01 )
Ranked among companies with meaningful Dividend Payout Ratio only.
PCP' s Dividend Payout Ratio Range Over the Past 10 Years
Min: 0  Med: 0 Max: 0.01
Current: 0.01
Forward Dividend Yield % 0.05
PCP's Forward Dividend Yield % is ranked lower than
100% of the 1684 Companies
in the Global Metal Fabrication industry.

( Industry Median: 1.85 vs. PCP: 0.05 )
Ranked among companies with meaningful Forward Dividend Yield % only.
5-Year Yield-on-Cost % 0.05
PCP's 5-Year Yield-on-Cost % is ranked lower than
99% of the 2130 Companies
in the Global Metal Fabrication industry.

( Industry Median: 2.27 vs. PCP: 0.05 )
Ranked among companies with meaningful 5-Year Yield-on-Cost % only.
PCP' s 5-Year Yield-on-Cost % Range Over the Past 10 Years
Min: 0  Med: 0 Max: 0
Current: 0.05

Valuation & Return


More Statistics

Revenue (TTM) (Mil) $9,662
EPS (TTM) $ 9.47
Short Percentage of Float1.91%
52-Week Range $187.00 - 234.99
Shares Outstanding (Mil)137.59

Analyst Estimate

Mar16 Mar17 Mar18 Mar19
Revenue (Mil $) 9,986 10,497 11,134 11,216
EPS ($) 12.43 13.74 15.21 15.61
EPS without NRI ($) 12.43 13.74 15.21 15.61
EPS Growth Rate
(Future 3Y To 5Y Estimate)
Dividends per Share ($) 0.15 0.15 0.16
» More Articles for PCP


Articles On GuruFocus.com
Berkshire Hathaway Is Still a Great Stock Buy Sep 12 2016 
Mario Gabelli Sells 50 Stakes in 1st Quarter May 06 2016 
John Paulson Sells Allergan, Precision Castparts, AIG Mar 30 2016 
Berkshire Hathaway Is Safe and Cheap Mar 23 2016 
Guru Stocks With High Business Predictability Feb 15 2016 
Prem Watsa's 5 Largest New Buys Feb 12 2016 
Westport Trims Nearly 39% of Stakes in Portfolio Feb 12 2016 
Mario Gabelli Comments on Precision Castparts Corp Jan 29 2016 
Warren Buffett Buys Phillips 66 for Fourth Consecutive Day Jan 12 2016 
Companies Reach Their Year-Long High Stock Prices Jan 12 2016 

More From Other Websites
[$$] Berkshire Hathaway Unit Buys German Pipe Component Maker Jan 24 2017
Berkshire Hathaway's Precision Castparts to Buy German Pipe Manufacturer Jan 23 2017
[$$] Berkshire Unit Buys German Pipe Component Maker Jan 23 2017
Robbins Geller Rudman & Dowd LLP Files Class Action Suit Against Precision Castparts Corp. Sep 02 2016
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Berkshire profit up 25 percent as insurance helps, BNSF weighs Aug 05 2016
Will Alcoa’s 2Q16 Margin Expansion Boost Its Valuation? Jul 20 2016
Arconic Isn’t Precision Castparts, and the Market Knows That! Jun 29 2016
Common Sense Says Market Will Hold Steady Jun 15 2016
Cramer: Buffett's Annual Report Is Chock-Full of Investable Ideas Feb 29 2016
Buffett Seeks More Takeovers, Likens Precision's CEO to Da Vinci Feb 27 2016
Even Amid Difficulties, Berkshire Book Value Increases Feb 27 2016
PRECISION CASTPARTS CORP Files SEC form 8-K, Other Events Jan 25 2016
EU clears Berkshire's acquisition of Precision Castparts Jan 06 2016
5 Stocks Which M&A Experts Pentwater Capital Management Are Heavily Betting On Dec 10 2015
Are Hedge Funds Right to be Bullish on Precision Castparts Corp. (PCP)? Dec 01 2015
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