First Eagle Investment (Trades, Portfolio) disclosed this week that its buys during the fourth quarter of 2019 included a new position in DaVita Inc. (DVA, Financial), a major health care holding of Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial).
2020 Value Conference Keynote Speaker Matthew McLennan leads the New York-based firm’s Global Value team and manages the Global Value, International Value, U.S. Value and Gold strategies. McLennan previously worked as co-portfolio manager for Goldman Sachs Asset Management in London, a subsidiary of Goldman Sachs Group Inc. (GS, Financial).
First Eagle invests using the conviction that absolute long-term performance more efficiently preserves capital than through attempts to compete with short-term movements of the broad indexes. Additionally, the firm strives to reduce risk through rigorous application of bottom-up fundamental analysis. First Eagle combines its analysis with on-site research through visits with company management.
As of quarter-end, First Eagle’s $36.54 billion equity portfolio contains 105 stocks, of which two represent new holdings. The top three sectors in terms of weight are materials, financial services and energy, with weights of 16.73%, 15.94% and 13.90%.
The firm’s top four buys for the quarter were position boosts in TechnipFMC PLC (FTI, Financial), Anthem Inc. (ANTM, Financial), C.H. Robinson Worldwide Inc. (CHRW, Financial) and Schlumberger Ltd. (SLB, Financial).
New buy: DaVita
First Eagle purchased 93,300 shares of DaVita, giving the position 0.02% weight in the equity portfolio. Shares averaged $66.71 during the quarter.
The Denver-based company operates kidney dialysis clinics around the U.S., treating over 220,000 patients with end-stage renal disease. GuruFocus ranks DaVita’s profitability 8 out of 10 on several positive investing signs, which include a three-star business predictability rank and an operating margin that has increased approximately 1.2% per year on average over the past five years and is outperforming over 78% of global competitors.
Buffett’s conglomerate has not released its fourth-quarter portfolio as the deadline is 45 days after the quarter ends. Other gurus with holdings in DaVita include Ray Dalio (Trades, Portfolio)’s Bridgewater Associates and Larry Robbins (Trades, Portfolio)’ Glenview Capital Management.
TechnipFMC
First Eagle added 5,189,029 shares of TechnipFMC, increasing the stake 19.16%. Shares averaged $20.79 during the quarter.
The U.K.-based company provides integrated deep-water offshore oil and gas development solutions, offering a wide range of subsea equipment, engineering and construction services. According to GuruFocus, TechnipFMC’s interest coverage and debt-to-equity ratio are underperforming more than half of global competitors, suggesting low financial strength.
Anthem
First Eagle added 340,886 shares of Anthem, increasing the position 20.5%. Shares averaged $276.42 during the quarter.
The Indianapolis-based company provides health insurance services to its members, which range from individuals to groups and government-sponsored programs. According to GuruFocus, Anthem’s net margin and three-year earnings growth rate are outperforming over 60% of global competitors, suggesting good profitability. Further, Anthem’s business predictability ranks four stars out of five on strong and consistent revenue and earnings growth over the past 10 years.
Other gurus with holdings in Anthem include Andreas Halvorsen (Trades, Portfolio) and the Vanguard Health Care Fund (Trades, Portfolio).
C.H. Robinson Worldwide
First Eagle added 1,172,814 shares of C.H. Robinson Worldwide, increasing the position 15.9%. Shares averaged $79.50 during the quarter.
The Eden Prairie, Minnesota-based company operates a wide range of logistics services, including truck brokerage, intermodal rail, air and ocean forwarding. GuruFocus ranks the company’s profitability 8 out of 10: C.H. Robinson’s return on assets is outperforming 93.48% of global competitors even though operating margins are underperforming 59.67% of global logistics companies.
C.H. Robinson’s valuation ranks 9 out of 10 on several signs of undervaluation, including a price-book ratio and a price-sales ratio both near a 10-year low.
Schlumberger
First Eagle added 2,017,669 shares of Schlumberger, increasing the position 7.09%. Shares averaged $35.85 during the quarter.
The Houston-based company supplies oil and gas products and services through a wide range of business groups, including reservoir characterization, drilling and production. GuruFocus ranks Schlumberger’s profitability 7 out of 10 on several positive investing signs, which include an operating margin that outperforms 62.20% of global competitors.
See also
We are pleased to have McLennan as our keynote speaker at our upcoming value conference. Other speakers include Win Murray from Oakmark Funds, Rhupal Bhansali from John Rogers (Trades, Portfolio)’ Ariel Investment and Jerome Dodson (Trades, Portfolio) from Parnassus Investments. Register now and receive $200 off the standard price. We hope to see you in Omaha!
Disclosure: No positions.
Read more here:
- Jerome Dodson’s Parnassus Fund Buys 2 Stocks in 4th Quarter
- Tom Gayner’s Top 5 Buys in the 4th Quarter
- Francisco Garcia Parames’ New Buys for the 4th Quarter
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