1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Sydnee Gatewood
Sydnee Gatewood
Articles (1628) 

Prem Watsa’s Top 5 Buys of the 4th Quarter

Canadian investor’s largest new holding is Fitbit

Billionaire investor Prem Watsa (Trades, Portfolio), leader of Fairfax Financial Holdings, disclosed 13 new holdings in his fourth-quarter portfolio on Friday.

Known as “Canada’s Warren Buffett (Trades, Portfolio),” the guru’s investment strategy mimics the practices of the Berkshire Hathaway (BRK.A)(BRK.B) CEO in that his insurance conglomerate purchases entire companies as well as invests its float in publicly traded companies.

Watsa’s five largest new purchases for the quarter were Fitbit Inc. (NYSE:FIT), The Madison Square Garden Co. (NYSE:MSG), Restaurant Brands International Inc. (NYSE:QSR), Colliers International Group Inc. (NASDAQ:CIGI) and CVS Health Corp. (NYSE:CVS).

Fitbit

The guru invested in 2.15 million shares of Fitbit, allocating 0.69% of the equity portfolio to the stake. The stock traded for an average price of $5.93 per share during the quarter.

The San Francisco-based company, which produces a variety of wearable fitness trackers, has a $1.71 billion market cap; its shares were trading around $6.46 on Friday with a price-book ratio of 2.86 and a price-sales ratio of 1.09.

The median price-sales chart shows the stock is trading above its historical average, suggesting it is overpriced.

72db023ab5dc4eb84b11ca1e74a8d9b8.png

GuruFocus rated Fitbit’s financial strength 5 out of 10 and its profitability 4 out of 10.

Of the gurus invested in the company, Jim Simons (Trades, Portfolio)’ Renaissance Technologies has the largest stake with 2.28% of outstanding shares. Chase Coleman (Trades, Portfolio) and Steven Cohen (Trades, Portfolio) are also shareholders.

Madison Square Garden

Watsa picked up 8,000 shares of Madison Square Garden, dedicating 0.12% of the equity portfolio to the position. During the quarter, the stock traded for an average price of $275.64 per share.

The New York-based company, which is an entertainment and sports holding company, has a market cap of $7.32 billion; its shares were trading around $305.81 on Friday with a price-book ratio of 2.75 and a price-sales ratio of 4.49.

According to the median price-sales chart, the stock is overvalued.

0836aac089b45f3ab3837a4f4e1bc554.png

Madison Square Garden’s financial strength was rated 6 out of 10 by GuruFocus. Its profitability scored a 4 out of 10 rating.

With 3 of outstanding shares, Mario Gabelli (Trades, Portfolio) is the company’s largest guru shareholder. Ron Baron (Trades, Portfolio), John Rogers (Trades, Portfolio), Cohen, First Pacific Advisors (Trades, Portfolio) and Michael Price (Trades, Portfolio) also have positions in the stock.

Restaurant Brands International

The investor established a 37,000-share holding of Restaurant Brands International, giving it 0.12% space in the equity portfolio. Shares traded for an average price of $66.81 during the quarter.

The Canadian company, which owns several fast-food chains like Tim Hortons, Popeyes Louisiana Kitchen and Burger King, has a $20 billion market cap; its shares were trading around $66.97 on Friday with a price-earnings ratio of 28.31, a price-book ratio of 12.72 and a price-sales ratio of 5.61.

Based on the Peter Lynch chart, the stock appears to be overvalued.

4920bd04688ca92000f70daeb43cbd51.png

GuruFocus rated Restaurant Brands’ financial strength 3 out of 10. Its profitability fared a bit better, scoring a 6 out of 10 rating.

Bill Ackman (Trades, Portfolio) has the largest position in the company with a 6% stake. Other guru shareholders are Warren Buffett (Trades, Portfolio), Cohen, PRIMECAP Management (Trades, Portfolio), Lee Ainslie (Trades, Portfolio), Louis Moore Bacon (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Ray Dalio (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio) and Philippe Laffont (Trades, Portfolio).

Colliers International Group

Watsa purchased 25,000 shares of Colliers International Group, expanding the equity portfolio by 0.10%. The stock traded for an average per-share price of $72.07 during the quarter.

The Toronto-based real estate company has a market cap of $3.63 billion; its shares were trading around $90.88 on Friday with a price-earnings ratio of 35.51, a price-book ratio of 7.13 and a price-sales ratio of 1.2.

The Peter Lynch chart suggests the stock is overvalued.

74c0e6030becccf817598107caa197bb.png

Colliers’ financial strength was rated 5 out of 10 by GuruFocus, while its profitability scored a 7 out of 10 rating.

Of the gurus invested in Colliers, Simons’ firm has the largest holding with 3.23% of outstanding shares. Chuck Royce (Trades, Portfolio), Jeff Auxier (Trades, Portfolio) and Jones also have positions in the stock.

CVS Health

The guru bought 26,500 shares of CVS Health, impacting the equity portfolio by 0.10%. The stock traded for an average price of $70.48 per share during the quarter.

The drugstore chain, which is headquartered in Woonsocket, Rhode Island, has a $91.86 billion market cap; its shares were trading around $70.47 on Friday with a price-earnings ratio of 13.84, a price-book ratio of 1.46 and a price-sales ratio of 0.37.

According to the Peter Lynch chart, the stock is undervalued.

c774e1b5762112e662dd6c9c2399a13a.png

GuruFocus rated CVS Health’s financial strength 4 out of 10 and its profitability 9 out of 10.

With 1.58% of outstanding shares, Dodge & Cox is the company’s largest guru shareholder. Other top investors include the Vanguard Health Care Fund (Trades, Portfolio), Barrow, Hanley, Mewhinney & Strauss, PRIMECAP, Bill Nygren (Trades, Portfolio), the T Rowe Price Equity Income Fund (Trades, Portfolio), Pioneer, Richard Pzena (Trades, Portfolio), Charles Brandes (Trades, Portfolio) and Chris Davis (Trades, Portfolio).

Additional trades and portfolio composition

During the quarter, Watsa also established positions in KKR & Co. Inc. (NYSE:KKR), Dine Brands Global Inc. (NYSE:DIN), Loral Space & Communications Inc. (NASDAQ:LORL), Penn National Gaming Inc. (NASDAQ:PENN), TransAlta Corp. (NYSE:TAC), Culp Inc. (NYSE:CULP), The Middleby Corp. (MIDD) and Osisko Gold Royalties Ltd. (OR).

The guru’s $2.03 billion equity portfolio, which is composed of 41 stocks, is largely invested in the industrials sector, followed by smaller positions in the technology and real estate spaces.

39a401fed8ed0a1c45b8657150dbbe61.png

Disclosure: No positions.

Read more here:

Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.

About the author:

Sydnee Gatewood
I am the editorial director at GuruFocus. I have a BA in journalism and a MA in mass communications from Texas Tech University. I have lived in Texas most of my life, but also have roots in New Mexico and Colorado. Follow me on Twitter! @gurusydneerg

Rating: 5.0/5 (2 votes)

Voters:

Comments

Please leave your comment:



Performances of the stocks mentioned by Sydnee Gatewood


User Generated Screeners


pjmason14Momentum
pascal.van.garsseHigh FCF-M2
kosalmmuse6
kosalmmuseBest one1
DBrizanall 2019Feb26
kosalmmuseBest one
DBrizanall 2019Feb25
kosalmmuseNice
kosalmmusehan
MsDale*52-Week Low
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
/* */