Olstein Capital Management, the firm co-founded by Robert Olstein (Trades, Portfolio), disclosed this week that it established four new positions during the first quarter: Facebook Inc. (FB, Financial), Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial), Hologic Inc. (HOLX, Financial) and Automatic Data Processing Inc. (ADP, Financial).
The firm selects stocks using a “defense first” approach: Olstein peruses the company’s financial statements to access financial strength and downside risk. The firm seeks companies that generate more cash flow than necessary to sustain the business, avoid aggressive accounting practices and demonstrate fundamentals that show high financial strength.
As of quarter-end, the firm’s $455 million equity portfolio contains 101 stocks with a turnover ratio of 19%. The top three sectors in terms of weight are industrials, financial services and technology, with weights of 19.62%, 17.66% and 15.49%.
The firm purchased 30,400 shares of Facebook, giving the position 1.11% weight in the equity portfolio. Shares averaged $196.62 during the first quarter.
GuruFocus ranks the Menlo Park, California-based social media giant’s financial strength 8 out of 10 on the back of robust interest coverage, a strong Altman Z-Score of 13.11 and debt ratios that are outperforming over 60% of global competitors.
Gurus with large holdings in Facebook include Chase Coleman (Trades, Portfolio)’s Tiger Global Management and Andreas Halvorsen (Trades, Portfolio).
Berkshire Hathaway
The firm purchased 25,000 Class B shares of Berkshire Hathaway, giving the position 1% weight in the equity portfolio. Shares averaged $213.25 during the first quarter.
The Omaha, Nebraska-based conglomerate seeks “good companies at fair prices” according to co-managers Warren Buffett (Trades, Portfolio) and Charlie Munger (Trades, Portfolio)’s four-criterion investing approach: understandable business, high economic moat, competent management and attractive share prices.
Hologic
The firm purchased 90,000 shares of Hologic, giving the holding 0.69% weight in the equity portfolio. Shares averaged $47.87 during the first quarter.
The Marlborough, Massachusetts-based company manufactures proprietary products for women’s health. GuruFocus ranks the company’s profitability 6 out of 10 on several positive investing signs, which include a high Piotroski F-Score of 7 and a net profit margin that outperforms 81.13% of global competitors.
Automatic Data Processing
The firm purchased 18,000 shares of Automatic Data Processing, giving the holding 0.54% weight in the equity portfolio. Shares averaged $161.83 during the first quarter.
ADP provides a wide range of staffing and employment services, including payroll processing and benefits administration. GuruFocus ranks the company’s profitability 8 out of 10 on several positive investing signs, which include consistent revenue growth and an operating margin that has increased approximately 3.10% per year on average over the past five years and is outperforming over 90% of global competitors.
Disclosure: No positions.
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