Capital Growth Management, a money management firm co-founded by Ken Heebner (Trades, Portfolio), disclosed earlier this month that its top trades during the second quarter featured sales of Phillip Morris International Inc. (PM, Financial), The GEO Group Inc. (GEO, Financial) and CoreCivic Inc. (CXW, Financial) and new buys in Thor Industries Inc. (THO, Financial), Teradyne Inc. (TER, Financial) and Winnebago Industries Inc. (WGO, Financial).
The Boston-based firm makes bold and swift sector calls, making large bets based on Heebner's convictions. As of the quarter-end, the firm's $860 million equity portfolio contains 41 stocks, with 29 new holdings and a turnover ratio of 49%. The consumer cyclical sector occupies 53.90% of the equity portfolio while the materials and health care sectors have weights of 16.83% and 10.30%.
Phillip Morris
CGM sold 420,000 shares of Phillip Morris, reducing its equity portfolio 4.30%. Shares averaged $72.91 during the second quarter.
GuruFocus ranks the New York-based tobacco producer's profitability 8 out of 10 on the back of operating margins and Greenblatt returns on capital outperforming over 82% of global competitors. Despite this, Phillip Morris' three-year revenue growth rate underperforms over 56% of global tobacco producers.
The Geo Group
CGM sold 2.157 million shares of The Geo Group, reducing its equity portfolio 3.68%. Shares averaged $12.22 during the second quarter.
GuruFocus ranks the Boca Raton, Florida-based detention center REIT's financial strength 3 out of 10 on several warning signs, which include interest coverage and debt ratios that are underperforming over 75% of global competitors. Despite this, GEO's profitability ranks 7 out of 10 on the back of a three-star business predictability rank, suggesting good and consistent revenue growth.
CoreCivic
CGM sold 2.095 million shares of CoreCivic, reducing its equity portfolio 3.29%. Shares averaged $11.40 during the second quarter.
GuruFocus ranks the Nashville, Tennessee-based REIT's profitability 7 out of 10 on the back of returns outperforming over 68% of global competitors. Despite this, CoreCivic's financial strength ranks 4 out of 10, driven by a low Altman Z-score of 0.89 and a debt-to-equity ratio that underperforms 84.76% of global REITs, suggesting high use of financial leverage.
Thor Industries
CGM purchased 270,000 shares of Thor Industries, giving the position 3.34% weight in its equity portfolio. Shares averaged $77.34 during the second quarter.
GuruFocus ranks the Elkhart, Indiana-based recreational vehicle manufacturer's profitability 9 out of 10 on several positive investing signs, which include a 3.5-star business predictability rank and a Greenblatt return on capital and a three-year revenue growth rate that outperform approximately 90% of global competitors.
Teradyne
CGM purchased 315,000 shares of Teradyne, giving the holding 3.09% weight in its equity portfolio. Shares averaged $66.68 during the second quarter.
GuruFocus ranks the North Reading, Massachusetts-based semiconductor company's financial strength and profitability 8 out of 10 on several positive investing signs, which include a high Altman Z-score of 7.98, expanding operating margins and returns that are outperforming 97% of global competitors.
Winnebago
CGM purchased 395,000 shares of Winnebago, giving the position 3.06% weight in its equity portfolio. Shares averaged $50.58 during the second quarter.
GuruFocus ranks the Forest City, Iowa-based RV manufacturer's profitability 7 out of 10 on several positive investing signs, which include expanding operating margins and three-year revenue and earnings growth rates outperforming over 90% of global competitors. Despite this, net margins are outperforming just 56.75% of global vehicles and parts companies.
Disclosure: No positions.
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