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James Li
James Li
Articles (1450)  | Author's Website |

Ken Heebner's Top 5 Trades in the 3rd Quarter

Growth-oriented firm's top 3 trades are sells

Ken Heebner (Trades, Portfolio), co-founder of Capital Growth Management, disclosed this week that his firm's top five trades during the third quarter included sells in three companies: KB Home (NYSE:KBH), Teradyne Inc. (NASDAQ:TER) and Winnebago Industries Inc. (NYSE:WGO). With the proceeds, the firm initiated holdings in FedEx Corp. (NYSE:FDX) and Companhia Siderurgica Nacional (NYSE:SID).

The Boston-based money management firm seeks long-term capital appreciation through bold and swift sector calls based on Heebner's convictions. As of quarter-end, the firm's $957 million equity portfolio contains 46 stocks, with 27 new positions and a quarter-over-quarter turnover ratio of 47%.

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CGM's top three sectors in terms of weight are consumer cyclical, materials and real estate, representing 65.03%, 12.61% and 9.99% of the equity portfolio. The weight of the consumer cyclical sector increased approximately 11% from the previous-quarter weight of 53.9%.

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KB Home

CGM sold 1.63 million shares of KB Home, trimming the equity portfolio 5.81%. Shares averaged $34.87 during the third quarter; based on GuruFocus estimates, the firm has gained approximately 11.50% on the stock since the first quarter of 2009.

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GuruFocus ranks the Los Angeles-based homebuilder's profitability 6 out of 10: The company has a high Piotroski F-score of 8 and profit margins are expanding, though they outperform just over 55% of global competitors.

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Gurus with holdings in KB Home include Ken Fisher (Trades, Portfolio) and Pioneer Investments (Trades, Portfolio).

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Teradyne

Having purchased 315,000 shares during the second quarter, CGM sold the shares during the third quarter, trimming the equity portfolio 3.09%. Shares averaged $84.71 during the third quarter, up from the previous-quarter average of $66.68. Based on GuruFocus estimates, CGM gained approximately 20.44% on the stock since the first quarter of 2017.

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GuruFocus ranks the Massachusetts-based semiconductor company's financial strength and profitability 8 out of 10 on several positive investing signs, which include a strong Altman Z-score of 9.11 and an operating margin that has increased approximately 15.6% per year over the past five years and is outperforming over 94% of global competitors.

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Winnebago

The firm sold 395,000 shares of Winnebago, reducing the equity portfolio 3.06%. Shares averaged $57.61 during the third quarter; CGM has gained approximately 12.71% on the stock since the fourth quarter of 2019.

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GuruFocus ranks the Forest City, Iowa-based motor home manufacturer's profitability 7 out of 10 on the back of expanding operating margins and a three-year revenue growth rate that outperforms 81.23% of global competitors.

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FedEx

CGM purchased 113,000 shares of FedEx, giving the position 2.97% equity portfolio weight. Shares averaged $199.73 during the third quarter.

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GuruFocus ranks the Memphis, Tennessee-based logistics giant's financial strength 4 out of 10 on the back of debt ratios underperforming over 60% of global competitors despite a good Piotroski F-score of 6.

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Companhia Siderurgica Nacional

The firm purchased 9.4 million shares of Companhia Siderurgica Nacional, giving the position 2.89% weight in the equity portfolio. Shares averaged $2.54 during the third quarter.

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GuruFocus ranks the Brazilian steel company's profitability 7 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7 and an operating margin that has increased approximately 8.7% per year on average over the past five years and is outperforming over 96% of global competitors.

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Disclosure: No positions.

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About the author:

James Li
I am an editorial researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

Visit James Li's Website


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