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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%.


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%.


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.


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.


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



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.


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.



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.


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.



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


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.


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.


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.


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!

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