Generation Investment Management, the firm founded by Al Gore (Trades, Portfolio) and David Blood, disclosed this week that its top five trades for the third quarter included a new position in Cisco Systems Inc. (CSCO, Financial), position boosts in Analog Devices Inc. (ADI, Financial) and Becton, Dickinson & Co. (BDX, Financial) and position reductions in Alphabet Inc. (GOOG, Financial) and Varian Medical Systems Inc. (VAR, Financial).
Gore, a former Vice President of the United States, co-founded the London-based firm in 2004. The firm focuses on a long-term investment perspective, focusing on sustainability within markets with companies that strategically manage environmental, social and corporate governance factors.
Generation selects stocks using a bottom-up, fundamental analysis investing strategy. As of third quarter-end, the firm's $18.84 billion equity portfolio contains 42 stocks, with three new positions and a turnover ratio of 12%. The top three sectors in terms of weight are technology, health care and industrials, representing 41.17%, 30.76% and 7.80% of the equity portfolio.
Cisco
Generation purchased 18,434,739 shares of Cisco, giving the stake 3.85% weight in the equity portfolio. Shares averaged $43.58 during the third quarter; the stock is modestly undervalued based on its price-to-GF Value ratio of 0.87.
GuruFocus ranks the San Jose, California-based hardware company's profitability 9 out of 10 on several positive investing signs, which include a five-star business predictability rank, a high Piotroski F-score of 8 and an operating margin that has increased approximately 3.70% per year on average over the past five years.
Other gurus with holdings in Cisco include Dodge & Cox, Ken Fisher (Trades, Portfolio) and PRIMECAP Management (Trades, Portfolio).
Analog Devices
Generation purchased 3,051,184 shares of Analog Devices, increasing the position 109.13% and the equity portfolio 1.89%. Shares averaged $117.13 during the third quarter.
GuruFocus ranks the Norwood, Massachusetts-based semiconductor company's profitability 8 out of 10 on the back of profit margins expanding over the past five years and outperforming over 90% of global competitors.
Becton, Dickinson & Co.
The firm purchased 987,408 shares of Becton, Dickinson & Co., increasing the holding 38.26% and the equity portfolio 1.22%. Shares averaged $251.49 during the third quarter.
GuruFocus ranks the New Jersey-based surgical products distributor's profitability 8 out of 10 on the back of a four-star business predictability rank and profit margins outperforming over 62% of global competitors.
Alphabet
Generation sold 356,005 Class C shares of Alphabet, trimming the position 39.54% and the equity portfolio 2.90%. Shares averaged $1,525.89 during the third quarter.
GuruFocus ranks the Mountain View, California-based online media giant's profitability 9 out of 10 on several positive investing signs, which include a four-star business predictability rank and a net profit margin that outperforms over 80% of global competitors.
Varian
The firm sold 1,958,623 shares of Varian, trimming the stake 59.95% and the equity portfolio 1.38%. Shares averaged $156.93 during the third quarter.
GuruFocus ranks the Palo Alto, California-based radiation technology designer's profitability 7 out of 10 on the back of profit margins outperforming over 70% of global competitors.
Disclosure: No positions.
Read more here:
- Philippe Laffont's Top 5 Buys of the 3rd Quarter
- Bruce Berkowitz's Top 4 Buys in the 3rd Quarter
- David Tepper Plunges Into PG&E in the 3rd Quarter
Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.
