Davis Select Advisors recently released its fourth-quarter 2020 portfolio update. Among the changes made during the quarter, the firm disclosed a new position in Viatris Inc. (VTRS, Financial), a position boost in Cigna Corp. (CI, Financial) and reductions in its holdings in Facebook Inc. (FB, Financial), Quest Diagnostics Inc. (DGX, Financial) and Alphabet Inc. (GOOGL, Financial)(GOOG, Financial).
Fund Chairman Chris Davis (Trades, Portfolio) manages the firm's Large Cap Value Portfolio and joins the research team for the firm's other portfolios. The Tucson, Arizona-based firm seeks long-term capital appreciation through investments in durable, well-managed businesses that can be purchased at value prices.
As of December 2020, the firm's $20.78 billion equity portfolio contains 109 stocks with a turnover ratio of 2%. The top four sectors in terms of portfolio weight are financial services, communication services, technology and consumer cyclical, with weights of 39.09%, 14.99%, 12.96% and 10.63%, respectively.
Viatris
The firm purchased 11,727,007 shares of Viatris (VTRS, Financial), giving the position 1.06% of the equity portfolio space. Shares averaged $16.33 during the fourth quarter. The stock may be a possible value trap based on Thursday's price-to-GF-Value ratio of 0.58.
According to the company's website, the Canonsburg, Pennsylvania-based drug manufacturer was formed through the merger of Mylan and Pfizer Inc. (PFE, Financial) subsidiary Upjohn. GuruFocus ranks the company's financial strength 4 out of 10. Although the company has a high Piotroski F-score of 7, interest coverage and debt ratios are underperforming over 80% of global competitors.
Other gurus with holdings in Viatris include the Vanguard Health Care Fund (Trades, Portfolio) and John Paulson (Trades, Portfolio)'s Paulson & Co.
Cigna
The firm added 435,956 shares of Cigna (CI, Financial), increasing the position by 135.29% and impacting the equity portfolio 0.44%. Shares averaged $196.59 during the fourth quarter.
GuruFocus ranks the Bloomfield, Connecticut-based insurance company's profitability 6 out of 10: The company has a high Piotroski F-score of 7 and three-year revenue and earnings growth rates that outperform over 70% of global competitors even though net margins and returns are underperforming over 60% of global insurance companies.
The firm sold 418,626 shares of Facebook (FB, Financial), trimming the position by 11.3% and impacting the equity portfolio 0.61%. Shares averaged $274.26 during the fourth quarter.
GuruFocus ranks the Menlo Park, California-based social media giant's profitability 10 out of 10 on several positive investing signs, which include a five-star business predictability rank and profit margins that outperform over 90% of global competitors.
Quest Diagnostics
The firm sold 818,355 shares of Quest Diagnostics (DGX, Financial), curbing the position 21.84% and impacting the equity portfolio 0.52%. Shares averaged $122.05 during the fourth quarter.
GuruFocus ranks the Secaucus, New Jersey-based medical diagnostics company's profitability 8 out of 10 on several positive investing signs, which include a 3.5-star business predictability rank and an operating margin that has increased approximately 5.40% per year on average over the past five years and is outperforming over 80% of global competitors.
Alphabet
The firm sold 62,212 Class C shares of Alphabet (GOOG, Financial), trimming the position by 8.31% and impacting the equity portfolio 0.51%.
GuruFocus ranks the Mountain View, California-based interactive media giant's financial strength 8 out of 10 on several positive investing signs, which include a strong Altman Z-score of 10.4 despite debt ratios outperforming just over 53% of global competitors.
Disclosure: Long Pfizer.
Read more here:
- Ruane Cunniff's Top 4 Trades in the 4th Quarter
- Jana Partners' Top 4 Trades of the 4th Quarter
- Top 4 Broadest-Owned Tech Stocks as of the 4th Quarter
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