According to top-10 holdings statistics, a Premium feature of GuruFocus, T Rowe Price Equity Income Fund (Trades, Portfolio)’s top-five holdings as of the June quarter are Wells Fargo & Co. (WFC, Financial), General Electric Co. (GE, Financial), United Parcel Service Inc. (UPS, Financial), Qualcomm Inc. (QCOM, Financial) and Southern Co. (SO, Financial).
Fund background
The fund, part of Baltimore-based asset management firm T. Rowe Price Group Inc. (TROW, Financial), seeks long-term capital appreciation by investing in the stocks of well-established companies that are expected to pay above-average dividends and appear to be out of favor or undervalued. John Linehan started managing the fund in November 2015 following Brian Rogers’ departure.
As of June 30, the fund’s $18.47-billion equity portfolio contains 117 stocks with a quarterly turnover of 6%. The top-four sectors in terms of weight are financial services, health care, industrials and technology, with weights of 23.32%, 14.82%, 12.16% and 9.11%, respectively.
Wells Fargo
The fund owns 15.87 million shares of Wells Fargo (WFC, Financial), giving the position a 3.89% weight in the equity portfolio.
GuruFocus ranks the San Francisco-based bank’s financial strength 3 out of 10 on several warning signs, which include cash-to-debt and debt-to-equity ratios underperforming more than 60% of global competitors.
Gurus with large holdings in Wells Fargo include Dodge & Cox, PRIMECAP Management (Trades, Portfolio), and Chris Davis (Trades, Portfolio)’ Davis Select Advisors.
Shares of Wells Fargo traded around $48.78, showing that the stock is fairly valued based on Friday’s price-to-GF-Value ratio of 1.07.
General Electric
The fund owns 5,129,375 shares of General Electric (GE, Financial), giving the position 2.99% of equity portfolio space.
GuruFocus ranks the Boston-based conglomerate’s financial strength 3 out of 10 on several warning signs, which include a weak Altman Z-score of 1.39 and debt ratios that are underperforming more than 93% of global competitors.
Shares of GE traded around $104.37, showing that the stock is significantly overvalued based on Friday’s price-to-GF-Value ratio of 1.73.
United Parcel Service
The fund owns 2.345 million shares of United Parcel Service (UPS, Financial), giving the position 2.64% equity portfolio weight.
GuruFocus ranks the Atlanta-based logistics company’s profitability 8 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7 and profit margins and returns outperforming more than 70% of global competitors.
Other gurus with holdings in UPS include PRIMECAP Management (Trades, Portfolio), Pioneer Investments (Trades, Portfolio) and Bill Gates (Trades, Portfolio)’ foundation trust.
Shares of UPS traded around $192, showing that the stock is modestly overvalued based on Friday’s price-to-GF-Value ratio of 1.28.
Qualcomm
The fund owns 3.33 million shares of Qualcomm (QCOM, Financial), giving the position a 2.58% weight in the equity portfolio.
GuruFocus ranks the San Diego-based semiconductor company’s profitability 8 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7 and profit margins and returns outperforming more than 90% of global competitors.
Shares of Qualcomm traded around $146.16, showing that the stock is modestly overvalued based on Friday’s price-to-GF-Value ratio of 1.15.
Southern
The fund owns 7.2 million shares of Southern (SO, Financial), giving the position a 2.36% weight in the equity portfolio.
GuruFocus ranks the Atlanta-based utility company’s profitability 6 out of 10 on the back of profit margins outperforming more than 70% of global competitors despite returns on assets underperforming more than 56% of global regulated utility companies.
