Spiros Segalas (Trades, Portfolio), manager of the Chicago-based Harbor Capital Appreciation Fund, disclosed this week that his fund’s top five trades during the third quarter included a reduction in Apple Inc. (AAPL, Financial), which is the top holding of Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial). Other top trades included the selling of its positions in Union Pacific Corp. (UNP, Financial) and RingCentral Inc. (RNG, Financial), a new holding in UnitedHealth Group Inc. (UNH, Financial) and a boost in Airbnb Inc. (ABNB, Financial).
The fund seeks long-term capital appreciation by investing in mid-cap to large-cap companies that have strong balance sheets and high profitability potential. The fund applies rigorous research and visits with company management to understand a company’s business.
As of July, the fund’s $42.09 billion equity portfolio contains 52 stocks, with two new positions and a turnover ratio of 6%. The top four sectors in terms of weight are technology, consumer cyclical, communication services and financial services, with weights of 36.58%, 24.74%, 20.22% and 8.35%, respectively.
Apple
Segalas sold 2,570,135 shares of Apple (AAPL, Financial), slicing 14.85% of the position and impacting the equity portfolio by -0.83%. Shares averaged $133.96 during the third quarter; the stock is significantly overvalued based on Friday’s price-to-GF-Value ratio of 1.31.
GuruFocus ranks the Cupertino, California-based tech giant’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 96% of global competitors.
Berkshire owns 887,135,554 shares of Apple as of the second-quarter filing, dedicating 41.46% of its equity portfolio to the stake.
Other gurus with holdings in Apple include Ken Fisher (Trades, Portfolio), Pioneer Investments and Jeremy Grantham (Trades, Portfolio).
Union Pacific
Segalas sold 2,066,614 shares of Union Pacific (UNP, Financial), imapcting the equity portfolio by -1.13%. Shares averaged $221.83 during the third quarter; the stock is modestly overvalued based on Friday’s price-to-GF-Value ratio of 1.11.
GuruFocus ranks the Omaha, Nebraska-based railroad 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 1.80% per year on average over the past five years and is outperforming more than 97% of global competitors.
RingCentral
Segalas sold 1,271,203 shares of RingCentral (RNG, Financial), impacting the equity portfolio by -1%. Shares averaged $271.68 during the third quarter; the stock is modestly undervalued based on Friday’s price-to-GF-Value ratio of 0.78.
GuruFocus ranks the Belmont, California-based software company’s financial strength 3 out of 10 on the back of debt ratios underperforming more than 98% of global competitors despite the company having a strong Altman Z-score of 6.70.
UnitedHealth Group
Segalas purchased 769,219 shares of UnitedHealth Group (UNH, Financial), giving the position 0.75% of the total equity portfolio space. Shares averaged $408.28 during the third quarter; the stock is modestly overvalued based on Friday’s price-to-GF-Value ratio of 1.13.
GuruFocus ranks the Minnetonka, Minnesota-based health care plans provider’s profitability 8 out of 10 on several positive investing signs, which include a five-star business predictability rank and an operating margin that has increased approximately 4.20% per year on average over the past five years despite outperforming just over 62% of global competitors.
Airbnb
Segalas purchased 2,751,370 shares of Airbnb (ABNB, Financial), giving the shares 0.94% of the total equity portfolio weight. Shares averaged $145.14 during the third quarter.
GuruFocus ranks the San Francisco-based online accommodation booking company’s financial strength 4 out of 10 on the back of leverage ratios underperforming more than 70% of global competitors.
