The T Rowe Price Equity Income Fund (Trades, Portfolio), part of Baltimore-based T. Rowe Price Group Inc. (TROW, Financial), disclosed in a regulatory portfolio filing that its top five trades in the fourth quarter of 2021 included a new position in Citigroup Inc. (C, Financial), a boost to its The Walt Disney Co. (DIS, Financial) stake and reductions to its holdings of CF Industries Holdings Inc. (CF, Financial), Raymond James Financial Inc. (RJF, Financial) and Snap-on Inc. (SNA, Financial).
Managed by John Linehan, the fund seeks long-term capital appreciation through investments in large-cap companies that have a strong record of paying dividends and appear to be undervalued.
As of December 2021, the fund’s $18.88 billion equity portfolio contains 113 stocks, with three new positions and a turnover ratio of 3%. The top four sectors in terms of weight are financial services, health care, industrials and technology, representing 23.02%, 17.42%, 10.91% and 9.41% of the equity portfolio.
Citigroup
The fund purchased 1 million shares of Citigroup (C, Financial), giving the stake 0.32% equity portfolio weight.
Shares of Citigroup averaged $66.33 during the fourth quarter; the stock is fairly valued based on Tuesday’s price-to-GF Value ratio of 0.93.
GuruFocus ranks the New York-based bank’s financial strength 3 out of 10 on the back of debt ratios underperforming more than 75% of global competitors despite having a strong Piotroski F-score of 7.
Other gurus with holdings in Citigroup include Bill Nygren (Trades, Portfolio)’s Oakmark Fund and ValueAct Holdings LP (Trades, Portfolio).
Walt Disney
The fund purchased 420,000 shares of Walt Disney (DIS, Financial), increasing the position by 45.41% and its equity portfolio by 0.34%.
Shares of Walt Disney averaged $161 during the fourth quarter; the stock is modestly overvalued based on Tuesday’s price-to-GF Value ratio of 1.13.
GuruFocus ranks the Burbank, California-based entertainment giant’s financial strength 4 out of 10 on several warning signs, which include a low Altman Z-score of 2.19 and interest coverage and debt ratios that are underperforming over 70% of global competitors.
Other gurus with holdings in Walt Disney include Ken Fisher (Trades, Portfolio)’s Fisher Investments and Philippe Laffont (Trades, Portfolio)’s Coatue Asset Management.
CF Industries
The fund sold 1.56 million shares of CF Industries (CF, Financial), slashing 24.88% of the position and 0.48% of its equity portfolio.
Shares of CF Industries averaged $62.82 during the fourth quarter; the stock is fairly valued based on Tuesday’s price-to-GF Value ratio of 1.01.
GuruFocus ranks the Deerfield, Illinois-based nitrogen fertilizer manufacturer’s profitability 7 out of 10 on the back of a high Piotroski F-score of 8 and operating margins that are outperforming more than 90% of global competitors despite returns underperforming more than half of global agriculture companies.
Raymond James Financial
The fund sold 720,000 shares of Raymond James Financial (RJF, Financial), chopping 70.94% off the holding and 0.37% off its equity portfolio.
Shares of Raymond James Financial averaged $98.97 during the fourth quarter; the stock is significantly overvalued based on Tuesday’s price-to-GF Value ratio of 1.32.
GuruFocus ranks the Saint Petersburg, Florida-based capital market company’s profitability 6 out of 10 on the back of a five-star business predictability rank despite net margins and returns outperforming just over half of global competitors.
Snap-on
The fund sold 250,000 shares of Snap-on (SNA, Financial), slicing 60.24% of the position and 0.29% of its equity portfolio.
Shares of Snap-on averaged $213.62 during the fourth quarter; the stock is modestly overvalued based on Tuesday’s price-to-GF Value ratio of 1.16.
GuruFocus ranks the Kenosha, Wisconsin-based industrial company’s profitability 8 out of 10 on several positive investing signs, which include a four-star business predictability rank, a high Piotroski F-score of 8 and profit margins and returns that outperform more than 90% of global competitors.
