Kahn Brothers' Top-Performing Stocks of 2021

Top-performing holdings include IDT and MBIA

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Jan 26, 2022
Summary
  • The portfolio’s top-performing stocks in 2021 included IDT and MBIA.
  • Other stocks with high gains include Pfizer and Assured Guaranty.
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According to current portfolio statistics, a Premium feature of GuruFocus, the top-performing stocks in

Kahn Brothers (Trades, Portfolio)’ portfolio during 2021 included IDT Corp. (IDT, Financial), MBIA Inc. (MBI, Financial), Patterson-UTI Energy Inc. (PTEN, Financial), Assured Guaranty Ltd. (AGO, Financial) and Pfizer Inc. (PFE, Financial).

Founded by the late Irving Kahn, the firm invests in out-of-favor stocks using bottom-up stock picking with a Benjamin Graham-style approach. The firm identifies stocks one at a time based on assets, operating performance and long-term fundamental business prospects.

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As of December 2021, the firm’s $728 million equity portfolio contains 43 stocks with a quarterly turnover ratio of 2%. The top three sectors in terms of weight are financial services, health care and energy, representing 37.91%, 34.29% and 15.39% of the equity portfolio.

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IDT

The firm owns 472,349 shares of IDT (

IDT, Financial), giving the position 2.87% weight in the equity portfolio.

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Shares of IDT traded around $36.53, up approximately 149.13% over the past year. The stock is significantly overvalued based on Wednesday’s price-to-GF Value ratio of 4.37.

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GuruFocus ranks the Newark, New Jersey-based telecommunication service company’s financial strength 6 out of 10 on the back of a Beneish M-score that signals possible earnings manipulation despite the company having a high Piotroski F-score of 8, a strong Altman Z-score of 4.87 and debt ratios that are outperforming more than 85% of global competitors.

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Other gurus with holdings in IDT include

Jim Simons (Trades, Portfolio)’ Renaissance Technologies and Jeremy Grantham (Trades, Portfolio)’s GMO.

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MBIA

The firm owns 4,978,900 shares of MBIA (

MBI, Financial), giving the stake 10.8% weight in the equity portfolio.

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Shares of MBIA traded around $13.48, up approximately 87.25% over the past 12 months. The stock is modestly overvalued based on Wednesday’s price-to-GF Value ratio of 1.19.

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According to GuruFocus, the Purchase, New York-based financial guaranty insurance company’s cash-to-debt ratio underperforms over 90% of global competitors, suggesting low financial strength.

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Patterson-UTI

The firm owns 5,956,377 shares of Patterson-UTI (

PTEN, Financial), giving the holding 6.91% equity portfolio weight.

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Shares of Patterson-UTI traded around $10.07, up approximately 66.93% over the past year. The stock is significantly overvalued based on Wednesday’s price-to-GF Value ratio of 1.81.

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GuruFocus ranks the Houston-based energy company’s financial strength 4 out of 10 on the back of a weak Altman Z-score of 1.08 and debt ratios that are underperforming more than 55% of global competitors.

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Assured Guaranty

The firm owns 1,435,845 shares of Assured Guaranty (

AGO, Financial), giving the position 9.9% equity portfolio weight.

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Shares of Assured Guaranty traded around $51.87, up approximately 43.62% over the past year. The stock is modestly overvalued based on Wednesday’s price-to-GF Value ratio of 1.23.

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GuruFocus ranks the insurance company’s financial strength 3 out of 10 on the back of interest coverage and debt ratios underperforming more than 82% of global competitors.

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Pfizer

The firm owns 1,017,928 shares of Pfizer (

PFE, Financial), giving the stake 8.26% equity portfolio weight.

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Shares of Pfizer traded around $52.63, up approximately 45.12% during the past 12 months. The stock is modestly undervalued based on Wednesday’s price-to-GF Value ratio of 0.83.

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GuruFocus ranks the New York-based drug manufacturer’s profitability 7 out of 10 on the back of three-year revenue and earnings decline rates underperforming more than 75% of global competitors despite profit margins and returns outperforming over 87% of global drug manufacturers.

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