Robert Olstein (Trades, Portfolio), chairman and chief investment officer of Olstein Capital Management, disclosed in regulatory portfolio filings that his firm’s top five trades during the fourth quarter of 2021 included the closure of its position in Lowe’s Companies Inc. (LOW, Financial), the reduction of its holdings in Dollar Tree Inc. (DLTR, Financial) and CVS Health Corp. (CVS, Financial) and boosts to its stakes in Generac Holdings Inc. (GNRC, Financial) and Mastercard Inc. (MA, Financial).
The Purchase, New York-based firm emphasizes a defense-first approach to investing. Olstein seeks companies that have high financial strength, offer low downside risk and are trading at a discount to fair value.
As of December 2021, the firm’s $838 million equity portfolio contains 102 stocks with a quarterly turnover ratio of 8%. The top four sectors in terms of weight are industrials, consumer cyclical, financial services and health care, representing 18.57%, 17.24%, 15.91% and 15.24% of the equity portfolio.
Lowe’s
Olstein sold all 27,000 shares of Lowe’s (LOW, Financial), trimming 0.67% of its equity portfolio.
Shares of Lowe’s averaged $238.68 during the fourth quarter; the stock is modestly overvalued based on Thursday’s price-to-GF Value ratio of 1.25.
GuruFocus ranks the Mooresville, North Carolina-based home improvement retail company’s profitability 9 out of 10 on several positive investing signs, which include a five-star business predictability rank and profit margins and returns that are outperforming more than 82% of global competitors.
Gurus with holdings in Lowe’s include Bill Ackman (Trades, Portfolio)’s Pershing Square and Tom Gayner (Trades, Portfolio)’s Markel Gayner Asset Management Corp.
Dollar Tree
Olstein sold 58,000 shares of Dollar Tree (DLTR, Financial), chopping 63.04% of the holding and 0.68% of its equity portfolio.
Shares of Dollar Tree averaged $122.44 during the fourth quarter; the stock is modestly overvalued based on Thursday’s price-to-GF Value ratio of 1.17.
GuruFocus ranks the Chesapeake, Virginia-based discount retail company’s profitability 7 out of 10 on the back of profit margins outperforming more than 77% of global competitors despite three-year earnings decline rates underperforming over 70% of global retail companies.
Other gurus with holdings in Dollar Tree include Chuck Akre (Trades, Portfolio)’s Akre Capital Management and PRIMECAP Management (Trades, Portfolio).
CVS Health
The firm sold 51,000 shares of CVS Health (CVS, Financial), trimming 28.81% of the position and 0.53% of its equity portfolio.
Shares of CVS averaged $92.68 during the fourth quarter; the stock is significantly overvalued based on Thursday’s price-to-GF Value ratio of 1.44.
GuruFocus ranks the Woonsocket, Rhode Island-based pharmaceutical retailer’s financial strength 4 out of 10 on the back of interest coverage and debt ratios underperforming more than 81% of global competitors despite the company having a solid Piotroski F-score of 5.
Generac
The firm purchased 11,750 shares of Generac (GNRC, Financial), increasing the position by 56.63% and its equity portfolio by 0.49%.
Shares of Generac averaged $414.31 during the fourth quarter; the stock is significantly overvalued based on Thursday’s price-to-GF Value ratio of 1.52.
GuruFocus ranks the Waukesha, Wisconsin-based power generation equipment manufacturer’s profitability 9 out of 10 on several positive investing signs, which include a four-star business predictability rank and profit margins and returns outperforming more than 88% of global competitors.
Mastercard
Olstein purchased 11,500 shares of Mastercard (MA, Financial), boosting the position by 153.33% and its equity portfolio by 0.49%.
Shares of Mastercard averaged $345.75 during the fourth quarter; the stock is fairly valued based on Thursday’s price-to-GF Value ratio of 1.02.
GuruFocus ranks the Purchase, New York-based credit card company’s profitability 10 out of 10 on several positive investing signs, which include a five-star business predictability rank, a high Piotroski F-score of 8 and profit margins and returns that outperform over 80% of global competitors.
