Gates Capital Management, Inc. recently filed their 13F report for the first quarter of 2022, which ended on 2022-03-31.
The 13F report details which stocks were in a guru’s equity portfolio at the end of the quarter, though investors should note that these filings are limited in scope, containing only a snapshot of long positions in U.S.-listed stocks and American depository receipts as of the quarter’s end. They are not required to include international holdings, short positions or other types of investments. Still, even this limited filing can provide valuable information.
Gates Capital Management, Inc. is an investment management firm based out of New York, New York. The company was originally established in 1996 by founder Jeffrey L. Gates, who continues to have an active role in the company acting as its managing partner and president. Gates Capital Management conducts its research internally and invests in the public equity, alternative, and fixed income markets on a global scale. The company utilizes a “systematic, risk averse and event-driven” approach, focusing on identifying risk and reward relationships in its investments. Gates Capital Management invests most heavily in the materials and consumer discretionary sectors, which each make up over a quarter of its total asset allocations, and also invests in the industrials, consumer staples, health care, and real estate sectors, in order of decreasing allocation. The firm’s equity investments focus on common stocks of public companies in three categories: event driven situations, such as corporate spinoffs, recapitalizations, financial restructurings, etc..; special situations; and credit focused equities. Gates Capital Management’s credit asset classes focus on larger issues such as distressed securities, generally senior secured claims where reorganization would mean a new debt instrument, and bank debts with an actively managed total return. The company keeps its holdings for 13.75 quarters on average and has had a most recent turnover rate of 20%. Gates Capital Management currently holds over $3.8 billion in total assets under management spread across 4 accounts, all of which are discretionary accounts. Although its total number of accounts has remained relatively stable in recent years, its total assets under management has been increasing, growing significantly from just over $300 million back in 2010 to well over 10 times that amount today. The company currently solely caters to pooled investment vehicles and takes advisory fees in the form of a percentage of assets and various performance based fees.
As of the latest 13F report, the guru’s equity portfolio contained 27 stocks valued at a total of $3,105,000,000. The top holdings were ESI(7.04%), VSTO(6.30%), and FTV(5.82%).
According to GuruFocus data, these were Gates Capital Management, Inc.’s top five trades of the quarter.
Fortive Corp
The guru established a new position worth 2,966,403 shares in NYSE:FTV, giving the stock a 5.82% weight in the equity portfolio. Shares traded for an average price of $65.7 during the quarter.
On 05/18/2022, Fortive Corp traded for a price of $58.295 per share and a market cap of $20,979,957,000. The stock has returned -17.29% over the past year.
GuruFocus gives the company a financial strength rating of 6 out of 10 and a profitability rating of 7 out of 10.
In terms of valuation, Fortive Corp has a price-earnings ratio of 32.71, a price-book ratio of 2.21, a price-earnings-to-growth (PEG) ratio of 10.49, a EV-to-Ebitda ratio of 19.99 and a price-sales ratio of 3.93.
The price-to-GF Value ratio is 0.75, earning the stock a GF Value rank of 10.
Stanley Black & Decker Inc
The guru established a new position worth 1,149,670 shares in NYSE:SWK, giving the stock a 5.18% weight in the equity portfolio. Shares traded for an average price of $165.54 during the quarter.
On 05/18/2022, Stanley Black & Decker Inc traded for a price of $116.695 per share and a market cap of $17,610,023,000. The stock has returned -41.34% over the past year.
GuruFocus gives the company a financial strength rating of 4 out of 10 and a profitability rating of 7 out of 10.
In terms of valuation, Stanley Black & Decker Inc has a price-earnings ratio of 13.95, a price-book ratio of 2.01, a price-earnings-to-growth (PEG) ratio of 12.11, a EV-to-Ebitda ratio of 14.38 and a price-sales ratio of 1.20.
The price-to-GF Value ratio is 0.62, earning the stock a GF Value rank of 8.
Axalta Coating Systems Ltd
The guru sold out of their 3,585,275-share investment in NYSE:AXTA. Previously, the stock had a 3.45% weight in the equity portfolio. Shares traded for an average price of $28.04 during the quarter.
On 05/18/2022, Axalta Coating Systems Ltd traded for a price of $25.815 per share and a market cap of $5,716,077,000. The stock has returned -21.91% over the past year.
GuruFocus gives the company a financial strength rating of 4 out of 10 and a profitability rating of 7 out of 10.
In terms of valuation, Axalta Coating Systems Ltd has a price-earnings ratio of 20.83, a price-book ratio of 4.19, a price-earnings-to-growth (PEG) ratio of 4.53, a EV-to-Ebitda ratio of 10.93 and a price-sales ratio of 1.32.
The price-to-GF Value ratio is 0.82, earning the stock a GF Value rank of 9.
XPO Logistics Inc
The guru sold out of their 1,191,047-share investment in NYSE:XPO. Previously, the stock had a 2.68% weight in the equity portfolio. Shares traded for an average price of $70.37 during the quarter.
On 05/18/2022, XPO Logistics Inc traded for a price of $48.445 per share and a market cap of $5,648,555,000. The stock has returned -36.61% over the past year.
GuruFocus gives the company a financial strength rating of 5 out of 10 and a profitability rating of 6 out of 10.
In terms of valuation, XPO Logistics Inc has a price-earnings ratio of 7.98, a price-book ratio of 3.53, a EV-to-Ebitda ratio of 5.34 and a price-sales ratio of 0.36.
The price-to-GF Value ratio is 0.75, earning the stock a GF Value rank of 10.
International Flavors & Fragrances Inc
The guru sold out of their 607,328-share investment in NYSE:IFF. Previously, the stock had a 2.66% weight in the equity portfolio. Shares traded for an average price of $133.04 during the quarter.
On 05/18/2022, International Flavors & Fragrances Inc traded for a price of $128.28 per share and a market cap of $32,723,750,000. The stock has returned -6.85% over the past year.
GuruFocus gives the company a financial strength rating of 5 out of 10 and a profitability rating of 7 out of 10.
In terms of valuation, International Flavors & Fragrances Inc has a price-earnings ratio of 58.91, a price-book ratio of 1.55, a EV-to-Ebitda ratio of 20.17 and a price-sales ratio of 2.63.
The price-to-GF Value ratio is 0.92, earning the stock a GF Value rank of 7.
Please note, the numbers and facts quoted are as of the writing of this article and may not factor in the latest trading data or company announcements.
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