Spiros Segalas (Trades, Portfolio), manager of the Harbor Capital Appreciation Fund, disclosed that the fund's top trades during its fiscal second quarter ending in April included new positions in Broadcom Inc. (AVGO, Financial) and Schlumberger Ltd. (SLB, Financial) and reductions to its holdings in Shopify Inc. (SHOP, Financial), Nvidia Corp. (NVDA, Financial) and Netflix Inc. (NFLX, Financial).
The Chicago-based fund seeks long-term capital appreciation by investing in companies that have catalysts for long-term growth rates above that of the market. Harbor Capital also looks for companies with high revenue growth, strong balance sheets and sustainable competitive advantages.
As of April 30, the fund’s fiscal second quarter end, the Harbor Capital Appreciation Fund’s $27.40 billion equity portfolio contains 55 stocks, with seven new positions and a quarterly turnover ratio of 9%. The top three sectors in terms of weight are technology, consumer cyclical and communication services, with weights of 33.78%, 29.89% and 10.63%.
Investors should be aware that portfolio updates for mutual funds do not necessarily provide a complete picture of a guru’s holdings. The data is sourced from the quarterly updates on the website of the fund(s) in question. This usually consists of long equity positions in U.S. and foreign stocks. All numbers are as of the quarter’s end only; it is possible the guru may have already made changes to the positions after the quarter ended. However, even this limited data can provide valuable information.
Broadcom
The fund invested in 733,076 shares of Broadcom (AVGO, Financial), giving the position a 1.48% equity portfolio weight.
Shares of Broadcom averaged $593.30 during the second quarter; the stock is modestly undervalued based on Friday’s price-to-GF-Value ratio of 0.87.
The San Jose, California-based semiconductor company has a GF Score of 94 out of 100 based on a rank of 10 out of 10 for growth and momentum, a profitability rank of 9 out of 10, a GF Value rank of 6 out of 10 and a financial strength rank of 5 out of 10.
Other gurus with holdings in Broadcom include Ken Fisher (Trades, Portfolio)’s Fisher Investments and Steven Romick (Trades, Portfolio)’s FPA Crescent Fund.
Schlumberger
The fund purchased 8,713,993 shares of Schlumberger (SLB, Financial), giving the position a 1.24% equity portfolio weight.
Shares of Schlumberger averaged $40.72 during the second quarter; the stock is significantly overvalued based on Friday’s price-to-GF-Value ratio of 1.33.
The Houston-based energy company has a GF Score of 58 out of 100 based on a rank of 6 out of 10 for profitability and momentum, a financial strength rank of 5 out of 10 and a rank of 1 out of 10 for growth and GF Value.
Other gurus with holdings in Schlumberger include Dodge & Cox and First Eagle Investment (Trades, Portfolio).
Shopify
Harbor Capital Appreciation Fund sold 7,183,750 shares of Shopify (SHOP, Financial), slicing 69.5% of the position and 2.02% of its equity portfolio.
Shares of Shopify averaged $66.76 during the first quarter; the stock is significantly undervalued based on Friday’s price-to-GF-Value ratio of 0.17.
The Ottawa, Ontario-based e-commerce technology company has a GF Score of 69 out of 100 based on a financial strength rank of 9 out of 10, a growth rank of 7 out of 10, a GF Value rank of 2 out of 10 and a rank of 4 out of 10 for profitability and momentum.
Nvidia
The fund sold 2,528,753 shares of Nvidia (NVDA, Financial), trimming 34.1% of the position and 1.80% of its equity portfolio. Shares averaged $238.75 during the second quarter.
Although the company’s price-to-GF-Value ratio is just 0.55 as of Friday, GuruFocus’ Value line labeled Nvidia a possible value trap due to the stock’s low momentum rank of 5 out of 10.
Despite low momentum, the Santa Clara, California-based semiconductor company has a GF Score of 96 out of 100, driven by a rank of 10 out of 10 for profitability and growth and a rank of 8 out of 10 for financial strength and GF Value.
Netflix
The fund sold 1,198,234 shares of Netflix (NFLX, Financial), chopping 60.67% of the position and 1.49% of its equity portfolio.
Although shares averaged $356.04 during the second quarter, shares of Netflix traded around $179.95 on Friday. The stock is significantly undervalued based on Friday’s price-to-GF-Value ratio of 0.28.
The Los Gatos, California-based streaming giant has a GF Score of 82 out of 100, driven by a rank of 10 out of 10 for profitability and growth and a financial strength rank of 6 out of 10 despite momentum and GF Value ranking just 2 out of 10.
