Steven Scruggs (Trades, Portfolio), manager of the FPA Queens Road Small Cap Fund, disclosed his fund’s top trades during the second quarter included a new position in Citizens Financial Group Inc. (CFG, Financial), boosts to its holdings in TD Synnex Corp. (SNX, Financial) and Synaptics Inc. (SYNA, Financial) and a reduction to its Mativ Holdings Inc. (MATV, Financial) invesetment.
The fund, which is part of Los Angeles-based First Pacific Advisors (Trades, Portfolio), applies fundamental analysis and bottom-up stock picking based on Benjamin Graham’s value investing principles. Emphasis is placed on quantitative and qualitative analysis, balance sheet, valuation, management, sector and industry.
As of May, the fund’s $426 million equity portfolio contains 54 stocks, with two new positions and a quarterly turnover ratio of 6%. The top three sectors in terms of weight are financial services, technology and industrials, representing 25.68%, 23.88% and 17.24% of the equity portfolio.
Investors should be aware 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.
Citizens Financial Group
The fund invested in 77,454 shares of Citizens Financial Group (CFG, Financial), giving the position 0.75% equity portfolio weight. Shares averaged $42.99 during the second quarter; the stock is modestly undervalued based on Monday’s price-to-GF Value ratio of 0.83.
The Providence, Rhode Island-based bank has a GF Score of 74 out of 100 based on a GF Value rank of 9 out of 10, a momentum rank of 8 out of 10, a profitability rank of 6 out of 10, a growth rank of 4 out of 10 and a financial strength rank of 3 out of 10.
Other gurus with holdings in Citizens Financial include Hotchkis & Wiley and Steven Cohen (Trades, Portfolio)’s Point72 Asset Management.
TD Synnex
The fund added 70,000 shares of TD Synnex (SNX, Financial), boosting the position by 48.71% and its equity portfolio by 1.71%.
Shares of TD Synnex averaged $102.72 during the second quarter; the stock is modestly undervalued based on Monday’s price-to-GF Value ratio of 0.76.
The Fremont, California-based hardware company has a GF Score of 83 out of 100 based on a rank of 10 out of 10 for momentum and GF Value, a profitability rank of 7 out of 10, a growth rank of 6 out of 10 and a financial strength rank of 5 out of 10.
Synaptics
The fund added 26,000 shares of Synaptics (SYNA, Financial), boosting the position by 30.26% and its equity portfolio by 0.90%.
Shares of Synaptics averaged $174.57 during the second quarter; the stock is significantly overvalued based on Monday’s price-to-GF Value ratio of 1.46.
The San Jose, California-based semiconductor company has a GF Score of 66 out of 100 based on a momentum rank of 7 out of 10, a rank of 6 out of 10 for profitability and financial strength, a growth rank of 4 out of 10 and a GF Value rank of 1 out of 10.
Mativ Holdings
The fund sold 155,180 shares of Mativ Holdings (MATV, Financial), trimming 35.46% of the position and 0.95% of its equity portfolio. Shares of Mativ Holdings averaged $27.43 during the second quarter.
GuruFocus’ GF Value Line labeled the Alpharetta, Georgia-based forest products company a possible value trap due to the company’s low price-to-GF Value ratio of 0.42 and poor financial strength rank of 4.
Mativ has a GF Score of 78 out of 100, driven by a profitability rank of 8 out of 10 and a growth rank of 7 out of 10 despite financial strength, GF Value and momentum ranking just 4 out of 10.
