The Parnassus Endeavor Fund (Trades, Portfolio) disclosed in regulatory filings that its top trades during the third quarter included new holdings in Ball Corp. (BALL, Financial), Oracle Corp. (ORCL, Financial) and Signature Bank (SBNY, Financial) and the closure of its positions in PepsiCo Inc. (PEP, Financial), Intel Corp. (INTC, Financial) and Novartis AG (NVS, Financial).
The fund, which is part of Jerome Dodson (Trades, Portfolio)’s San Francisco-based Parnassus Investments, seeks investments in companies with long-term competitive advantages and quality management teams with emphasis on environmental, social and governance investing. Parnassus also avoids investments in companies that engage in the extraction, exploration and manufacturing of fossil fuels.
Dodson stepped down from his fund management duties in 2020, though he remains chairman of the board. West Palm Beach, Florida-based asset management company Affiliated Managers Group Inc. (AMG) gained control of Parnassus in October 2021 following the acquisition of a majority stake in the firm.
As of September, the fund’s $3.99 billion equity portfolio contains 45 stocks with a quarterly turnover of 8%. The top four sectors in terms of weight are financial services, health care, technology and industrials, respresenting 23.66%, 21.92%, 15.98% and 15.89% 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.
Ball
The fund purchased 1,735,412 shares of Ball (BALL, Financial), giving the position 2.10% equity portfolio weight. Shares averaged $61.49 during the third quarter; the stock is significantly undervalued based on its price-to-GF Value ratio of 0.45 as of Monday.
The Westminster, Colorado-based metal can manufacturing company has a GF Score of 76 out of 100: Although the company has a rank of 8 out of 10 for profitability and growth, Ball has a low momentum rank of 2 out of 10 and a rank of 4 out of 10 for GF Value and financial strength.
Ball’s profitability ranks 8 out of 10 on several positive investing signs, which include a return on equity that outperforms more than 86% of global competitors and an operating margin that has increased approximately 3.8% per year on average over the past five years.
Other gurus with holdings in Ball include Steven Cohen (Trades, Portfolio)’s Point72 Asset Management and Tom Gayner (Trades, Portfolio)’s Markel Gayner Asset Management Corp.
Oracle
The fund invested in 1,358,062 shares of Oracle (ORCL, Financial), giving the stake 2.08% equity portfolio weight. Shares averaged $73.21 during the third quarter; the stock is modestly undervalued based on its price-to-GF Value ratio of 0.82 as of Monday.
The Austin, Texas-based enterprise resource planning software company has a GF Score of 86 out of 100, driven by a profitability rank of 9, a growth rank of 8 out of 10 and a rank of 7 out of 10 for momentum and GF Value despite financial strength ranking just 3 out of 10.
Oracle’s profitability ranks 9 out of 10, driven by profit margins outperforming more than 90% of global competitors despite declining over the past five years. Additionally, the company had 10 years of positive operating income over the past decade.
Signature Bank
The fund purchased 485,426 shares of Signature Bank (SBNY, Financial), giving the holding 1.84% equity portfolio weight.
Shares of Signature Bank averaged $181.74 during the third quarter; the stock is significantly undervalued based on its price-to-GF Value ratio of 0.66 as of Monday.
The New York-based commercial bank has a GF Score of 89 out of 100, driven by a rank of 10 out of 10 for growth and GF Value and a rank of 7 out of 10 for profitability and momentum despite financial strength ranking just 4 out of 10.
Signature Bank’s growth ranks 10 out of 10 on the back of future estimated revenue and earnings growth rates outperforming more than 93% of global competitors.
PepsiCo
The fund sold all 915,459 shares of PepsiCo (PEP, Financial), trimming 3.43% of its equity portfolio.
Shares of PepsiCo averaged $172.33 during the third quarter; the stock is fairly valued based on its price-to-GF Value ratio of 0.99 as of Monday.
The Purchase, New York-based food and beverage giant has a GF Score of 85 out of 100 based on a momentum rank of 9 out of 10, a profitability rank of 8 out of 10, a growth rank of 7 out of 10 and a rank of 5 out of 10 for financial strength and GF Value.
PepsiCo’s profitability ranks 8 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7 out of 9 and a gross profit margin that outperforms more than 87% of global competitors.
Intel
The fund sold all 2,803,269 shares of Intel (INTC, Financial), reducing its equity portfolio by 2.36%.
Shares of Intel averaged $34.09 during the third quarter; the stock is significantly undervalued based on its price-to-GF Value ratio of 0.53 as of Monday.
The Santa Clara, California-based chipmaker has a GF Score of 85 out of 100, driven by a profitability rank of 9 out of 10, a financial strength rank of 7 out of 10 and a rank of 8 out of 10 for growth and GF Value despite momentum ranking just 2 out of 10.
Novartis
The fund sold all 1,242,128 shares of Novartis (NVS, Financial), reducing its equity portfolio by 2.36%.
Shares of Novartis averaged $82.89 during the third quarter; the stock is modestly undervalued based on its price-to-GF Value ratio of 0.84 as of Monday.
The Swiss medicine and health care products company has a GF Score of 82 out of 100 based on a profitability rank of 8 out of 10, a momentum rank of 7 out of 10, a growth rank of 5 out of 10 and a rank of 6 out of 10 for financial strength and GF Value.
