In spite of a “very cautious view of financial markets” and financially ballasting smartphone maker BlackBerry (BBRY, Financial), stock buying at Prem Watsa’s Fairfax Financial (FFH, Financial) was relatively normal in the third quarter, with six new holdings added to the portfolio, according to the latest report. Watsa also shifted some sector weightings from the previous quarter. The guru pulled back on communication services, healthcare and financial services, and increased his portfolio’s exposure to basic materials from 15.3% to 24.2%, energy from 9.5% to 16.6% and consumer cyclical from 3.6% to 6.1%.
The total fair value of Watsa’s long portfolio of 42 stocks is $1.6 billion, with 0% quarter-over-quarter turnover.
Watsa’s New Buys
K12 Inc. (LRN, Financial)
Watsa bought 33,133 shares of K12 Inc. (LRN), comprising 0.064% of his portfolio. The third quarter’s share price averaged $32; shares declined 35% from the average.
K12 is a technology-based educational company that helps students improve their potential by focusing on their individual needs.
K12 Inc. has a market cap of $860.700 million; its shares were traded at around $20.90 with a P/E ratio of 44.70 and P/S ratio of 1.00. K12 Inc. had an annual average earnings growth of 17.40% over the past five years.
In the company’s first quarter 2013 ended Sept. 30, 2013, K12 reported a 3.3% year-over-year revenue increase to $228.4 million, and a net loss of $5.0 million, or $0.13 per share, compared to net income of $4.4 million. It has cash on its balance sheet of $163.5 million, down 9.9% from the previous quarter.
Rue21 Inc. (RUE, Financial)
Watsa purchased 21,000 shares of rue21 Inc. (RUE), comprising 0.053% of his portfolio. In the third quarter the share price averaged $41; it has gained 1% from the average.
Rue21 is a trendy fashion retailer. The company was purchased by global private equity firm Apax Partners for $42 per share in cash on Oct. 10.
Onyx Pharmaceuticals Inc. (ONXX, Financial)
Watsa purchased 4,500 shares of Onyx, comprising 0.035% of his portfolio. The third quarter share price averaged $127; the price has declined 2% from the average.
Onyx Pharmaceuticals focused on treatments for individuals with cancer. The company was purchased by Amgen on Oct. 1 through a tender offer for $125 per share in cash, or $10.4 billion.
Spreadtrum Communications Inc. (SPRD, Financial)
Watsa purchased 16,500 shares of Spreadtrum Communications Inc. (SPRD), comprising 0.031% of his portfolio. The share price average in the third quarter was $30; the price has increased 3% from the average.
China’s Spreadtrum is a fables semiconductor company making chipsets for smartphones and electronics with 2G, 3G and 4G wireless communications.
Spreadtrum Communications Inc. has a market cap of $1.46 billion; its shares were traded at around $30.53 with a P/E ratio of 17.70 and P/S ratio of 1.70. The dividend yield of Spreadtrum Communications Inc. stocks is 1.20%.
In the third quarter, Spreadtrum’s revenue increased 56.1% year over year to $293.3 million. GAAP net income increased 52.4% year over year to $35.7 million, or $0.71 per basic and diluted share. Spreadtrum had $139.7 million at quarter-end, declined from $201.7 million in the second quarter.
NewMarket Corporation (NEU, Financial)
Watsa bought 750 shares of NewMarket Corporation, comprising 0.014% of his portfolio. The share price averaged $278 in the third quarter; it has increased 16% from the average.
NewMarket is a holding company owning businesses within the petroleum additives industry, such as Afton Chemical, Ethyl, New Market Services and NewMarket Development.
Newmarket Corporation has a market cap of $4.26 billion; its shares were traded at around $321.28 with a P/E ratio of 16.30 and P/S ratio of 1.90. The dividend yield of Newmarket Corporation stocks is 1.10%. Newmarket Corporation had an annual average earnings growth of 26.40% over the past 10 years. GuruFocus rated Newmarket Corporation the business predictability rank of 4-star.
For the third quarter, NewMarket reported $580.5 million in revenue, down from $551.2 million in the third quarter 2012. Net income increased to $78.9 million from $64.7 million in the same periods. Its quarter-end cash balance amounted to $247.27 million, increased from $89.13 million at year-end 2012.
BP PLC (BP, Financial)
Watsa bought 5,000 shares of BP PLC (BP), comprising 0.013% of shares outstanding. The price averaged $42 in the third quarter and has increased $12% from the average.
BP is a global oil and gas company making transportation fuel, lubricants and petrochemicals, with operations in over 80 countries.
BP PLC has a market cap of $147.34 billion; its shares were traded at around $46.92 with a P/E ratio of 6.30 and P/S ratio of 0.38. The dividend yield of BP PLC stocks is 4.70%.
For the third quarter, BP announced $98.2 billion in revenue, an increase from $94.4 billion for the third quarter 2012. Net income declined to $3.5 billion, or $1.11 per diluted share, from $5.28 billion, or $1.70 per diluted share for the second quarter 2012. Its cash balance at quarter-end stood at $30 billion, an increase from $16.4 billion a year previously.
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The total fair value of Watsa’s long portfolio of 42 stocks is $1.6 billion, with 0% quarter-over-quarter turnover.
Watsa’s New Buys
K12 Inc. (LRN, Financial)
Watsa bought 33,133 shares of K12 Inc. (LRN), comprising 0.064% of his portfolio. The third quarter’s share price averaged $32; shares declined 35% from the average.
K12 is a technology-based educational company that helps students improve their potential by focusing on their individual needs.
K12 Inc. has a market cap of $860.700 million; its shares were traded at around $20.90 with a P/E ratio of 44.70 and P/S ratio of 1.00. K12 Inc. had an annual average earnings growth of 17.40% over the past five years.
In the company’s first quarter 2013 ended Sept. 30, 2013, K12 reported a 3.3% year-over-year revenue increase to $228.4 million, and a net loss of $5.0 million, or $0.13 per share, compared to net income of $4.4 million. It has cash on its balance sheet of $163.5 million, down 9.9% from the previous quarter.
Rue21 Inc. (RUE, Financial)
Watsa purchased 21,000 shares of rue21 Inc. (RUE), comprising 0.053% of his portfolio. In the third quarter the share price averaged $41; it has gained 1% from the average.
Rue21 is a trendy fashion retailer. The company was purchased by global private equity firm Apax Partners for $42 per share in cash on Oct. 10.
Onyx Pharmaceuticals Inc. (ONXX, Financial)
Watsa purchased 4,500 shares of Onyx, comprising 0.035% of his portfolio. The third quarter share price averaged $127; the price has declined 2% from the average.
Onyx Pharmaceuticals focused on treatments for individuals with cancer. The company was purchased by Amgen on Oct. 1 through a tender offer for $125 per share in cash, or $10.4 billion.
Spreadtrum Communications Inc. (SPRD, Financial)
Watsa purchased 16,500 shares of Spreadtrum Communications Inc. (SPRD), comprising 0.031% of his portfolio. The share price average in the third quarter was $30; the price has increased 3% from the average.
China’s Spreadtrum is a fables semiconductor company making chipsets for smartphones and electronics with 2G, 3G and 4G wireless communications.
Spreadtrum Communications Inc. has a market cap of $1.46 billion; its shares were traded at around $30.53 with a P/E ratio of 17.70 and P/S ratio of 1.70. The dividend yield of Spreadtrum Communications Inc. stocks is 1.20%.
In the third quarter, Spreadtrum’s revenue increased 56.1% year over year to $293.3 million. GAAP net income increased 52.4% year over year to $35.7 million, or $0.71 per basic and diluted share. Spreadtrum had $139.7 million at quarter-end, declined from $201.7 million in the second quarter.
NewMarket Corporation (NEU, Financial)
Watsa bought 750 shares of NewMarket Corporation, comprising 0.014% of his portfolio. The share price averaged $278 in the third quarter; it has increased 16% from the average.
NewMarket is a holding company owning businesses within the petroleum additives industry, such as Afton Chemical, Ethyl, New Market Services and NewMarket Development.
Newmarket Corporation has a market cap of $4.26 billion; its shares were traded at around $321.28 with a P/E ratio of 16.30 and P/S ratio of 1.90. The dividend yield of Newmarket Corporation stocks is 1.10%. Newmarket Corporation had an annual average earnings growth of 26.40% over the past 10 years. GuruFocus rated Newmarket Corporation the business predictability rank of 4-star.
For the third quarter, NewMarket reported $580.5 million in revenue, down from $551.2 million in the third quarter 2012. Net income increased to $78.9 million from $64.7 million in the same periods. Its quarter-end cash balance amounted to $247.27 million, increased from $89.13 million at year-end 2012.
BP PLC (BP, Financial)
Watsa bought 5,000 shares of BP PLC (BP), comprising 0.013% of shares outstanding. The price averaged $42 in the third quarter and has increased $12% from the average.
BP is a global oil and gas company making transportation fuel, lubricants and petrochemicals, with operations in over 80 countries.
BP PLC has a market cap of $147.34 billion; its shares were traded at around $46.92 with a P/E ratio of 6.30 and P/S ratio of 0.38. The dividend yield of BP PLC stocks is 4.70%.
For the third quarter, BP announced $98.2 billion in revenue, an increase from $94.4 billion for the third quarter 2012. Net income declined to $3.5 billion, or $1.11 per diluted share, from $5.28 billion, or $1.70 per diluted share for the second quarter 2012. Its cash balance at quarter-end stood at $30 billion, an increase from $16.4 billion a year previously.
See more Prem Watsa stocks at his portfolio here. Also check out the Undervalued Stocks, Top Growth Companies and High Yield stocks of Prem Watsa.
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