Chris Davis (Trades, Portfolio) leads his family firm Davis Advisors, which manages more than $60 billion across several asset classes. He serves as the portfolio manager for the Davis Financial Fund, and added to his holdings in 62 stocks during the first quarter.
Over the past 10 years, the Financial Fund had an average annualized return of 5.74%, while the S&P 500 returned 8.01%. However, over the past 15 years, the fund outperformed the index, returning 6.14% compared to 4.15% for the S&P 500.
The following are Davis’ five largest holding increases during the first quarter.
JPMorgan Chase (JPM, Financial)
Davis added 7,481,588 shares of JPMorgan Chase for an average price of $59.22 per share, upping his stake in the financial services company to 18,578,018 shares.
The stock increased 22% over the past year and currently trades at $66.11, with a P/E ratio of 12 and P/S ratio of 2.6. Despite the rising stock price, the company looks to be undervalued when compared with the Peter Lynch earnings line.
Over the past five years, EBIT per share increased 4.62%, recording at $7.85 in 2014. Similarly, net income grew 4% over the same time period and was $21,762 million last year.
The current dividend yield is 2.5%, which is close to the three-year low, and the payout ratio is 29%.
Davis upped his stake in Encana with 29,289,185 shares bought for an average price of $12.58 per share. Encana is a North American energy producer that develops diverse resource plays producing natural gas and oil.
The stock price declined 39% over the past year, and is undervalued when compared with the Peter Lynch earnings line.
Encana is currently priced at $13.74 with a P/E ratio of 3.3 and P/S ratio of 1.3. In 2014, net income jumped to $3,392 million, up from $236 million the year before. The current dividend yield is 2.1%, while the payout ratio is just 6%.
Citizens Financial Group (CFG, Financial)
He bought 6,491,967 shares of Citizens Financial, which traded for an average price of $24.51 during the quarter. The total position now amounts to 12,724,917 shares.
Citizens Financial, through its subsidiaries, provides retail and commercial banking products and services. The current price is $26.48 with a P/E ratio of 24.5 and P/S ratio of 3.The company pulled out of the red in 2014, reported net income of $865 million, up from $-3,426 million the year before.
The dividend yield is 1.14%, while the payout ratio is 12%.
Halliburton Co (HAL, Financial)
Davis also added 2,589,647 shares to his holding in Halliburton for an average $41.69 per share, for a total of 8,678,047 shares in the position.
Halliburton provides services to companies in the oil and gas industry and saw its stock decline 27% over the past year. The current P/E ratio is 17.9 and the P/S ratio is 1.24.
Over the past five years, the EBIT per share growth rate was 15.4%, while revenue grew by 18.6% over the same time period. In 2014, Halliburton reported net income of $3,500 million, up from $2,125 million the year before.
The current dividend yield is 1.4%, while the payout ratio is 26%.
Qihoo 360 Technology Co (QIHU, Financial)
Davis increased his stake in Qihoo 360 by 84%, buying 1,824,062 shares for an average price of $54.25 per share. He now owns a total of 3,994,086 shares.
Qihoo is a Chinese technology company with two internet security products: 360 Safe Guard and 360 Anti-Virus. The stock declined 28% over the past year and now trades at $57.74.
In 2014, EBIT per share was $1.97, which has been increasing each year since 2011.
Net income in 2014 was $223 million, up from $100 million the year before. Similarly, Qihoo’s operating margin was 18.66% last year, and had increased more than 7% over the past five years.
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