Wallace Weitz (Trades, Portfolio) is the portfolio manager of Weitz Value Fund, Weitz Hickory Fund and Weitz Partners Value Fund, which he started in 1983. Weitz's approach to value investing has evolved over the years to combine Graham's price sensitivity and insistence on a "margin of safety", with a conviction that qualitative factors allow a company to have some control over its destiny. This can be more important than statistical measurements, such as historical book value or reported earnings.
The following are the undervalued stocks of his portfolio that are trading with a very low P/E ratio.
He owns 2,394,755 shares of Iconix Brand Group Inc. (ICON)thatis a brand management company engaged in licensing, marketing and providing trend direction for a portfolio of consumer brands.
According to the DCF calculator, the company’s fair value is $41.75 that means ICON is undervalued by 51% at current prices and even GuruFocus’ members confirm the same fair price.
The stock is also trading with a very low P/E(ttm) ratio of 7.09 that is ranked higher than 90% of the other 515 companies in the Global Apparel Manufacturing industry, which has an average P/E(ttm) ratio of 20.60. The price dropped by 52% over the last 12 months and is now -53.13% from its 52-week high and +1.35% from its 52-week low. Over the longer term of 5 years, the price has risen by 19%.
Wallace Weitz (Trades, Portfolio) is the main hedge fund holding shares of the company with 5.02% of outstanding shares that is 2.2% of his total assets. Ron Baron (Trades, Portfolio) is second with 4.19% of outstanding shares, followed by Joel Greenblatt (Trades, Portfolio) with 0.53%.
He owns 377,852 shares of Precision Castparts (PCP)that is a manufacturer of complex metal components and products including high-quality investment castings, forgings and fasteners/fastener systems for critical aerospace and power applications.
According to the DCF calculator, the company’s fair value is $260.39 that means PCP is undervalued by 26% at current prices and even GuruFocus’ members confirm the same fair price ($281.68, average result after 16 votes).
The stock is trading with a P/E(ttm) ratio of 18.14 that is ranked higher than 56% of the other companies in the Global Metal Fabrication industry, which has an average P/E(ttm) ratio of 21.10. The price dropped by 16% over the last 12 months and is now -23.06% from its 52-week high and +2.95% from its 52-week low. Over the longer term of 5 year, the price has risen by 53%.
Warren Buffett (Trades, Portfolio) is the main shareholder of the company with 3.04% of outstanding shares that is 0.82% of his total assets. Ruane Cunniff (Trades, Portfolio) is second with 2.55% of outstanding shares, followed by Lou Simpson (Trades, Portfolio) with 0.98%.
He owns 1,349,737 shares of Oracle Corporation (ORCL) that develops, manufactures, markets, hosts and supports database and middleware software, application software, cloud infrastructure, hardware system including computer server, storage and networking products and related services that are engineered to work together in cloud-based and on-premise information technology (IT) environments.
According to the DCF calculator, the company’s fair value is $50.81, which means ORCL is undervalued by 22% at current prices. GuruFocus’ members confirm almost the same fair price of $53.07, which was the average price after 36 votes.
The stock is trading with a P/E(ttm) ratio of 17.88 that is ranked higher than 69% of the other companies in the Global Software - Infrastructure industry, which has an average P/E(ttm) ratio of 26.80. The price declined by 2% over the last 12 months and is now -15.01% from its 52-week high and +10.83% from its 52-week low. Over the longer term of 5 years, the price has risen by 64%.
First Eagle Investment (Trades, Portfolio) and James Barrow (Trades, Portfolio) are the main shareholders, each with 0.87% of outstanding shares. Donald Yacktman (Trades, Portfolio) holds 0.81% of outstanding shares.
Weitz also owns 230,400 shares of Accenture PLC (ACN) that is engaged in providing management consulting, technology and outsourcing services to clients. The Company operates in five segments including Communications, Media & Technology; Financial Services; Health & Public Service; Products; and Resources.
According to the DCF calculator, the company’s fair value is $126.11, which means ACN is undervalued and is trading with a margin of safety of 18% at current prices. By contrast, GuruFocus’ members gives to the company a fair price of $90.5 (average price after 8 votes) and put the stock as overpriced.
The stock is trading with a P/E(ttm) ratio of 22.57 that is ranked higher than 58% of the other companies in the Global Information Technology Services industry that has an average P/E(ttm) ratio of 26.80. The price has risen by 31% over the last 12 months and is now -0.70% from its 52-week high and +40.40% from its 52-week low. Over the longer term of 5 years, the price has risen by 159%.
Jeremy Grantham (Trades, Portfolio) is the main shareholder of the company with 0.52% of outstanding shares of the company, followed by Bill Nygren (Trades, Portfolio) with 0.26% of outstanding shares and First Eagle Investment (Trades, Portfolio) with 0.07%.
