HOTCHKIS & WILEY Sells Stake in Time Warner Cable

Investors double down on holding in Comcast

Sep 08, 2015

HOTCHKIS & WILEY looks for undervalued companies with loads of potential in which to invest. “Our ability to deliver long-term performance is the key to our success,” the firm’s website proclaims. That success seems indisputable. The large cap value fund produced returns of nearly 40% year before last.

HOTCHKIS & WILEY’s most noteworthy deal of the second quarter was its sale of a 2,918,984-share stake in Time Warner Cable Inc. (TWC, Financial), a New York City-based cable telecommunications company. HOTCHKIS & WILEY received an average price of $165.41 per share in a transaction that had a -1.52% impact on HOTCHKIS & WILEY’s portfolio.

HOTCHKIS & WILEY sold nine other stakes in the second quarter, among them Mondelez International Inc. (MDLZ, Financial), Aetna Inc. (AET, Financial), Lear Corp. (LEA, Financial) and TE Connectivity Ltd. (TEL, Financial).

HOTCHKIS & WILEY reduced 88 of its stakes in the second quarter. Its most significant reduction was the sale of 5,191,960 shares of Public Service Enterprise Group Inc. (PEG, Financial), a Newark, N.J.-based utility company, for an average price of $41.49 per share. The sale had a -0.76% impact on HOTCHKIS & WILEY’s portfolio.

Public Service Enterprise Group has a market cap of $20.67 billion and an enterprise value of $29.39 billion. It has a P/E of 10.8, a Price/Book of 1.5 and a Price/Sales of 1.8. HOTCHKIS & WILEY is Public Service Enterprise Group’s leading shareholder among the gurus; Pioneer Investments (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Ray Dalio (Trades, Portfolio), John Hussman (Trades, Portfolio), Jim Simons (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio), David Dreman (Trades, Portfolio) and RS Investment Management (Trades, Portfolio) also have shares of Public Service Enterprise Group in their portfolios.

HOTCHKIS & WILEY reduced its stake in American International Group Inc. (AIG, Financial), a New York-based insurance corporation, selling 3,097,724 shares for an average price of $59.02 per share. The sale had a -0.59% impact on HOTCHKIS & WILEY’s portfolio.

HOTCHKIS & WILEY sold 2, 529,504 shares of JPMorgan Chase & Co. (JPM, Financial), a New York City-based banking and financial services company, for an average price of $65.22 per share. The transaction had a -0.53% impact on HOTCHKIS & WILEY’s portfolio.

HOTCHKIS & WILEY also sold 1,845,495 shares of Target Corp. (TGT), a Minneapolis, Minn.-based discount retailer, for an average price of $80.95 per share. The sale had a -0.53% impact on HOTCHKIS & WILEY’s portfolio.

Buys and additions

HOTCHKIS & WILEY more than doubled its existing stake in Comcast Corp. (CMCSK), a Philadelphia-based mass media company, buying 4,423,173 shares for an average price of $58.34 per share. The deal had a 0.94% impact on HOTCHKIS & WILEY’s portfolio.

Among the other stakes to which HOTCHKIS & WILEY added in the second quarter were Marathon Oil Corp. (MRO, Financial), Calpine Corp. (CPN, Financial), Southern Co. (SO) and Corning Inc. (GLW).

HOTCHKIS & WILEY bought 11 new stakes in the second quarter, most of which were relatively small. The most expensive new stake in the portfolio was State Street Corp. (STT), a Boston-based financial services holding company. HOTCHKIS & WILEY paid an average price of $77.8 for a 2,334,884-share stake. The purchase had a 0.63% impact on HOTCHKIS & WILEY’s portfolio.

By volume, the largest new stake in HOTCHKIS & WILEY’s portfolio is Real Industry Inc. (RELY), a Sherman Oaks, Calif.-based holding company. HOTCHKIS & WILEY acquired 5,222,142 shares for an average price of $9.57 per share. The transaction had a 0.21% impact on HOTCHKIS & WILEY’s portfolio.

Real Industry has a market cap of $296.53 million and an enterprise value of $420.13 million. It has a P/E of 126.7, a Price/Book of 0.8 and a Price/Sales of 0.2. HOTCHKIS & WILEY is Real Industry’s leading shareholder among the gurus; Private Capital (Trades, Portfolio), Arnold Van Den Berg (Trades, Portfolio) and Murray Stahl (Trades, Portfolio) also have shares of Real Industry in their portfolios.

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