Arnold Schneider (Trades, Portfolio) has 41.9% of his portfolio invested in financial services stocks, but a 17.9% chunk in energy, which contributed to underperformance in the third quarter. None of the seven new positions he started during the quarter are from the sector, however, his updated portfolio released today shows. A deep value investor, he did not increase his exposure to the sector and sees copious opportunity elsewhere in the current market environment:
“Given valuations that are almost as cheap in the non-energy portfolio, our overall portfolio upside is over two times our long term average upside as of the end of the quarter,” he said in his third quarter investor letter. “We believe deep value is extraordinarily cheap, even in a fairly valued market.”
Schneider Capital Management, which has $506 million in assets under management, held 81 positions in its portfolio at the end of the quarter, valued at $477 million.
Schneider’s seven new third quarter stocks of the third quarter were: Xura Inc. (MESG, Financial), Avis Budget Group Inc. (CAR, Financial), U.S. Silica Holdings Inc. (SLCA, Financial), Genco Shipping & Trading Ltd. (GNK), Cavco Industries Inc. (CVCO, Financial), iShares Russell 1000 Value Index ETF (IWD, Financial) and Harsco Corp. (HSC, Financial).
By far his largest new position, Schneider added 832,289 shares of Xura Inc., a 3.91% portfolio weight, to his holdings. The company’s third quarter share price averaged $20.
Xura Inc., formerly Comverse Inc., is a provider of telecom business enablement solutions for communication service providers. Xura Inc. has a market cap of $634.98 million; its shares were traded at around $25.34 with a P/E ratio of 3.85 and P/S ratio of 1.25.
Avis Budget Group Inc. (CAR, Financial)
Schneider bought 76,960 shares of Avis Budget Group Inc., a 0.7% portfolio weight. The stock averaged $43 per share.
Avis Budget Group Inc. was founded in 1946. It provides vehicle rental and car sharing services in North America, Europe, Australia, New Zealand and certain other regions it serve. Avis Budget Group Inc. has a market cap of $4.07 billion; its shares were traded at around $40.61 with a P/E ratio of 12.61 and P/S ratio of 0.52. Avis Budget Group Inc. had an annual average earnings growth of 9.80% over the past 10 years.
U.S. Silica Holdings Inc. (SLCA, Financial)
Schneider purchased 94,900 shares of U.S. Silica Holdings Inc., a 0.28% portfolio weight. The company’s average price was $21 per share.
U.S. Silica Holdings Inc. was incorporated as a Delaware corporation on Nov. 14, 2008. U.S. Silica Holdings Inc. has a market cap of $963.06 million; its shares were traded at around $18.04 with a P/E ratio of 16.4 and P/S ratio of 1.28. The dividend yield of Us Silica Holdings Inc. stocks is 2.77%. U.S. Silica Holdings Inc. had an annual average earnings growth of 35.1% over the past five years.
Genco Shipping & Trading Ltd. (GNK)
Schneider purchased 227,110 shares of Genco Shipping & Trading Ltd., a .19% portfolio weight. Its average share price was $6.
Genco Shipping & Trading Ltd. a New York City-based company, incorporated in the Marshall Islands in 2004. Genco Shipping & Trading Ltd. has a market cap of $125.4 million; its shares were traded at around $1.72 with and P/S ratio of 0.34.
Cavco Industries Inc. (CVCO, Financial)
Schneider purchased 5,281 shares of Cavco Industries Inc., a 0.08% portfolio weight. The shares cost $73 on average in the quarter.
Cavco Industries Inc. was formed on June 30, 2003, as a successor corporation to previous Cavco entities operating since 1965. Cavco Industries Inc. has a market cap of $813.52 million; its shares were traded at around $91.38 with a P/E ratio of 35 and P/S ratio of 1.29.
iShares Russell 1000 Value Index ETF (IWD, Financial)
Schneider purchased 3,420 shares of iShares Russell 1000 Value Index ETF, a 0.07% portfolio weight. Shares of the ETF traded at $99 on average.
He purchased 20,000 shares of Harsco Corp., a 0.04% portfolio weight. Its shares traded at $13 on average.
Harsco Corp. was incorporated on Feb. 28, 1956. The company provides industrial services and engineered products serving industries that are fundamental to economic growth and infrastructure development. Harsco Corp. has a market cap of $781.74 million; its shares were traded at around $9.76 with and P/S ratio of 0.44. The dividend yield of Harsco Corp. stocks is 8.39%.
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