Chris Davis (Trades, Portfolio) is the portfolio manager of Davis Financial Fund, an independent, employee-owned investment management firm founded in 1969. Davis Advisors manages more than $60 billion across several different asset classes.
Here are the stocks in his portfolio that are trading below the Peter Lynch value.
Apple Inc. (AAPL) is trading at $114 per share, and the Peter Lynch value gives the stock a fair price of $216.50, giving the stock a margin of safety of 48%.
The stock is trading with a PE ratio of 13.22, higher than 62% of companies in the Global Consumer Electronics industry, and is currently 15.13% below its 52-week high and 24.11% above its 52-week low.
The company designs, manufactures and markets mobile communication and media devices, personal computers and portable digital music players and sells a variety of related software, services, accessories, networking solutions and third-party digital content and applications.
Fiscal 2015 was Apple’s most successful year ever with revenue growing 28%; during the last quarter the company's gross margin was 39.9% compared to 38% in the year-ago quarter, and international sales was 62% of the quarter’s revenue. Apple’s record fourth quarter numbers resulted in a growth of 38% for earnings per share and operating cash flow of $13.5 billion.
The company's main shareholder among the gurus is Carl Icahn (Trades, Portfolio) with a stake of 0.95% of outstanding shares followed by David Einhorn (Trades, Portfolio) with 0.2% and Ken Fisher (Trades, Portfolio) with 0.2% of outstanding shares.
Cemex SAB de CVĂ‚ (CX) is trading at $5.61, and the Peter Lynch value gives the stock a fair price of $55.76, giving the stock a margin of safety of 91%.
The stock is trading with a PE ratio of 2.58, higher than 93% of companies in the Global Building Materials industry and is currently 56.38% below its 52-week high and 12.65% above its 52-week low.
The company is engaged in the production, marketing, distribution and sale of cement, ready-mix concrete, aggregates and other construction materials. Cement is a binding agent, which, when mixed with sand, stone or other aggregates and water, produces either ready-mix concrete or mortar.
For the third quarter due to higher prices of products in local currency terms in most of the company’s operations, as well as improved volumes in most of its products in the U.S. and its Asia region, consolidated net sales grew by 5% and operating EBITDA had an increase of 5% on a like-to-like basis versus the same period in 2014.
Charles Brandes (Trades, Portfolio) is the company's leading shareholder among the gurus with a stake of 2.32% of outstanding shares, followed by Howard Marks (Trades, Portfolio) with 0.52% and Ken Fisher (Trades, Portfolio) with 0.43%.
PACCAR Inc. (PCAR) is trading at $50, and the Peter Lynch value gives the stock a fair price of $70.34 giving the stock a margin of safety of 29%.
The stock is trading with a PE ratio of 10.87, higher than 65% of companies in the Global Truck Manufacturing industry, and is currently 29.22% below its 52-week high and 1.82% above its 52-week low.
The company has two industry segments: design, manufacture and distribution of light-, medium- and heavy-duty trucks and related aftermarket parts; and finance and leasing products and services provided to customers and dealers. The company and its subsidiaries design and manufacture heavy-duty diesel trucks marketed under the Kenworth, Peterbilt and DAF nameplates.
Third quarter was the second-best quarter in PACCAR’s 110-year history, and results reflect the benefits of increased truck sales in North America and Europe, and excellent aftermarket parts and financial services results worldwide. Diluted earnings per share had an increase of 16% compared to the third quarter of 2014. PACCAR posted an 8.9% after-tax return on revenues in the third quarter versus a 7.5% after-tax return on revenues a year ago.
The company's main shareholder among the gurus is Chris Davis (Trades, Portfolio) with a stake of 1.27% of outstanding shares followed by HOTCHKIS & WILEY with 0.84% and NWQ Managers (Trades, Portfolio) with 0.32% of outstanding shares.
Twenty-First Century Fox Inc. (FOXA) is trading at $30, and the Peter Lynch value gives the stock a fair price of $36.13, giving the stock a margin of safety of 17%.
The stock is trading with a PE ratio of 8.16, higher than 88% of companies in the Global Media - Diversified industry and is currently 22.84% below its 52-week high and 32.84% above its 52-week low.
The company is a media and entertainment company with operations in the following segments: (i) Cable Network Programming; (ii) Television; (iii) Filmed Entertainment, and (iv) Other, Corporate and Eliminations. The activities of the company are conducted principally in the United States, the United Kingdom, Continental Europe, Asia and Latin America.
Quarterly revenues in the last quarter decreased by 6% compared to the same quarter of a year before, the adverse impact of foreign exchange rates and the absence of revenues from Shine in the current quarter each impacted adjusted revenue growth by 6% in total.
Dodge & Cox is the company's leading shareholder among the gurus with a stake of 2.31% of outstanding shares, followed by Donald Yacktman (Trades, Portfolio) with 2.01% and Yacktman Fund (Trades, Portfolio) with 1.03%.
United Rentals Inc. (URI) is trading at $74, and the Peter Lynch value gives the stock a fair price of $154.25, giving the stock a margin of safety of 52%.
The stock is trading with a PE ratio of 12.09, higher than 67% of companies in the Global Rental & Leasing Services industry, and is currently 37.37% below its 52-week high and 31.93% above its 52-week low.
The company is an equipment rental company, and its network consists of locations in 49 states and 10 Canadian provinces. It is also present in more than 300 metropolitan markets in North America. The company has approximately 3,300 classes of equipment for rent to customers that include construction and industrial companies, manufacturers, utilities, municipalities, homeowners, and government entities.
Adjusted EPS for the third quarter was $2.57 per diluted share, compared with $2.20 per diluted share for the same period last year. Adjusted EBITDA and adjusted EBITDA margin was a quarterly company record at 50.3%, which had an increase of $19 million and 100 basis points, respectively, from the same period last year.
The company's main shareholder among the gurus is David Tepper with a stake of 0.9% of outstanding shares followed by Joel Greenblatt (Trades, Portfolio) with 0.46% and Westport Asset Management (Trades, Portfolio) with 0.29% of outstanding shares.
Wesco International Inc. (WCC) is trading at $46, and the Peter Lynch value gives the stock a fair price of $61, giving the stock a margin of safety of 25%.
The stock is trading with a PE ratio of 10.28, higher than 71% of companies in the Global Industrial Distribution industry and is currently 45.86% below its 52-week high and 5.78% above its 52-week low.
The company is a provider of electrical, industrial and communications maintenance, repair and operating (MRO) and original equipment manufacturers (OEM) products, construction materials and advanced supply chain management and logistics services.
During the last quarter net sales had a decrease of 7.4% which reflects continued foreign exchange headwinds and weakness in the industrial market and certain nonresidential construction sectors. Earnings per diluted share was $1.28 per share compared to $1.52 per share in the third quarter of 2014.
Columbia Wanger (Trades, Portfolio) is the company's leading shareholder among the gurus with a stake of 2.64% of outstanding shares, followed by Joel Greenblatt (Trades, Portfolio) with 1.48% and Chris Davis (Trades, Portfolio) with 0.7%.
