First Pacific Advisors Slashes Stake in CVS Health

Guru nearly triples stake in United Technologies, invests in stake in Esterline Technologies

Dec 17, 2015

First Pacific Advisors (Trades, Portfolio), a Los Angeles-based investment management firm, has a preference for stocks in the technology and financial services sectors, but its most eye-popping deal in the third quarter was the reduction of a stake in the health care sector.

First Pacific Advisors (Trades, Portfolio)’ most significant third-quarter transaction was the reduction of its stake in CVS Health Corp. (CVS, Financial), a Woonsocket, Rhode Island-based health care company, by more than 85%. First Pacific sold 3,939,930 shares for an average price of $105.29 per share. The deal had a -3.38% impact on First Pacific’s portfolio.

CVS Health has a market cap of $106.16 billion and an enterprise value of $130.38 billion. It has a P/E of 21.6, a forward P/E of 16.8, a P/B of 2.9 and a P/S of 0.7. GuruFocus has given CVS Health a Financial Strength rating of 8/10 and a Profitability and Growth rating of 8/10.

CVS Health sold for $95.7 per share Thursday.

First Pacific Advisors (Trades, Portfolio) also reduced its stake in Express Scripts Holding Co. (ESRX, Financial), a St. Louis-based health care company, by nearly 67%. First Pacific sold 3,106,605 shares for an average price of $87.1 per share. The transaction had a -2.25% impact on First Pacific’s portfolio.

Express Scripts has a market cap of $59.17 billion and an enterprise value of $74.42 billion. It has a P/E of 27.1, a forward P/E of 14.4, a P/B of 3.6 and a P/S of 0.6. GuruFocus has given Express Scripts a Financial Strength rating of 7/10 and a Profitability and Growth rating of 8/10.

On Thursday Express Scripts sold for $87.25 per share.

First Pacific Advisors (Trades, Portfolio) trimmed its stake in Thermo Fisher Scientific Inc. (TMO, Financial), a Waltham, Massachusetts-based laboratory equipment company, by nearly 44%. First Pacific sold 1,514,850 shares for an average price of $130.28 per share. The deal had a -1.6% impact on First Pacific’s portfolio.

Thermo Fisher has a market cap of $55.2 billion and an enterprise value of $68.01 billion. It has a P/E of 28.2, a forward P/E of 16.8, a P/B of 2.7 and a P/S of 3.3. GuruFocus has given Thermo Fisher a Financial Strength rating of 7/10 and a Profitability and Growth rating of 9/10.

Thermo Fisher sold for $138.48 per share Thursday.

First Pacific Advisors (Trades, Portfolio) nearly tripled its stake in United Technologies Corp. (UTX, Financial), a Hartford, Connecticut-based conglomerate, acquiring 3,700,630 shares for an average price of $97.82 per share and making it the sixth-most valuable stake in First Pacific’s portfolio. The transaction had a 2.85% impact on that portfolio.

United Technologies has a market cap of $84 billion and an enterprise value of $102.72 billion. It has a P/E of 14.6, a forward P/E of 14.2, a P/B of 2.7 and a P/S of 1.3. GuruFocus has given United Technologies a Financial Strength rating of 7/10 and a Profitability and Growth rating of 8/10.

On Thursday United Technologies sold for $94.56 per share.

First Pacific Advisors (Trades, Portfolio) invested in a 3,168,360-share stake in Esterline Technologies (ESL, Financial), an Indianapolis-based supplier of products for aerospace and defense customers, for an average price of $85.25 per share. The deal had a 1.97% impact on First Pacific’s portfolio.

Esterline has a market cap of $2.48 billion and an enterprise value of $3.22 billion. It has a P/E of 46.4, a forward P/E of 14.8, a P/B of 1.6 and a P/S of 1.3. GuruFocus has given Esterline a Financial Strength rating of 8/10 and a Profitability and Growth rating of 7/10.

With the purchase, First Pacific Advisors (Trades, Portfolio) became Esterline’s leading shareholder among the gurus. Steven Romick (Trades, Portfolio), Michael Dell (Trades, Portfolio), Jim Simons (Trades, Portfolio), Robert Olstein (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio) and Steven Cohen (Trades, Portfolio) have shares of Esterline in their portfolios.

Esterline sold for $83.55 per share Thursday.

First Pacific Advisors (Trades, Portfolio) acquired a 1,519,210-share stake in Baidu Inc. (BIDU, Financial), a Beijing-based Internet services company, for an average price of $164.85 per share. The transaction had a 1.81% impact on First Pacific’s portfolio.

Baidu has a market cap of $68.37 billion and an enterprise value of $63.44 billion. It has a P/E of 36.4, a forward P/E of 28.3, a P/B of 7.8 and a P/S of 7.3. GuruFocus has given Baidu a Financial Strength rating of 9/10 and a Profitability and Growth rating of 7/10.

On Thursday Baidu sold for $197.7 per share.

First Pacific Advisors (Trades, Portfolio) sold its 2,169,396-share stake in Medtronic PLC (MDT, Financial), a medical equipment company with offices in Dublin and Fridley, Minnesota, for an average price of $73.65 per share. The divestiture had a -1.31% impact on First Pacific’s portfolio.

Medtronic has a market cap of $142 billion and an enterprise value of $160.62 billion. It has a P/E of 41.3, a forward P/E of 18.1, a P/B of 2.2 and a P/S of 4.0. GuruFocus has given Medtronic a Financial Strength rating of 7/10 and a Profitability and Growth rating of 7/10.

Medtronic sold for $78.62 per share Thursday.

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