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John Hussman Sells Infosys, Cisco, Aetna

A look at the guru's largest divestitures during the 4th quarter

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Mar 15, 2016
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John Hussman (Trades, Portfolio) is the president and principal shareholder of Hussman Strategic Advisors, the investment advisory firm that manages the Hussman Funds. He is also the president of the Hussman Investment Trust. The following were his largest sales during the fourth quarter.

He almost closed his stake in Infosys Ltd. (INFY), reducing it by 99.14% and the deal had an impact of –1.94% on the portfolio.

The company designs and delivers IT-enabled business solutions to its clients. The company provides technology, business consulting, outsourcing and engineering services to help clients in over 30 countries. During the third quarter, revenue grew 1.7% from the second quarter of 2016 and total operating expense increased by 1.8%.

GuruFocus gives the stock a profitability and growth rating of 7 out of 10 with positive returns of ROE of 5.22% and ROA of 1.77% that are over performing 87% of the companies in the Global Information Technology Services industry. Financial strength has a rating of 10 out of 10 with no debt.

The largest shareholder of the company among the gurus is

Ken Fisher (Trades, Portfolio) with 0.96% of outstanding shares, followed by Jeremy Grantham (Trades, Portfolio) with 0.07%, Sarah Ketterer (Trades, Portfolio) with 0.06% and  Bernard Horn (Trades, Portfolio) with 0.01%.

Hussman also almost closed his stake in Cisco Systems Inc. (CSCO), cutting it by 98.83% and the deal had an impact of -1.66% on the portfolio.

The company is engaged in designing, manufacturing and selling of IP-based networking products and services related to the communications and information technology industry. Fourth quarter revenue had an increase of 4% year over year and net income grew by 3.2%. The company reported a 4.7% increase for diluted EPS.

GuruFocus gives the stock a profitability and growth rating of 8 out of 10 with strong returns of ROE of 17.39% and ROA of 9.41% that are over performing 88% of the companies in the Global Communication Equipment industry. Financial strength has a rating of 6 out of 10, with a cash-to-debt of 2.45 that is above the industry median of 2.30.

The company’s largest shareholder among the gurus is Dodge & Cox with 1.35% of outstanding shares, followed by Donald Yacktman (Trades, Portfolio) with 0.62%,

Jeremy Grantham (Trades, Portfolio) with 0.6%, PRIMECAP Management (Trades, Portfolio) with 0.5%, First Pacific Advisors (Trades, Portfolio) with 0.33%, Yacktman Fund (Trades, Portfolio) with 0.32% and Ken Fisher (Trades, Portfolio) with 0.32%.

The investor exited his stake in Walgreens Boots Alliance Inc. (WBA) with an impact of -1.58% on the portfolio.

The company operates drugstores in the U.S. The company provides consumer goods and services, pharmacy, and health and wellness services in communities across America. It also offers products and services through drugstores, as well as through mail, telephone, online and mobile application.

GuruFocus gives the stock a profitability and growth rating of 7 out of 10 with strong returns of ROE of 15.49% and ROA of 6.83% that are over performing 77% of the companies in the Global Pharmaceutical Retailers industry. Financial strength has a rating of 6 out of 10, with a cash-to-debt of 0.18 that is below the industry median of 0.60.

Andreas Halvorsen (Trades, Portfolio) is the largest shareholder of the company among the gurus with 1.18% of outstanding shares, followed by Jana Partners (Trades, Portfolio) with 01.14%, Vanguard Health Care Fund (Trades, Portfolio) with 0.68%, Steve Mandel (Trades, Portfolio) with 0.68% and Bill Gates (Trades, Portfolio) with 0.32%.

The guru exited his position in Target Corp. (TGT) with an impact of -1.49% on the portfolio.

The company is engaged in operating general merchandise discount stores in the U.S. The company sells general merchandise and food. During the fourth quarter, sales increased 1.9% and adjusted EPS of $1.52 was in line with the company’s guidance of $1.48 to $1.58.

GuruFocus gives the stock a profitability and growth rating of 7 out of 10 with high returns of ROE of 24.61% and ROA of 8.23% that are over performing 87% of the companies in the Global Discount Stores industry. Financial strength has a rating of 7 out of 10, with a cash-to-debt of 0.32 that is below the industry median of 0.60.

The company’s largest shareholder among the gurus is James Barrow (Trades, Portfolio) with 2.25% of outstanding shares, followed by Dodge & Cox with 1.75%, HOTCHKIS & WILEY with 0.45%,

Mairs and Power (Trades, Portfolio) with 0.4%, NWQ Managers (Trades, Portfolio) with 0.17%, Jeremy Grantham (Trades, Portfolio) with 0.09% and Jim Simons (Trades, Portfolio) with 0.06%.

Hussman closed his stake in Zebra Technologies Corp. (ZBRA) with an impact of -1.45% on the portfolio.

It designs, manufactures, sells and supports a broad range of direct thermal and thermal transfer label printers, radio frequency identification printer/encoders, dye sublimation card printers, related accessories and support software.

GuruFocus gives the stock a profitability and growth rating of 7 out of 10 with negative returns of ROE of -14.17% and ROA of -2.60% that are under performing 89% of the companies in the Global Diversified Industrials industry. Financial strength has a rating of 6 out of 10, with a cash-to-debt of 0.06 that is far below the industry median of 1.02.

John Rogers (Trades, Portfolio) is the largest shareholder of the company among the gurus with 1.87% of outstanding shares, followed by Meridian Funds (Trades, Portfolio) with 1.22%, Chuck Royce (Trades, Portfolio) with 0.93%, Columbia Wanger (Trades, Portfolio) with 0.66% and Jim Simons (Trades, Portfolio) with 0.44%.

Hussman closed his position in Aetna Inc. (AET) by an impact of -1.38% on the portfolio.

The company offers traditional, voluntary and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life and disability plans, medical management capabilities, Medicaid health care management services, Medicare Advantage and Medicare supplement plans, workers' compensation administrative services and health information technology products and services, such as Accountable Care Solutions. During the fourth quarter operating revenue grew 2% and total revenue increased 2%. The company reported 38% increase for net income and 11% for operating earnings.

GuruFocus gives the stock a profitability and growth rating of 9 out of 10 with strong returns of ROE of 15.54% and ROA of 4.42% that are over performing 63% of the companies in the Global Health Care Plans industry. Financial strength has a rating of 7 out of 10, with a cash-to-debt of 0.71 that is below the industry median of 2.15.

The company’s largest shareholder among the gurus is

Vanguard Health Care Fund (Trades, Portfolio) with 2.5% of outstanding shares, followed by Larry Robbins (Trades, Portfolio) with 1.64%, Pioneer Investments (Trades, Portfolio) with 0.45%, Andreas Halvorsen (Trades, Portfolio) with 0.36%, Jeremy Grantham (Trades, Portfolio) with 0.2%, Richard Pzena (Trades, Portfolio) with 0.17% and Jim Simons (Trades, Portfolio) with 0.06%.

Hussman exited his stake in Laboratory Corp of America Hldgs (LH) with an impact of -1.24% on the portfolio.

Through its national network of laboratories, the company offers a broad range of clinical laboratory tests that are used by the medical profession in routine testing, patient diagnosis, and in the monitoring and treatment of disease. Revenue had an increase of 48.4% over the fourth quarter of last year and adjusted operating income was 16.4% of net revenue, compared to 16.5%, in the fourth quarter of 2014.

GuruFocus gives the stock a profitability and growth rating of 7 out of 10 with good returns of ROE of 9.93% and ROA of 3.38% that are over performing 65% of the companies in the Global Diagnostics & Research industry. Financial strength has a rating of 7 out of 10, with a cash-to-debt of 0.11 that is far below the industry median of 3.66.

Larry Robbins (Trades, Portfolio) is the largest shareholder of the company among the gurus with 5.56% of outstanding shares, followed by Andreas Halvorsen (Trades, Portfolio) with 3.16%, Chris Davis (Trades, Portfolio) with 1.75%, John Rogers (Trades, Portfolio) with 1.65% and Wallace Weitz (Trades, Portfolio) with 0.69%.

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