John Linehan began his investment career shortly after he graduated with a bachelor's from Amherst College and an MBA from Stanford. After graduating from Stanford, Linehan spent the next nine years working at Bankers Trust and E.T Petroleum before he accepted a position as an analyst at T. Rowe Price in 1998.
Linehan became head of U.S. equity in 2009 and became portfolio manager of the T. Rowe Price Equity Income Fund in November 2015. Linehan had big shoes to fill after taking over for Brian Rogers who had managed the fund since 1985. Rogers had a very respectable 10.69% return during the 30 years that he managed the Equity Income Fund.
In the first quarter of 2016, the fund purchased 4,206,100 shares of CF Industries Holdings Inc. (CF, Financial).
CF Industries Holdings was founded in 1946 by a group of farm cooperatives with a need for a reliable source of fertilizer. The company was originally known as Central Farmers Fertilizer Company, headquartered in Chicago. Today CF Industries has built their market cap to $7.23 billion and are among the global leaders in both nitrogen and phosphate fertilizer production and distribution.
CF Industries Industries has four good signs according to GuruFocus. CF Industries' operating margin is in expansion, which is usually a good sign. The dividend yield is close to a 10-year high at 3.86%, ranking it above 66% of the companies in the industry. The P/B ratio is close to a five-year low at 1.76. The P/S ratio is also close to a three-year low. CF Industries' P/S ratio is 1.68, which is close to the three-year low of 1.63.
Below is a Peter Lynch chart for CF Industries.
It is possible that John Linehan decided to purchase 4,206,100 shares of CF Industries Holdings because the company has multiple good signs and the company's book value has grown at an average rate of 20% annually over the previous 10 years. The company is also trading below its intrinsic value, which provides a margin of safety for Linehan. CF Industries Holdings is also a global leader within an industry that has proven it can continue business through recessions. During the 1970s when there were major challenges to the U.S economy, CF Industries was able to remain strong, which decreases the probability of the company faltering if there was another recession in the future.
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