David Winters (Trades, Portfolio) of Wintergreen Advisors extended three ongoing investment trends in the second quarter, divesting a stock that had been reduced gradually for more than a year and trimming two others that had been reduced since at least the start of this year.
The guru sold out a 318,485-share holding in Coca-Cola (KO, Financial), a carbonated soft drink maker based in Atlanta, for an average price of $45.21 per share. The divestiture had a -5.3% impact on the portfolio.
Before selling out the holding, the guru sold portions of it in the first, third and fourth quarters of 2015 as well as the first quarter of this year.
Warren Buffett (Trades, Portfolio) is Coca-Cola’s leading shareholder among the gurus with a stake of 400 million shares. The stake is 9.27% of Coca-Cola’s outstanding shares and 13.98% of Buffett’s total assets.
Coca-Cola has a price-earnings (P/E) ratio of 24.36, a forward P/E of 20.83, a price-book (P/B) ratio of 6.84 and a price-sales (P/S) ratio of 4.27. GuruFocus gives Coca-Cola a Financial Strength rating of 6/10 and a Profitability and Growth rating of 7/10 with return on equity (ROE) of 28.95% that is higher than 90% of the companies in the Global Beverages – Soft Drinks industry and return on assets (ROA) of 8.24% that is higher than 68% of the companies in that industry.
Coca-Cola sold for $42.36 per share at market close Thursday. The DCF Calculator gives Coca-Cola a fair value of $19.84.
The guru reduced the stake in Reynolds American Inc. (RAI, Financial), the second-largest tobacco company in the U.S., by almost 6%. The stake was pared for the sixth consecutive quarter and the eighth quarter overall since the end of 2013. The guru sold 109,451 shares for an average price of $50.26 per share in a transaction that had a -1.98% impact on the portfolio.
The latest reduction left a stake of 1,872,969 shares that is 0.13% of Reynolds’ outstanding shares and 37.57% of the guru’s total assets. Pioneer Investments (Trades, Portfolio) is Reynolds’ leading shareholder among the gurus with a stake of 6,402,122 shares. The stake is 0.45% of Reynolds’ outstanding shares and 1.28% of Pioneer’s total assets.
Reynolds has a P/E of 13.04, a forward P/E of 18.69, a P/B of 3.15 and a P/S of 5.27. GuruFocus gives Reynolds a Financial Strength rating of 5/10 and a Profitability and Growth rating of 7/10 with ROE of 27.13% that is higher than 61% of the companies in the Global Tobacco industry and ROA of 9.89% that is higher than 59% of the companies in that industry.
Reynolds American sold for $47.27 per share Thursday. The DCF Calculator gives Reynolds American a fair value of $46.62.
Reynolds American announced Thursday that former U.S. House Speaker John Boehner has been appointed to its board of directors. Boehner is known to smoke Camel cigarettes, one of Reynolds American’s most popular brands.
The guru also more than halved the holding in Baker Hughes Inc. (BHI, Financial), a Houston-based oilfield services company, with the sale of 45,810 shares for an average price of $45.27 per share. The deal had a -0.72% impact on the portfolio.
The guru also sold 17% of the holding in the first quarter.
Jeff Ubben (Trades, Portfolio) is Baker Hughes’ leading shareholder among the gurus with a stake of 38,886,200 shares. The stake is 9.09% of Baker Hughes’ outstanding shares and 15.93% of Ubben’s total assets.
Baker Hughes has a P/B of 1.49 and a P/S of 1.75. GuruFocus gives Baker Hughes a Financial Strength rating of 6/10 and a Profitability and Growth rating of 6/10 with ROE of -19.12% that is lower than 67% of the companies in the Global Oil & Gas Equipment & Services industry and ROA of -12.97% that is lower than 69% of the companies in that industry.
Baker Hughes sold for $49.18 per share Thursday. The DCF Calculator gives Baker Hughes a fair value of $-75.13.
Disclosure: I do not own any stocks mentioned in this article.
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