NWQ Managers' Top 10 New Buys

Guru's most significant purchase in 3rd quarter was digital imaging company

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Nov 18, 2016
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NWQ Managers (Trades, Portfolio), which had double-digit returns in 2013 and 2014 that matched or exceeded the Standard & Poor’s 500, made 52 new buys in the third quarter. The following are the guru’s top 10 new purchases:

NWQ bought 1,534,198 shares of Electronics for Imaging Inc. (EFII, Financial), a California-based digital imaging company, for an average price of $45.73 per share. The transaction had a 1.09% impact on the portfolio.

The stock price has dropped about 5% since the end of the third quarter.

With the purchase, NWQ is Electronics for Imaging’s largest shareholder among the gurus. The stake is 3.28% of Electronics for Imaging’s outstanding shares.

Electronics for Imaging has a price-earnings (P/E) ratio of 58.62, a forward P/E of 15.04, a price-book (P/B) ratio of 2.46 and a price-sales (P/S) ratio of 2.09. GuruFocus gives Electronics for Imaging a Financial Strength rating of 6/10 and a Profitability and Growth rating of 7/10 with return on equity (ROE) of 4.25% that is lower than 55% of the companies in the Global Computer Systems industry and return on assets (ROA) of 2.39% that is lower than 53% of the companies in that industry.

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Electronics for Imaging sold for $43.22 per share at market close Friday. The DCF Calculator gives Electronics for Imaging a fair value of $7.92.

The guru purchased 1,963,616 shares of GameStop Corp. (GME, Financial), a Texas-based retailer of video games, consumer electronics and wireless services, for an average price of $29.15 per share. The deal had a 0.79% impact on the portfolio.

NWQ became GameStop’s leading shareholder with the buy. The stake is 1.89% of GameStop’s outstanding shres.

GameStop has a P/E ratio of 6.25, a forward P/E of 5.54, a P/B of 1.12 and a P/S of 0.28. GuruFocus gives GameStop a Financial Strength rating of 7/10 and a Profitability and Growth rating of 7/10 with ROE of 19.30% that is higher than 83% of the companies in the Global Specialty Retail industry and ROA of 9.20% that is higher than 82% of the companies in that industry.

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GameStop sold for $23.46 per share Friday. The DCF Calculator gives GameStop a fair value of $40.24 with a 42% margin of safety.

NWQ invested in 1,272,858 shares of Macy’s (M, Financial), a nationwide retailer headquartered in Cincinnati, for an average price of $36.24 per share. The transaction had a 0.68% impact on the portfolio.

T Rowe Price Equity Income Fund (Trades, Portfolio) is Macy’s leading shareholder among the gurus with a stake of 3,295,700 shares. The stake is 1.08% of Macy’s outstanding shares.

Macy’s has a P/E ratio of 20.36, a forward P/E of 12.66, a P/B ratio of 3.49 and a P/S ratio of 0.52. GuruFocus gives Macy’s a Financial Strength rating of 4/10 and a Profitability and Growth rating of 7/10 with ROE of 17.03% that is higher than 79% of the companies in the Global Department Stores industry and ROA of 3.31% that is higher than 57% of the companies in that industry.

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Macy’s sold for $43.03 per share Friday. The DCF Calculator gives Macy’s a fair value of $22.58.

The guru bought 1,691,964 shares of Symantec Corp. (SYMC, Financial), a California-based technology company, for an average price of $22.74 per share. The deal had a 0.62% impact on the portfolio.

Dodge & Cox is Symantec’s leading shareholder among the gurus with a stake of 38,905,167 shares. The stake is 6.24% of Symantec’s outstanding shares.

Symantec has a 7.22 P/E ratio, a forward P/E of 21.46, a P/B ratio of 3.86 and a P/S ratio of 4.19. GuruFocus gives Symantec a Financial Strength rating of 4/10 and a Profitability and Growth rating of 5/10 with ROE of 48.83% that is higher than 96% of the companies in the Global Software – Application industry and ROA of 17.09% that is higher than 91% of the companies in that industry.

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Symantec sold for $23.75 per share Friday. The DCF Calculator gives Symantec a fair value of $-14.34.

NWQ purchased 1,640,608 shares of SK Telecom (SKM, Financial), a South Korean wireless telecommunications company, for an average price of $21.99 per share. The transaction had a 0.54% impact on the portfolio.

Previously NWQ held a position in SK Telecom from the fourth quarter of 2012 until the third quarter of 2013.

Sarah Ketterer (Trades, Portfolio) is SK Telecom’s leading shareholder among the gurus with a stake of 3,108,596 shares. The stake is 0.49% of SK Telecom’s outstanding shares.

SK Telecom has a P/E ratio of 10.30, a forward P/E of 14.49, a P/B ratio of 0.99 and a P/S ratio of 0.90. GuruFocus gives SK Telecom a Financial Strength rating of 5/10 and a Profitability and Growth rating of 6/10 with ROE of 9.88% that is higher than 59% of the companies in the Global Telecom Services industry and ROA of 5.35% that is higher than 70% of the companies in that industry.

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SK Telecom sold for $20.84 per share Friday. The DCF Calculator gives SK Telecom a fair value of $21.59 with a 3% margin of safety.

NWQ purchased 319,519 shares of Toyota Motor Corp. (TM, Financial), a Japanese auto company, for an average price of $114.47 per share. The deal had a 0.54% impact on the portfolio.

Previously NWQ held shares of Toyota in its portfolio from the fourth quarter of 2012 until the fourth quarter of 2013.

Jim Simons (Trades, Portfolio) is Toyota’s leading shareholder among the gurus with 989,400 shares, which is 0.07% of Toyota’s outstanding shares.

Toyota has a P/E ratio of 9.48, a forward P/E of 11.26, a P/B ratio of 1.11 and a P/S ratio of 0.69. GuruFocus gives Toyota a Financial Strength rating of 5/10 and a Profitability and Growth rating of 7/10 with ROE of 11.93% that is higher than 63% of the companies in the Global Auto Manufacturers industry and ROA of 4.29% that is higher than 53% of the companies in that industry.

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Toyota sold for $114.04 per share Friday. The DCF Calculator gives Toyota a fair value of $124.7 with a 9% margin of safety.

The guru invested in 579,710 shares of Royal Dutch Shell PLC (RDS.B, Financial), an oil and gas company with offices in The Hague and London, for an average price of $53.53 per share. The transaction had a 0.44% impact on the portfolio.

NWQ held shares in Royal Dutch Shell in 2013, selling the shares in the fourth quarter of that year.

The purchase made the guru Royal Dutch Shell’s leading shareholder among the gurus.

Royal Dutch Shell has a P/E ratio of 52.28, a forward P/E of 13.62, a P/B ratio of 1.14 and a P/S ratio of 0.88. GuruFocus gives Royal Dutch Shell a Financial Strength rating of 5/10 and a Profitability and Growth rating of 5/10 with ROE of 2.26% and ROA of 1.05% that are lower than 54% of the companies in the Global Oil & Gas Integrated industry.

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Royal Dutch Shell sold for $52.04 per share Friday. The DCF Calculator gives Royal Dutch Shell a fair value of $11.56.

NWQ invested in 1,013,165 shares of Cray Inc. (CRAY, Financial), a Seattle-based supercomputer manufacturer, for an average price of $25.51 per share. The deal had a 0.35% impact on the portfolio.

Mairs and Power (Trades, Portfolio) is Cray’s leading shareholder among the gurus with a stake of 3,081,521 shares. The stake is 7.56% of Cray’s outstanding shares.

Cray has a P/B ratio of 1.58 and a P/S ratio of 1.37. GuruFocus gives Cray a Financial Strength rating of 7/10 and a Profitability and Growth rating of 6/10 with ROE of -4.26% and ROA of -2.92% that are lower than 77% of the companies in the Global Computer Systems industry.

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Cray sold for $19.25 per share Friday. The DCF Calculator gives Cray a fair value of $-5.78.

NWQ purchased 713,868 shares of Canadian Natural Resources (CNQ, Financial), a Calgary, Alberta-based oil and gas company, for an average price of $31.06 per share. The transaction had a 0.33% impact on the portfolio.

NWQ held a long-term position in Canadian Natural Resources that it divested by the first quarter of 2015.

T Rowe Price Equity Income Fund (Trades, Portfolio) is Canadian Natural Resources’ leading shareholder among the gurus with a stake of 5,675,000 shares. The stake is 0.51% of Canadian Natural Resources’ outstanding shares.

Canadian Natural Resources has a forward P/E of 34.60, a P/B ratio of 1.86 and a P/S ratio of 4.28. GuruFocus gives Canadian Natural Resources a Financial Strength rating of 4/10 and a Profitability and Growth rating of 5/10 with ROE of -2.39% that is higher than 78% of the companies in the Global Oil & Gas E&P industry and ROA of -1.09% that is higher than 81% of the companies in that industry.

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Canadian Natural Resources sold for $31.9 per share Friday. The DCF Calculator gives Canadian Natural Resources a fair value of $-4.81.

NWQ bought 1,632,667 shares of Flex Ltd. (FLEX, Financial), an electronics and industrial products company, for an average price of $12.88 per share. The deal had a 0.32% impact on the portfolio.

Flex’s leading shareholder among the gurus is PRIMECAP Management (Trades, Portfolio) with a stake of 50,913,657 shares. The stake is 9.43% of Flex’s outstanding shares.

Flex has a P/E ratio of 24.25, a forward P/E of 12.09, a P/B ratio of 3.00 and a P/S ratio of 0.33. GuruFocus gives Flex a Financial Strength rating of 5/10 and a Profitability and Growth rating of 6/10 with ROE of 12.32% that is higher than 75% of the companies in the Global Contract Manufacturers industry and ROA of 2.48% that is lower than 52% of the companies in that industry.

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Flex sold for $14.03 per share Friday. The DCF Calculator gives Flex a fair value of $6.15.

Disclosure: I do not own any stocks mentioned in this article.

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