Robert L. Rodriguez, CFA, is the CEO of FPA Capital Fund. During the third quarter the fund’s largest sells were the following:
Its stake in Arconic Inc. (ARNC) was reduced by 68.20% with an impact of -3.44% on the portfolio.
The company manufactures and engineers lightweight metals. Its products include aluminum, titanium and nickel, which are used in aircraft, automobiles, commercial transportation, packaging, oil and gas, defense and industrial applications among others. During the third quarter due to the impact of curtailed and closed operations, lower alumina pricing and other pricing pressures, revenue decreased 6% year over year, and net income was $166 million, or 33 cents per share.
GuruFocus gives the stock a profitability and growth rating of 3 out of 10. The return on equity (ROE) of -3.58% and return on assets (ROA) of -1.05% are outperforming 64% of the companies in the Global Aluminum industry. Financial strength has a rating of 4 out of 10 with cash to debt of 0.18 that is below the industry median of 11.67.
The largest shareholder among the gurus is Steven Romick (Trades, Portfolio) with 10.42% of outstanding shares followed by Paul Singer (Trades, Portfolio) with 5.9%, First Pacific Advisors (Trades, Portfolio) with 4.67%, Manning & Napier Advisors Inc. with 1.92%, Mario Gabelli (Trades, Portfolio) with 0.21% and Pioneer Investments (Trades, Portfolio) with 0.13%.
The guru reduced its stake in Oracle Corp. (ORCL) by 18% with an impact of -1.66% on the portfolio.
The company develops, manufactures, markets, hosts and supports database and middleware software, application software, cloud infrastructure, hardware system including computer server, storage and networking products and related services. First-quarter revenue grew 12%; non-GAAP operating income was $3.4 billion, and non-GAAP operating margin was 39%.
GuruFocus gives the stock a profitability and growth rating of 7 out of 10. ROE of 19.23% and ROA of 8.07% are outperforming 74% of the companies in the Global Software – Infrastructure industry. Financial strength has a rating of 6 out of 10 with cash to debt of 1.27 that is below the industry median of 6.37.
First Eagle Investment (Trades, Portfolio) is the largest shareholder among the gurus with 0.96% of outstanding shares followed by Barrow, Hanley, Mewhinney & Strauss with 0.87%, Donald Yacktman (Trades, Portfolio) with 0.49%, Jeremy Grantham (Trades, Portfolio) with 0.43%, Romick with 0.39%, HOTCHKIS & WILEY with 0.37% and Ken Fisher (Trades, Portfolio) with 0.28%.
The guru reduced its stake in Microsoft Corp. (MSFT) by 40.23% with an impact of -0.71% on the portfolio.
The company is engaged in designing, manufacturing, selling devices and online advertising. Its products include operating systems for computing devices, servers, phones and other devices. Recently it announced that it has completed the acquisition of LinkedIn (LNKD) and third-quarter diluted earnings per share was 60 cents GAAP and 76 cents non-GAAP.
GuruFocus gives the stock a profitability and growth rating of 7 out of 10. ROE of 22.30% and ROA 8.80% are outperforming 77% of the companies in the Global Software - Infrastructure industry. Financial strength has a rating of 6 out of 10 with cash to debt of 1.83 that is below the industry median of 6.37.
The largest shareholder among the gurus is PRIMECAP Management (Trades, Portfolio) with 0.73% of outstanding shares followed by Dodge & Cox with 0.57%, Jeff Ubben (Trades, Portfolio) with 0.5%, Barrow, Hanley, Mewhinney & Strauss with 0.3%, Fisher with 0.24% and Grantham with 0.22%.
The guru reduced his stake in Qualcomm Inc. (QCOM) by 40.23% with an impact of -0.71% on the portfolio.
The company develops digital communication technology called CDMA (Code Division Multiple Access) and owns intellectual property applicable to products that implement any version of CDMA including patents, patent applications and trade secrets. Fourth-quarter revenues grew 13% year over year, and operating income increased 58%. The company reported an increase of 51% for net income and a 60% increase for diluted earnings per share.
GuruFocus gives the stock a profitability and growth rating of 8 out of 10. ROE of 18.56% and ROA of 11.22% are outperforming 87% of the companies in the Global Semiconductors industry. Financial strength has a rating of 7 out of 10 with cash to debt of 1.59 that is a few above the industry median of 1.57.
Barrow, Hanley, Mewhinney & Strauss is the largest shareholder among the gurus with 1.42% of outstanding shares followed by PRIMECAP Management 1.15%, Fisher with 0.66%, Grantham with 0.56%, Spiros Segalas (Trades, Portfolio) with 0.38%, Bill Nygren (Trades, Portfolio) with 0.32%, Manning & Napier Advisors with 0.32% and T Rowe Price Equity Income Fund (Trades, Portfolio) with 0.3%.
The firm reduced its stake in Cisco Systems Inc. (CSCO) by 14.58% with an impact of -0.69% on the portfolio.
The company is engaged in designing, manufacturing and selling of Internet Protocol (IP) based networking products and services related to the communications and information technology (IT) industry. First-quarter revenue grew 1% year over year, and non-GAAP earnings per share increased 3%.
GuruFocus gives the stock a profitability and growth rating of 9 out of 10. ROE of 17.14% and ROA of 8.99% are outperforming 84% of the companies in the Global Communication Equipment industry. Financial strength has a rating of 6 out of 10 with cash to debt of 2.04 that is below the industry median of 2.24.
The largest shareholder among the gurus is Dodge & Cox with 1.33% of outstanding shares followed by PRIMECAP Management with 0.55%, Yacktman with 0.51%, Grantham with 0.47%, Fisher with 0.31%, Yacktman Fund (Trades, Portfolio) with 0.27% and Romick with 0.26%.
The guru reduced its stake in Aon PLCĂ‚ (AON) by 8.95% with an impact of -0.5% on the portfolio.
The company provides risk management services, insurance and reinsurance brokerage and human resource consulting and outsourcing, delivering client value via effective risk management and workforce productivity solutions. During the third quarter revenue was flat while operating margin increased 30 basis points. Earnings per share grew 10%, and adjusted earnings per share grew 14%.
GuruFocus gives the stock a profitability and growth rating of 8 out of 10. ROE of 26.20% and ROA of 5.55% are outperforming 79% of the companies in the Global Insurance Brokers industry. Financial strength has a rating of 5 out of 10 with cash to debt of 0.15 that is below the industry median of 8.80.
Romick is another notable shareholder among the gurus, with 2.08% of outstanding shares followed by Nygren with 1.06%, NWQ Managers (Trades, Portfolio) with 0.4%, Wallace Weitz (Trades, Portfolio) with 0.19%, Charles de Vaulx (Trades, Portfolio) with 0.15%, Jim Simons (Trades, Portfolio) with 0.09% and Robert Olstein (Trades, Portfolio) with 0.03%.
The guru reduced its stake in American International Group Inc. (AIG) by 7.30% with an impact of -0.41% on the portfolio.
It is a holding company. Through its subsidiaries, it provides insurance and related services in the U.S. and abroad.
GuruFocus gives the stock a profitability and growth rating of 3 out of 10. ROE of 0.39% and ROA of 0.07% are underperforming 82% of the companies in the Global Insurance - Diversified industry. Financial strength has a rating of 5 out of 10 with cash to debt of 0.08.
The largest shareholder among the gurus is Carl Icahn (Trades, Portfolio) with 4.44% of outstanding shares followed by HOTCHKIS & WILEY with 1.59%, John Paulson (Trades, Portfolio) with 0.88%, Romick with 0.84%, First Eagle Investment with 0.81%, Barrow, Hanley, Mewhinney & Strauss with 0.74% and Nygren with 0.69%.
Disclosure: I do not own any shares of any stocks mentioned in this article.
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