Oakmark Funds’ Bill Nygren (Trades, Portfolio) established three positions and sold two others during the first quarter.
A patient investor, Nygren invests in companies that are trading at a discount with the belief the stock price will climb higher to reflect the underlying business’ value. During the quarter, he established stakes in Delphi Automotive PLC (DLPH, Financial), Chesapeake Energy Corp. (CHK, Financial) and Moody’s Corp. (MCO, Financial).
Having previously sold out of Delphi Automotive in third-quarter 2014, Nygren purchased 2.2 million shares for an average price of $75.09 per share, giving it 1.1% portfolio space. This was his largest purchase for the quarter.
The vehicle parts manufacturer has a market cap of $23.9 billion; its shares were trading around $89.17 on Friday with a price-earnings (P/E) ratio of 20.8, a price-book (P/B) ratio of 9.3 and a price-sales (P/S) ratio of 1.4.
The Peter Lynch chart below illustrates the stock is trading above its fair value.
GuruFocus ranks Delphi’s financial strength 5 of 10 and its profitability and growth 8 of 10. The company pays a quarterly dividend of 29 cents per share. The trailing dividend yield and forward dividend yield are both 1.3%.
Among the gurus invested in the company, Chris Davis (Trades, Portfolio) has the largest holding with 1.4% of outstanding shares. A total of 11 gurus own the stock.
After exiting his position in Chesapeake Energy in first-quarter 2016, Nygren bought 20 million shares for an average price of $6.08 per share, expanding the portfolio 0.73%.
The oil and gas producer has a market cap of $4.5 billion; its shares were trading around $4.93 on Friday with a forward P/E ratio of 5.7 and a P/S ratio of 0.5.
According to the Peter Lynch chart below, the stock is trading below its fair value.
GuruFocus ranked Chesapeake’s financial strength 2 of 10 and its profitability and growth 4 of 10. The company does not currently pay a dividend.
Mason Hawkins (Trades, Portfolio) is the company’s largest guru shareholder with 5.5% of outstanding shares. In all, 12 gurus hold the stock.
For his final new purchase of the quarter, Nygren established a 1 million-share stake in Moody’s for an average price of $107.24 per share. The transaction had an impact of 0.7% on the portfolio.
The ratings and analytics company has a market cap of $22.7 billion; its shares were trading around $118.92 on Friday with a P/E ratio of 54.8 and a P/S ratio of 6.2.
Based on the Peter Lynch chart below, the stock appears to be trading above its fair value.
GuruFocus ranked Moody’s financial strength 5 of 10 and its profitability and growth 8 of 10. The company pays a quarterly dividend of 38 cents per share. The trailing dividend yield and forward dividend yield are both 1.3%. The company has grown its dividend at a rate of 24.1% per year for the past five years.
Warren Buffett (Trades, Portfolio) is Moody’s largest shareholder among the gurus with 12.9% of outstanding shares. In total, 15 gurus have positions.
Nygren exited his Halliburton Co. (HAL, Financial) and Sanofi SA (SNY, Financial) stakes during the quarter.
Having established an initial 2.2 million-share stake in Halliburton in fourth-quarter 2012 for $33.14 per share, Nygren gradually increased the holding to 6.8 million shares in third-quarter 2015. He began reducing the position in the first quarter of 2016, and sold his remaining 2.8 million shares for an average price of $53.78 per share during the first quarter. The trade had an impact of -1.02% on the portfolio.
The oilfield services company has a market cap of $39.2 billion; its shares were trading around $45.17 on Friday with a forward P/E ratio of 49.02, a P/B ratio of 4.4 and a P/S ratio of 2.4.
Nygren bought an initial holding of 2.6 million shares of Sanofi in first-quarter 2014. He paid an average price of $50.62 per share. By the end of third-quarter 2014, he had increased the holding to 5.67 million shares. He then began to reduce the holding in first-quarter 2016. He sold his remaining 3.2 million shares for $42.42 per share during the most recent quarter, impacting the portfolio by -0.8%.
The health care company has a market cap of $129.1 billion; its shares were trading around $50.15 on Friday with a P/E ratio of 24.6, a P/B ratio of 2 and a P/S ratio of 3.34.
Nygren’s current portfolio consists of 50 stocks and is valued at $16.2 billion. Financial services stocks have the heaviest portfolio weight at 33.9%.
Disclosure: I do not own any stocks mentioned in the article.
