Spiros Segalas (Trades, Portfolio)’ Harbor Capital Appreciation Fund gained five new holdings in the second quarter. They are Activision Blizzard Inc. (ATVI, Financial), Crown Castle International Corp. (CCI, Financial), Regeneron Pharmaceuticals Inc. (REGN, Financial), Vertex Pharmaceuticals Inc. (VRTX, Financial) and Snap Inc. (SNAP, Financial).
The fund invests in U.S. companies with market caps of at least $1 billion at the time of purchase that have strong balance sheets and earnings performance, a strong sales growth outlook, a history of high profitability and committed management. With the technology and consumer cyclical sectors representing a majority of the fund’s holdings, the current portfolio is composed of 58 stocks.
The investor’s largest purchase for the quarter was 6.04 million shares of Activision Blizzard for an average price of $55.29 per share, giving it 1.2% portfolio space.
The video game publisher has a market cap of $43.8 billion; its shares were trading around $58.09 per share on Monday with a price-earnings (P/E) ratio of 43.7, a price-book (P/B) ratio of 4.6 and a price-sales (P/S) ratio of 6.4.
The Peter Lynch chart below shows the stock is trading above its fair value.
GuruFocus ranked the company’s financial strength 6 of 10 and its profitability and growth 8 of 10. The company’s trailing dividend yield is 0.53%, and the forward dividend yield is 0.52%. Over the past five years, Activision Blizzard has grown its dividend at a rate of 9.1% per year.
Steve Mandel (Trades, Portfolio) is the company’s largest guru shareholder with 3.3% of outstanding shares. In all, 13 gurus own the stock.
Segalas bought 1.8 million shares of Crown Castle for an average price of $98.26 per share, expanding the portfolio 0.66%.
The communication services company has a market cap of $36.4 billion; its shares were trading around $99.47 per share on Monday with a P/E ratio of 85, a P/B ratio of 4.9 and a P/S ratio of 8.6.
According to the Peter Lynch chart below, the stock is trading above its fair value.
GuruFocus ranked Crown Castle’s financial strength 4 of 10 and its profitability and growth 8 of 10. The company’s trailing dividend yield is 3.77% and its forward dividend yield is 3.84%.
With 1.5% of outstanding shares, Bill Gates (Trades, Portfolio) is the company’s largest shareholder among the gurus. In total, six other gurus also hold the stock.
After previously exiting Regeneron Pharmaceuticals in first-quarter 2017, Segalas established a 267,488-share position for an average price of $437.89 per share, giving it a portfolio weight of 0.4%.
The biopharmaceutical company has a market cap of $52.7 billion; its shares were trading around $494.5 on Monday with a P/E ratio of 59.7, a P/B ratio of 10.8 and a P/S ratio of 11.6.
Based on the Peter Lynch chart below, the stock appears to be trading well above its fair value.
GuruFocus ranked the company’s financial strength 7 of 10 and its profitability and growth 7 of 10. While it does not currently pay a dividend, Regeneron has grown its revenue at a rate of 30.2% per year and its earnings per share at a rate of 27.4% per year over the last three years.
The Vanguard Health Care Fund (Trades, Portfolio) is Regeneron’s largest guru shareholder with 3.4% of outstanding shares. A total of 10 gurus own the stock.
As he did with Regeneron, Segalas sold out of Vertex Pharmaceuticals in first-quarter 2017. He paid an average price of $120.34 per share for his new stake of 654,544 shares. The trade had an impact of 0.3% on the portfolio.
The pharmaceutical company has a market cap of $32.4 billion; its shares were trading around $129.91 per share on Monday with a P/E ratio of 185.6, a P/B ratio of 21.6 and a P/S ratio of 15.8.
The Peter Lynch chart below shows the stock is trading significantly above its fair value.
GuruFocus ranked Vertex’s financial strength 6 of 10 and its profitability and growth 4 of 10. The company does not currently pay a dividend, but it has grown its revenue by 8.9% over the past three years.
With 5.23% of outstanding shares, Vanguard is the company’s largest shareholder among the gurus. Ten gurus in all hold the stock.
Segalas’ final new purchase for the quarter was 2.55 million shares of Snap for an average price of $20.19 per share, giving it 0.22% portfolio space.
The social networking app has a market cap of $20.3 billion; its shares were trading around $17.19 on Monday with a P/B ratio of 13.2.
The chart below illustrates the trend in Snap’s share price since its initial public offering in March.
GuruFocus ranked the company’s financial strength 7 of 10 and its profitability and growth 2 of 10. Snap does not currently pay a dividend.
Frank Sands (Trades, Portfolio) is Snap’s largest shareholder among the gurus with 0.89% of outstanding shares. A total of 11 gurus have a position in the stock.
Segalas added to many other positions during the quarter, including Broadcom Ltd. (AVGO, Financial), Nike Inc. (NKE, Financial), Apple Inc. (AAPL, Financial), Netflix Inc. (NFLX, Financial) and Allergan PLC (AGN, Financial).
Disclosure: I do not own any stocks mentioned in the article.
