1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
James Li
James Li
Articles (275)  | Author's Website |

Ken Heebner Goes 3-for-3 in 2nd Quarter

Guru reports quarterly portfolio

August 11, 2017 | About:

Ken Heebner (Trades, Portfolio), co-founder of Capital Growth Management, invested in three companies during the second quarter: Copa Holdings SA (NYSE:CPA), Royal Caribbean Cruises Ltd. (NYSE:RCL) and Alibaba Group Holding Ltd. (NYSE:BABA). The guru also axed his positions in Goldman Sachs Group Inc. (NYSE:GS), NVIDIA Corp. (NASDAQ:NVDA) and Teradyne Inc. (NYSE:TER).

Copa Holdings and Royal Caribbean

Heebner purchased 619,100 shares of Copa and 567,000 shares of Royal Caribbean, increasing his portfolio 6.14% in the aggregate. The former averaged $115.05 per share while the latter averaged $105.98 per share.

Copa, a Panama airline, reported net income of $63 million during the quarter, up $8.5 million from prior-year quarter net income. The earnings results, according to management, reflect “outstanding commercial execution and improved demand trends.” Based on such trends, management expects operating margins between 16% and 18% for the year.

Royal Caribbean said second-quarter earnings increased 60% from the prior-year quarter as “strong close-in demand for cruise [travel] bolstered the quarter,” according to CEO Richard Fain. The cruise travel company’s profitability ranks a solid 8 as the company has expanding operating margins and consistent revenue growth. Royal Caribbean’s Piotroski F-score ranks 7, driven by increasing gross margins and asset turnover.

Alibaba

Heebner invested in 403,000 shares of Alibaba at an average price of $123.4 per share. The guru increased his portfolio 2.6% with this transaction.

1989103419.png

Alibaba, a Chinese online retailer, reported a 56% year-over-year increase in fiscal 2017 revenues, driven by the company’s robust core businesses and “the positive momentum of [Alibaba’s] emerging businesses,” according to Chief Financial Officer Maggie Wu. The company has a GuruFocus business predictability rank of four stars based on consistent revenue growth during the past five years.

Several other gurus invested in Alibaba as the company offers good growth potential, including Daniel Loeb (Trades, Portfolio), Ken Fisher (Trades, Portfolio) and the Matthews China Fund (Trades, Portfolio). Fisher increased his position to 10,318,873 shares, which represents the second-largest stake among gurus.

Goldman Sachs

Heebner closed his position in Goldman Sachs, selling his 335,000 shares at an average price of $222.11 per share. The guru pared his portfolio 3.40% with this transaction.

Goldman Sachs has a modest financial strength rank of 5. The company has interest coverage of 1.33 and cash-debt ratio of 0.41, increasing Goldman’s chance of financial distress. Goldman has increased its long-term debt each year since 2014.

NVIDIA and Teradyne

Heebner sold his 621,000-share holding in NVIDIA at an average price of $126.48 per share. The guru trimmed his portfolio 2.98% with this transaction.

Although the company has strong financial strength and profitability, NVIDIA is significantly overvalued. The company’s share price is still near a 10-year high despite dropping 5.71% from its previous close of $164.74. NVIDIA also has price-book (P/B) and price-sales (P/S) ratios near respective 10-year highs, both ranking lower than more than 94% of global competitors.

2023751799.png

Heebner also closed his position in Teradyne, selling his 1.77 million-share stake at an average price of $33.72 per share. The semiconductor equipment company trades near a 10-year high of $33.48 per share despite having strong financial strength and profitability.

Disclosure: I do not have any positions in the stocks mentioned.

About the author:

James Li
I am an editorial assistant and researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

Visit James Li's Website


Rating: 0.0/5 (0 votes)

Comments

Please leave your comment:


GuruFocus has detected 6 Warning Signs with Copa Holdings SA $CPA.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.

Performances of the stocks mentioned by James Li


User Generated Screeners


grosimoZnart
contrarian_dave18_22_2017_Buyout Version2
LMONFiltro WACC
cirrosJENSX
kevkev136Eric
HaneiBreakout 1
pbarker46Hist dividend yield
pepebellMagic Formula Mod
HOLKLSUNew Top 10 Group NON Trends Q3
liuzishuNon-div M-score
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat

{{numOfNotice}}
FEEDBACK