Investment firm First Eagle Investment (Trades, Portfolio) reported it acquired 35 new positions in the third quarter. Its top five new purchases were Northrop Grumman Corp. (NOC, Financial), Applied Materials Inc. (AMAT, Financial), Pioneer Natural Resources Co. (PXD, Financial), Anheuser-Busch InBev SA (BUD, Financial) and EOG Resources Inc. (EOG, Financial).
Managing a portfolio of 348 stocks, First Eagle focuses on absolute returns and downside protection. It is largely invested in the basic materials, financial services, technology and energy sectors.
Northrop Grumman
Having previously exited a position in Northrop Grumman in fourth-quarter 2016, the firm established a new holding of 688,608 shares for an average price of $268.98 per share. The holding was given a portfolio weight of 0.44%.
The Virginia-based aerospace and defense company has a market cap of $52.76 billion; its shares were trading around $302.96 on Wednesday with a price-earnings (P/E) ratio of 22.59, a price-book (P/B) ratio of 8.13 and a price-sales (P/S) ratio of 2.08.
The Peter Lynch chart below shows the stock is trading above its fair value.
GuruFocus ranked Northrop Grumman’s financial strength 6 of 10 and its profitability and growth 8 of 10. The company’s trailing dividend yield is 1.25%, and its forward dividend yield is 1.33%. The dividend payout ratio is 28%.
Jim Simons (Trades, Portfolio) is the company’s largest guru shareholder with 0.72% of outstanding shares. A total of 10 gurus own the stock.
Applied Materials
After closing a position in Applied Materials in first-quarter 2015, First Eagle purchased a 1.8 million-share stake for an average price of $45.15 per share. The trade had an impact of 0.22% on the portfolio.
The Santa Clara, California-based manufacturer of semiconductor equipment has a market cap of $60.25 billion; its shares were trading around $56.49 on Wednesday with a P/E ratio of 20.11, a P/B ratio of 6.91 and a P/S ratio of 4.44.
According to the Peter Lynch chart below, the stock is trading above its intrinsic value.
GuruFocus ranked Applied Materials’ financial strength 7 of 10 and its profitability and growth 8 of 10. The company’s trailing dividend yield and forward dividend yield are both 0.71%. The payout ratio is 14%.
Of the 17 gurus invested in Applied Materials, PRIMECAP Management (Trades, Portfolio) has the largest holding with 0.42% of outstanding shares. Other guru shareholders include the T Rowe Price Equity Income Fund (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), David Carlson (Trades, Portfolio) and Ken Heebner (Trades, Portfolio).
Pioneer Natural Resources
The firm bought 510,483 shares of Pioneer Natural Resources for an average price of $143.84 per share, giving it 0.17% portfolio space. First Eagle previously sold out of the stock in the fourth quarter of 2014.
The Irving, Texas-based oil and gas producer has a market cap of $27.27 billion; its shares were trading around $160.38 on Wednesday with a P/E ratio of 216.61, a P/B ratio of 2.58 and a P/S ratio of 4.76.
Based on the Peter Lynch chart below, the stock appears to be trading above its fair value.
GuruFocus ranked Pioneer’s financial strength 6 of 10 and its profitability and growth 8 of 10. The company’s trailing dividend yield and forward dividend yield are both 0.05%. The payout ratio is 11%.
Among the 13 gurus invested in Pioneer, John Griffin (Trades, Portfolio) is the largest shareholder with 0.47% of outstanding shares. Other shareholders include Pioneer Investments (Trades, Portfolio), Wallace Weitz (Trades, Portfolio), Caxton Associates (Trades, Portfolio), Carlson, Steven Cohen (Trades, Portfolio), Simons, T Boone Pickens (Trades, Portfolio) and Ray Dalio (Trades, Portfolio).
Anheuser-Busch
First Eagle purchased 605,989 shares of Anheuser-Busch for an average price of $116.96 per share, giving it 0.16% portfolio space. The firm previously sold out of the stock in the fourth quarter of 2016.
The St. Louis-based brewer has a market cap of $230.18 billion; its shares were trading around $118.23 on Wednesday with a P/E ratio of 43.67, a P/B ratio of 3.04 and a P/S ratio of 3.76.
According to the Peter Lynch chart below, the stock is trading above its fair value.
GuruFocus ranked Anheuser-Busch’s financial strength 4 of 10 and its profitability and growth 6 of 10. The company’s trailing dividend yield is 3.30%, and its forward dividend yield is 3.23%. The payout ratio is 201%.
With 0.3% of outstanding shares, Ken Fisher (Trades, Portfolio) is the company’s largest guru shareholder. Lee Ainslie (Trades, Portfolio), Simons, Jeremy Grantham (Trades, Portfolio), Julian Robertson (Trades, Portfolio), Caxton, Weitz and Tom Russo (Trades, Portfolio) also own the stock.
EOG Resources
The firm established a 662,937-share holding of EOG Resources for an average price of $90.22 per share, expanding the portfolio 0.14%. First Eagle previously exited a position in the stock in third-quarter 2014.
The Houston-based oil and gas company has a market cap of 60.41 billion; its shares were trading around $104.48 on Wednesday with a P/E ratio of 5,224, a P/B ratio of 4.33 and a P/S ratio of 5.87.
Based on the Peter Lynch chart below, the stock appears to be trading above its intrinsic value.
GuruFocus ranked EOG’s financial strength 5 of 10 and its profitability and growth 6 of 10. The company’s trailing dividend yield is 0.64%, and its forward dividend yield is 0.63%. The payout ratio is 3,350%.
Pioneer has the largest position in EOG Resources with 0.48% of outstanding shares. Primecap, Simons and John Rogers (Trades, Portfolio) are other top guru shareholders.
Other stocks First Eagle established positions in during the quarter include NXP Semiconductors NV (NXPI, Financial), Monsanto Co. (MON, Financial), Western Digital Corp. (WDC, Financial), Intercontinental Exchange Inc. (ICE, Financial) and HD Supply Holdings Inc. (HDS, Financial).
Disclosure: I do not own any stocks mentioned.
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