Auxier Asset Management founder Jeff Auxier (Trades, Portfolio) disclosed Nov. 9 he acquired six stocks in the third quarter.
According to the investment philosophy described on the firm’s website, Auxier believes compounding “is the most valuable and underappreciated investment concept.” He strives to identify undervalued companies that meet several criteria, including strong or improving fundamentals, consistent operating results, a substantial competitive advantage, high returns on capital, understandable products and shareholder-oriented management, among others. Managing a portfolio of 152 stocks, he invests largely in the health care, consumer defensive and financial services sectors.
The guru invested in DowDuPont Inc. (DWDP, Financial), Aon PLC (AON, Financial), Alphabet Inc. (GOOG, Financial), Granite Construction Inc. (GVA, Financial), Taiwan Semiconductor Manufacturing Co. Ltd. (TSM, Financial) and Becle SAB de CV (BCCLF, Financial).
DowDuPont
In his largest trade of the quarter, Auxier gained 175,198 shares of DowDuPont for an average price of $65.88 per share, giving it 2.46% portfolio space.
It is possible these shares were obtained as part of the merger deal between Dow Chemical and E.I. du Pont de Nemours & Co., which closed Aug. 31. According to the terms of the initial agreement in December 2015, Dow shareholders would receive one share of the new entity per each share owned while DuPont shareholders would receive 1.28 shares.
The Michigan-based company has a market cap of $162.75 billion; its shares were trading around $69.54 on Monday with a price-earnings (P/E) ratio of 33.64, a price-book (P/B) ratio of 1.59 and a price-sales (P/S) ratio of 1.61.
The Peter Lynch chart below shows the stock is trading above its fair value.
GuruFocus ranked DowDuPont’s financial strength 5 of 10 and its profitability and growth 5 of 10. The company’s trailing dividend yield is 2.63%, and its forward dividend yield is 2.17%. The dividend payout ratio is 91%.
Of the eight gurus invested in the company, Daniel Loeb (Trades, Portfolio) has the largest position with 0.64% of outstanding shares. The T Rowe Price Equity Income Fund (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Manning & Napier Advisors Inc., Mario Gabelli (Trades, Portfolio), First Eagle Investment (Trades, Portfolio) and Ken Fisher (Trades, Portfolio) are also shareholders.
Aon
Auxier bought 1,412 shares of Aon for an average price of $139.44 per share, expanding the portfolio 0.04%.
The London-based consultant company has a market cap of $35.8 billion; its shares were trading around $142.05 on Monday with a P/E ratio of 22.31, a P/B ratio of 6.94 and a P/S ratio of 3.17.
According to the Peter Lynch chart below, the stock is trading above its fair value.
GuruFocus ranked Aon’s financial strength 5 of 10 and its profitability and growth 8 of 10. The company’s trailing dividend yield is 0.98%, and its forward dividend yield is 1.01%. The payout ratio is 39%.
First Pacific Advisors (Trades, Portfolio) has the largest position in Aon among the gurus with 1.95% of outstanding shares. Other top guru shareholders are Steven Romick (Trades, Portfolio), Bill Nygren (Trades, Portfolio), NWQ Managers (Trades, Portfolio) and Wallace Weitz (Trades, Portfolio).
Alphabet
The investor purchased 215 shares of Alphabet for an average price of $930.63 per share, impacting the portfolio 0.04%. He previously exited a position in the stock in the second quarter of 2014.
The California-based parent company of Google has a market cap of $720.47 billion; its shares were trading around $1,028.78 on Monday with a P/E ratio of 34.94, a P/B ratio of 4.62 and a P/S ratio of 7.34.
Based on the Peter Lynch chart below, the stock appears to be trading above its fair value.
GuruFocus ranked Alphabet’s financial strength 8 of 10 and its profitability and growth 8 of 10. The company does not pay a dividend.
Among the 47 gurus invested in Alphabet, Dodge & Cox has the largest holding with 0.47% of outstanding shares. Other top guru shareholders include PRIMECAP Management (Trades, Portfolio), Chris Davis (Trades, Portfolio), Pioneer, Mason Hawkins (Trades, Portfolio) and Frank Sands (Trades, Portfolio).
Granite Construction
After closing a position in Granite Construction in the first quarter, Auxier established a 3,700-share holding for $52.58 per share. The trade had an impact of 0.04% on the portfolio.
The California-based construction company has a market cap of $2.53 billion; its shares were trading around $63.61 with a P/E ratio of 49.31, a P/B ratio of 2.78 and a P/S ratio of 0.89.
The Peter Lynch chart below indicates the stock is trading above its fair value.
GuruFocus ranked Granite’s financial strength 7 of 10 and its profitability and growth 6 of 10. The company’s trailing dividend yield and forward dividend yield are both 0.82%. The payout ratio is 40%.
With 0.18% of outstanding shares, Steven Cohen (Trades, Portfolio) is Granite’s largest guru shareholder. Jim Simons (Trades, Portfolio) is also a shareholder.
Taiwan Semiconductor
Auxier invested in 5,487 shares of Taiwan Semiconductor for an average price of $36.51 per share. The position was given a portfolio weighting of 0.04%.
The Taiwanese manufacturer of semiconductor chips has a market cap of $207.6 billion; its shares were trading around $41.78 on Monday with a P/E ratio of 17.94, a P/B ratio of 4.65 and a P/S ratio of 6.44.
According to the Peter Lynch chart below, the stock is trading above its fair value.
GuruFocus ranked Taiwan Semiconductor’s financial strength 8 of 10 and its profitability and growth 9 of 10. The company’s trailing dividend yield and forward dividend yield are both 2.78%. The payout ratio is 52%.
With 0.65% of outstanding shares, Fisher is the company’s largest guru shareholder. Sarah Ketterer (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), Howard Marks (Trades, Portfolio), Pioneer and several others also hold the stock.
Becle
Auxier bought 12,500 shares of Becle SAB for an average price of $1.77 per share.
The Mexican beverage company, which produces Jose Cuervo tequila, has a market cap of $6.21 billion; its shares were trading around $1.66 on Monday with a P/E ratio of 61.25, a P/B ratio of 2.68 and a P/S ratio of 4.78.
Based on the Peter Lynch chart below, the stock appears to be trading well above its fair value.
GuruFocus ranked Becle’s financial strength 7 of 10 and its profitability and growth 4 of 10. The company does not pay a dividend.
Auxier is the only guru invested in Becle.
During the quarter, Auxier also added to several other positions including American International Group Inc. (AIG, Financial), Merck & Co. Inc. (MRK, Financial), Wells Fargo & Co. (WFC, Financial) and CVS Health Corp. (CVS, Financial).
Disclosure: I do not own any stocks mentioned.
