Delphi Management’s Scott Black (Trades, Portfolio) released his fourth-quarter portfolio on Feb. 1, listing 11 new positions.
As a follower of the Graham-Dodd school of value investing, the firm’s website says it invests in stocks that are at a “low absolute valuation,” taking only long positions. Delphi also makes it a priority to contact management at every company it invests in. The current portfolio of 84 stocks is largely composed of securities in the consumer cyclical and technology sectors.
Black’s top five new buys for the quarter were XL Group Ltd. (XL, Financial), Roche Holding AG (RHHBY, Financial), Hi-Crush Partners LP (HCLP, Financial), Perry Ellis International Inc. (PERY, Financial) and Tech Data Corp. (TECD, Financial).
XL Group
In his largest buy of the quarter, Black invested in 68,763 shares of XL Group for an average price of $38.80per share, giving it 1.38% portfolio space.
The Bermuda-based insurance company has a market cap of $9.79 billion; its shares were trading around $37.46 on Monday with a forward price-earnings (P/E) ratio of 9.93, a price-book (P/B) ratio of 0.85 and a price-sales (P/S) ratio of 0.90.
The Peter Lynch chart below suggests the stock is trading close to its fair value.
GuruFocus ranked XL Group’s financial strength 4 of 10 and its profitability and growth 6 of 10. The company’s trailing dividend yield is 2.29% and its forward dividend yield is 2.39%. The dividend payout ratio is 0%.
Barrow, Hanley, Mewhinney & Strauss is XL Group’s largest shareholder among the gurus with 6.67% of outstanding shares. Other guru shareholders include Richard Pzena (Trades, Portfolio), the T Rowe Price Equity Income Fund (Trades, Portfolio), Diamond Hill Capital (Trades, Portfolio) and Donald Smith (Trades, Portfolio).
Roche
The guru purchased a 72,710-share holding in Roche for an average price of $30.47 per share, expanding the portfolio 1.31%.
The Swiss pharmaceutical company has a market cap of $207.46 billion; its shares were trading around $29.62 on Monday with a price-earnings ratio of 20.39, a price-book ratio of 8.59 and a price-sales ratio of 3.90.
According to the Peter Lynch chart below, the stock is overpriced as it is trading above its fair value.
GuruFocus ranked Roche’s financial strength 6 of 10 and its profitability and growth 8 of 10. The company’s trailing dividend yield is 3.41% and its forward dividend yield is 3.31%. The payout ratio is 73%.
Of the gurus invested in Roche, Ken Fisher (Trades, Portfolio) has the largest position with 0.12% of outstanding shares. Mairs and Power (Trades, Portfolio) is also a shareholder.
Hi-Crush
The investor bought 199,416 shares of Hi-Crush Partners for an average price of $10.02 per share. The trade had an impact of 1.22% on the portfolio.
The Houston-based company, which provides monocrystalline sand to the oil and gas industry, has a market cap of $1.12 billion; its shares were trading around $12.27 on Monday with a price-earnings ratio of 27.90, a price-book ratio of 1.40 and a price-sales ratio of 2.23.
Based on the Peter Lynch chart below, the stock appears to be slightly overpriced as it is trading above its fair value.
GuruFocus ranked Hi-Crush’s financial strength 6 of 10 and its profitability and growth 7 of 10. The company’s trailing dividend yield is 2.73% and its forward dividend yield is 6.20%. The payout ratio is 0%.
Black holds 0.64% of the company’s outstanding shares.
Perry Ellis
The guru invested in 68,691 shares of Perry Ellis International for an average price of $23.84 per share, giving it 0.98% portfolio space.
The Miami-based clothing company has a market cap of $372.12 million; its shares were trading around $23.75 on Monday with a price-earnings ratio of 14, a price-book ratio of 1.16 and a price-sales ratio of 0.45.
The Peter Lynch chart below shows the stock is trading close to its fair value.
GuruFocus ranked Perry Ellis’ financial strength 6 of 10 and its profitability and growth 5 of 10. The company does not currently pay a dividend.
With 2.11% of outstanding shares, Jim Simons (Trades, Portfolio) is the company’s largest guru shareholder. Barrow, Hanley, Mewhinney & Strauss also owns the stock.
Tech Data
Black purchased 11,827 shares of Tech Data for an average price of $93.73 per share, expanding the portfolio 0.66%.
The Clearwater, Florida-based distributor of technology products has a market cap of $3.77 billion; its shares were trading around $98.53 on Monday with a price-earnings ratio of 18.82, a price-book ratio of 1.37 and a price-sales ratio of 0.12.
According to the Peter Lynch chart below, the stock is overpriced as it is trading above its fair value.
Tech Data’s financial strength and profitability and growth were both rated 6 of 10 by GuruFocus. The company does not pay a dividend.
Of the gurus invested in Tech Data, David Einhorn (Trades, Portfolio) has the largest position with 0.24% of outstanding shares. Jeremy Grantham (Trades, Portfolio), Simons, Barrow, Hanley, Mewhinney & Strauss and David Dreman (Trades, Portfolio) are also shareholders.
Other buys
During the quarter, Black also established positions in Celanese Corp. (CE, Financial), Spectrum Brands Holdings Inc. (SPB, Financial), Statoil ASA (STO, Financial), DXC Technology Co. (DXC, Financial), Gulfport Energy Corp. (GPOR, Financial) and Rio Tinto PLC (RIO, Financial).
Disclosure: No positions.
