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Tiziano Frateschi
Tiziano Frateschi
Articles (1967)  | Author's Website |

Prem Watsa Trims IBM, Berkshire Hathaway

The guru’s largest sales of the 4th quarter

Prem Watsa (Trades, Portfolio), founder, chairman and CEO of Fairfax Financial Holdings,  sold shares of the following stocks during the fourth quarter.

The guru closed his position inAlere Inc. (NYSE:ALR). The transaction had an impact of -1.52% on the portfolio.

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The company, which manufactures rapid point-of-care diagnostic tests, was acquired by Abbottt Laboratories (ABT) in October. 

Before the deal closed, GuruFocus gave the company a profitability and growth rating of 4 out of 10. While its return on equity (ROE) of -14.34% underperformed the sector, its return on assets (ROA) of -4.38% outperformed 50% of companies in the Global Diagnostics and Research industry. Its financial strength was rated 4 out of 10. The cash-debt ratio of 0.17 was below the industry median of 3.28.

The firm's EXCO Resources Inc. (XCOOQ) holding was closed. The trade had an impact of -0.38% on the portfolio.

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The oil and natural gas producer has a market cap of $8.05 billion and an enterprise value of $1.28 billion.

GuruFocus gives the company a profitability and growth rating of 3 out of 10. Its ROA of 10.64% and return on capital (ROC) of 26.07% are outperforming 90% of companies in the Global Oil and Gas E&P industry. Its financial strength is rated 2 out of 10. The cash-debt ratio of 0.06 is below the industry median of 0.49.

The company's largest shareholder among the gurus is Wilbur Ross (Trades, Portfolio) with 13.85% of outstanding shares, followed by the Chou RRSP Fund (Trades, Portfolio) with 0.23%.

Watsa reduced his International Business Machines Corp. (NYSE:IBM) holding by 5.51%. The transaction had an impact of -0.18% on the portfolio.

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The technology company, which offers a variety of IT services along with software and hardware, has a market cap of $142.53 billion and an enterprise value of $176.91 billion.

GuruFocus gives the company a profitability and growth rating of 5 out of 10. Its ROE of 31.19% and ROA of 4.77% are outperforming 59% of companies in the Global Information Technology Services industry. Its financial strength is rated 5 out of 10. The cash-debt ratio of 0.27 is below the industry median of 5.32.

Jim Simons (Trades, Portfolio) is the company's largest guru shareholder with 0.34% of outstanding shares, followed by Warren Buffett (Trades, Portfolio) with 0.22% and Pioneer Investments (Trades, Portfolio) with 0.17%.

The investor's TerraForm Global Inc. (NASDAQ:GLBL) position was closed, impacting the portfolio by -0.12%.

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The renewable energy company merged with Brookfield Asset Management  Inc. (BAM) in December.

Before the deal closed, GuruFocus gave the company a profitability and growth rating of 6 out of 10. Its ROE of -14.92% and ROA of -2.93% underperformed 88% of companies in the Global Utilities - Independent Power Producers industry. Its financial strength was rated 4 out of 10. Its cash-debt ratio of 0.58 was above the industry median of 0.16.

The Kite Pharma Inc. (NASDAQ:KITE) position was also closed, impacting the portfolio by -0.09%.

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The clinical-stage biopharmaceutical company merged with Gilead Sciences Inc. (GILD) last October. 

Before the deal closed, GuruFocus gave the company a profitability and growth rating of 3 out of 10. Its ROE of -60.72% and ROA of -50.22% underperformed 61% of companies in the Global Biotechnology industry. Its financial strength was rated 8 out of 10 with no debt.

Watsa trimmed hisBerkshire Hathaway Inc. (NYSE:BRK.B) holding by 42.86%, impacting the portfolio by -0.09%.

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The insurance conglomerate has a market cap of $495.95 billion and an enterprise value of $491.72 billion.

GuruFocus gives the company a profitability and growth rating of 6 out of 10. While the ROE of 6.42% is underperforming the sector, the ROA of 2.89% is outperforming 55% of companies in the Global Insurance - Diversified industry. It financial strength is rated 5 out of 10. The cash-debt ratio is 0.42.

The company's largest guru shareholder is Bill Gates (Trades, Portfolio) with 2.58% of outstanding shares, followed by Ken Fisher (Trades, Portfolio) with 0.12%, Tom Russo (Trades, Portfolio) with 0.1% and Ruane Cunniff (Trades, Portfolio) with 0.08%.

The guru exited his New Oriental Education & Technology Group Inc. (NYSE:EDU) position. The transaction had an impact of -0.04% on the portfolio.

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The company, which provides private educational services in China, has a market cap of $14.63 billion and enterprise value of $12.33 billion.

GuruFocus gives the company a profitability and growth rating of 7 out of 10. The ROE of 16.99% and ROA of 9.67% are outperforming 76% of companies in the Global Education and Training Services industry. Its financial strength is rated 9 out of 10 with no debt.

With 1.82% of outstanding shares, Chase Coleman (Trades, Portfolio) is the company's largest guru shareholder, followed by Chris Davis (Trades, Portfolio) with 0.68%, Sarah Ketterer (Trades, Portfolio) with 0.54% and Columbia Wanger (Trades, Portfolio) with 0.53%.

The Rayonier Advanced Materials Inc. (NYSE:RYAM) position was closed, impacting the portfolio by -0.04%.

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The chemical company, which specializes in cellulose-based products, has a market cap of $2.2 billion and an enterprise value of $1.06 billion.

GuruFocus gives the company a profitability and growth rating of 6 out of 10. While the ROE of 98.54% is outperforming the sector, the ROA of 19.37% is underperforming 66% of companies in the Global Chemicals industry. Its financial strength is rated 4 out of 10. The cash-debt ratio of 0.08 is below the industry median of 0.75.

The company's largest shareholder among the gurus is Simons with 7.69% of outstanding shares, followed by Howard Marks (Trades, Portfolio) with 3.01%, Hotchkis & Wiley with 0.18% and Chuck Royce (Trades, Portfolio) with 0.1%.

Watsa's Wells Fargo & Co. (WFC) position was reduced by 17.92%. The transaction had an impact of -0.04% on the portfolio.

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The bank has a market cap of $292.18 billion and an enterprise value of $632.15 billion.

GuruFocus gives the company a profitability and growth rating of 5 out of 10. The ROE of 10% and ROA of 1.13% are outperforming 63% of companies in the Global Banks - Global industry. Its financial strength is rated 4 out of 10. The cash-debt ratio of 0.07 is below the industry median of 2.10.

Buffett is the company's largest guru shareholder with 9.37% of outstanding shares, followed by Dodge & Cox with 1.45%, Barrow, Hanley, Mewhinney & Strauss with 0.65% and Davis with 0.54%.

Disclosure: I do not own any stocks mentioned in this article.

About the author:

Tiziano Frateschi
You can read about me on www.theextraincome.info, which gives suggestions on position trading.

Visit Tiziano Frateschi's Website


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