Another of the world’s top value investors has opened a stake in struggling conglomerate, General Electric Corp. (GE, Financial).
Guru investor Richard Pzena (Trades, Portfolio) bought almost 4 million shares of the Boston-based multinational company in the first quarter, GuruFocus records show. Pzena, of the New York-based value investing firm of the same name, bought shares for an average price of roughly $15 a share.
Pzena is among a steadfast group of value investors who have demonstreated confidence the troubled conglomerate will eventually turn things around. GE shareholders include a long list of gurus, including Ken Fisher (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Ray Dalio (Trades, Portfolio) and George Soros (Trades, Portfolio).
It was a busy quarter for Pzena, who initiated, in total, 11 positions during the quarter. Top positions included a stake in tools maker Snap-on Inc. (SNA, Financial) and the Carlisle Companies Inc. (CSL, Financial), a manufacturer of construction materials, such as rubber.
As part of first-quarter buys, Pzena’s $20 billion portfolio also included shares of companies like Evertec Inc. (EVTC, Financial), Realogy Holdings Corp. (RLGY, Financial), ICICI Bank (IBN, Financial), AutZone Inc. (AZO, Financial), Carter’s Inc. (CRI, Financial), Molina Healthcare Inc. (MOH, Financial), NewMarket Corp. (NEU, Financial) and WRO Berkley Corp. (WRB, Financial)
The guru also expanded his positions in stocks of companies like Edison International (EIX), Amgen (AMGN) and Ford (F).
As it stands, Pzena’s portfolio contains 157 stocks.
General Electric
A total of 3,923,237 shares sit in about 0.27% of his portfolio. The guru has lost an estimated 9% on the deal since he bought shares.
GE has been battered by accounting discrepancies and regulatory scrutiny, among other problems. Many gurus say they have faith in the company's new leadership, which has taken control over the last six months or so.
While GE is expected to draw $123 billion in revenues in 2018, analysts are predicting a drop to $108 billion in 2020. It now has a forward price-earnings ratio, higher than the majority of its peers, of 14.53. Its price-book ratio of 2.18 and price-sales ratio of 1.01 also are ranked higher than peers. The company reports $123 billion in revenues and earnings per share of -0.93, with a 52-week high-low stock price range of $12.73 to $29.47 a share. The stock was trading at just over $14 a share on Monday afternoon, down 0.07%. Over the last year, the company’s stock price has fallen 45%.
In five years, the company’s net income has dropped more than 140%. GuruFocus ranks the company 4 out of 10 in financial strength and 6 of 10 in profitability and growth. It reported $109 billion in long-term debt at the end of the year.
Snap-on Inc.
Snap-on shares sit in about 0.23% of his portfolio. Pzena bought more than 307,000 shares of the company for an average price of $145.80 a share. The guru has lost an estimated 11% on the deal since he bought shares.
The maker of high-end automotive and industrial tools has been around since 1920. Based in Wisconsin, the company also drew new buys from two guru shareholders in the last two consecutive quarters. NWQ Managers (Trades, Portfolio) and David Dreman (Trades, Portfolio) opened positions in the final months of the year. John Rogers (Trades, Portfolio) expanded his position.
Snap-on reported revenue of more than $3.8 billion. Analysts are predicting revenues to continue to increase to as high as $4 billion in 2020.
It now has a forward price-earnings ratio, higher than the majority of its peers, of 12.50. Its price-earnings is 14.64, also higher than its peers. Its price-book ratio of 2.67 and price-sales ratio of 2.23 are ranked lower than more than the majority of its peers. Its 52-week stock range is $140.83 to $185.47 a share. As of Monday afternoon, it was trading at almost $146 a share, up 0.1%. Over the last year, the company’s stock price has fallen 14%
In five years, the company’s net income has increased to $558 million from $350 million in 2013. It had more than $527 million in free cash flow in the fourth quarter. GuruFocus ranks the company 6 out of 10 in financial strength and 7 of 10 in profitability and growth. It reported $754 million in long-term debt at the end of the year. The company had $900 million in debt about five years ago.
Carlisle Companies
Shares of the manufacturer of construction materials, including insulation, rubber and thermoplastic items, sit in about 0.39% of the portfolio space. He bought about 729,000 shares of the company for an average price of $109.77 a share. So far, the investment has produced an estimated loss of 2%.
The company has been around since 1917. Based in Arizona, the company also drew new buys from guru shareholders in the last two consecutive quarters. Steven Cohen (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Tom Russo (Trades, Portfolio) and Prem Watsa (Trades, Portfolio) all opened positions in the fourth quarter. Paul Tudor Jones (Trades, Portfolio), Pioneer Investments (Trades, Portfolio) and Chuck Royce (Trades, Portfolio) expanded their positions.
Carlisle reported revenue of more than $4.2 billion. Analysts are predicting revenues to continue to increase to as high as $4.6 billion in 2020. It has a forward price-earnings ratio, lower than the majority of its peers, of 18.66. It price-earnings is 11.13, also lower than its peers. Its price-book ratio of 2.43 and price-sales ratio of 1.60 also are ranked lower than the majority of its peers.
Its 52-week stock range is $90 to $119 a share. As of Monday afternoon, it was trading at $108 a share, up 0.69%. Over the last year, the company’s stock price has jumped 4%.
In five years, the company’s net income has increased to $613 million in the last trailing 12 months. Three years ago, it stood at $320 million. Revenues have been climbing to over $4 billion. GuruFocus ranks the company 6 out of 10 in financial strength and 7 of 10 in profitability and growth.
It reported $1.6 billion in long-term debt at the end of the year. It had $299 million in free cash flow at the end of the year.
