Prem Watsa (Trades, Portfolio), often referred to as “Canada’s Warren Buffett (Trades, Portfolio),” disclosed on Tuesday he established five positions in the first quarter: General Electric Co. (GE, Financial), Independence Contract Drilling Inc. (ICD, Financial), WGL Holdings Inc. (WGL, Financial), Scana Corp. (SCG, Financial) and iRobot Corp. (IRBT, Financial).
General Electric
Watsa invested in 309,400 shares of GE for an average price of $15.54 per share. The guru dedicated 0.31% of his portfolio to this transaction.
GE said on April 20 that adjusted earnings increased 14% year over year, driven by strong growth across several business segments. The company’s profitability ranks 6 out of 10: even though the company’s returns on equity and assets underperform over 80% of global competitors, Boston-based GE still has a three-year compound annual growth rate of sales that outperforms 71% of global diversified industrial companies.
Hotchkis & Wiley and Richard Pzena (Trades, Portfolio) also established a stake in GE during the quarter. As of March 31, Barrow, Hanley, Mewhinney & Strauss has the largest GE stake with 74,590,954 shares.
Independence Contract Drilling
Watsa invested in 360,000 shares of Independence Contract Drilling for an average price of $4.39 per share. The guru increased his portfolio 0.10% with this transaction.
Independence Contract Drilling provides land-based contract drilling services for oil and natural gas producers. The company’s profitability ranks a low 4 out of 10 as operating margins and returns underperform over 70% of global competitors.
WGL Holdings
Watsa invested in 14,000 shares of WGL Holdings for an average price of $84.03 per share. The guru increased his portfolio 0.09% with this transaction.
WGL Holdings’ primary operating segment, Washington Gas Light, provides energy-related products and services to approximately 1.1 million customers in Maryland, Virginia and Washington D.C. The company’s profitability ranks a modest 5 out of 10: although its operating margin is near a 10-year high of 14.48%, WGL Holdings’ revenue has declined approximately 5.20% per year over the past three years, a rate that underperforms 73% of global competitors.
Scana Corp.
Watsa invested in 30,000 shares of Scana for an average price of $40.07 per share. With this transaction, the guru increased his portfolio 0.08%.
Scana engages primarily in generating, transmitting and distributing electricity in South Carolina. Although the company has expanding operating margins and a high dividend yield, its three-year revenue growth rate of -4.10% underperforms 69% of global competitors. Additionally, returns on equity are near a 10-year low of -2.17% and underperforming 87% of global regulated electric companies.
iRobot
Watsa invested in 15,000 shares of iRobot for an average price of $75.26 per share. The guru increased his portfolio 0.07% with this transaction.
iRobot designs and sells small, artificially intelligent consumer robots, including the automatic Roomba vacuum and the floor-mopping Braava. The company has six positive investing signs, including zero long-term debt, consistent revenue growth and expanding operating margins. GuruFocus ranks iRobot’s financial strength 9 out of 10, profitability 8 out of 10 and business predictability three stars out of five.
Guru continues trimming Intrepid Potash
According to GuruFocus real-time picks, Watsa sold 4,155,064 shares of Intrepid Potash Inc. (IPI) on May 8 for $4.05 per share. The guru previously sold 2,093,005 shares for $4.45 per share on May 3.
Disclosure: No positions.
