Ken Heebner (Trades, Portfolio), co-founder of Capital Growth Management, disclosed on Friday that his top five buys for the second quarter were Zebra Technologies Corp. (ZBRA, Financial), Valero Energy Corp. (VLO, Financial), Rayonier Inc. (RYN, Financial), PBF Energy Inc. (PBF, Financial) and Wyndham Hotels & Resorts Inc. (WH, Financial).
Managing a portfolio of 57 stocks, Heebner has a history of making bold and swift sector calls. The guru’s top three sectors in terms of portfolio weight are basic materials, financial services and consumer discretionary.
Zebra Technologies
Heebner invested in 386,000 shares of Zebra Technologies for an average price of $147.17 per share. The guru dedicated 2.79% of his equity portfolio to the position.
Zebra Technologies designs and markets a broad range of products for the automated identification and data capture market. The company’s profitability ranks 8 out of 10 on several factors, including a strong Piotroski F-score of 7 and returns on equity that outperform 85% of global competitors.
The company’s three-year revenue growth rate of 28.7% still outperforms 94% of global competitors even though revenue growth has decelerated over the trailing 12 months. GuruFocus ranks Zebra Technologies’ business predictability 2.5 stars.
Valero
Heebner invested in 395,000 shares for an average price of $112.03 per share. With this transaction, the guru increased his equity portfolio 2.21%.
San Antonio, Texas-based Valero operates 14 petroleum refineries around the world, producing approximately 3.1 million barrels per day. GuruFocus ranks the company’s profitability 5 out of 10: although the company has a strong Piotroski F-score of 8, Valero’s three-year EBITDA growth rate of -4% underperforms 81% of global competitors.
Rayonier
Heebner invested in 1,060,000 shares of Rayonier for an average price of $37.69 per share. The guru increased his equity portfolio 2.07% with this transaction.
Rayonier engages in activities associated with timberland management as well as the production and sale of specialty cellulose fibers. The company’s profitability ranks 8 out of 10 on several factors, including profit margins and Joel Greenblatt (Trades, Portfolio) returns on capital that outperform over 94% of global competitors.
PBF Energy
Heebner invested in 970,000 shares of PBF Energy, a company Seth Klarman (Trades, Portfolio) exited during the quarter. The New Jersey-based company’s share price averaged $41.76 for the quarter.
GuruFocus ranks the oil refiner’s profitability 5 out of 10: although the company’s operating margin has expanded over the past five years, profit margins still underperform over 60% of global competitors.
Wyndham Hotels
Heebner disclosed a 685,000-share holding in Wyndham Hotels, a company that spun off from Wyndham Destinations (WYND, Financial) on June 1. During the quarter, Wyndham Hotels’ share price averaged $61.16.
New Jersey-based Wyndham Hotels said on Aug. 1 that revenues for the quarter ending June 30 were $435 million, up 31% from the prior-year quarter. Consolidated revenues included $77 million in incremental revenues from the acquisition of La Quinta.
Disclosure: No positions.
