(GuruFocus, November 6, 2009)Investment Guru Wallace Weitz has been a net seller in 3Q09. At the end of quarter, he held 19% in cash for his Value Fund.
That is despite the following conversation he had with Morningstar:
In the Quarterly Letter, Wallace remarked:
In the end, these are his heaviest buys during the quarter:
Laboratory Corporation of America Holdings is one of the largest independent clinical laboratory company's in the United States. Through a national network of laboratories the company offers different clinical laboratory tests which are used by the medical profession in routine testing patient diagnosis and in the monitoring and treatment of disease. Laboratory Corp. Of America Holdings has a market cap of $7.74 billion; its shares were traded at around $71.44 with a P/E ratio of 14.7 and P/S ratio of 1.7. Laboratory Corp. Of America Holdings had an annual average earning growth of 10.3% over the past 10 years.
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That is despite the following conversation he had with Morningstar:
What would you tell investors reluctant to buy stocks today due to anchoring on the prices of earlier this year? Are they correct in doing so, or are stocks still undervalued even after bouncing off their market lows?
It is really hard to ignore where stock prices have come from, but it's important to focus on today's price as compared to one's estimate of the value of the underlying business. We believe that most of the companies we follow will recover and will be worth more in the future, but we are very uncertain as to how long their recovery will take. We have reworked our models using conservative assumptions; we have given preference to companies that have staying power in case the economy gets worse before it gets better; and we hold some cash reserves. Having said that, though, we find lots of stocks we are comfortable owning (if not excited about) and think it would be dangerous to try to guess at better "entry" points.
In the Quarterly Letter, Wallace remarked:
We added one new stock during the quarter, The DIRECTV Group ("DTV"). The DirecTV satellite business is not new to the portfolio, as it is the flagship asset of long-time holding Liberty Media – Entertainment. We think DTV’s stock is cheap in its own right, and it is a natural fit for the Value Fund. Our directly held position in DTV stock should grow later this year after Liberty completes a series of steps to split off and merge various assets. We also added modestly to positions in a handful of other high quality businesses, including Wal-Mart, Potash Corp., Diageo and Apollo Group.
In the end, these are his heaviest buys during the quarter:
No. 1: DIRECTV Group Inc. (DTV, Financial), Buy: 0.37% of the portfolio - Total: 225,000 Shares
The DIRECTV Group Inc. is a world-leading provider of digital multichannel television entertainment broadband satellite networks and services and global video and data broadcasting. Directv Group Inc. The has a market cap of $27.89 billion; its shares were traded at around $28.54 with a P/E ratio of 23 and P/S ratio of 1.4. Directv Group Inc. The had an annual average earning growth of 12.7% over the past 10 years.No. 2: Laboratory Corp. of America Holdings (LH, Financial), Add: 0.28% of the portfolio - Total: 255,300 Shares
Laboratory Corporation of America Holdings is one of the largest independent clinical laboratory company's in the United States. Through a national network of laboratories the company offers different clinical laboratory tests which are used by the medical profession in routine testing patient diagnosis and in the monitoring and treatment of disease. Laboratory Corp. Of America Holdings has a market cap of $7.74 billion; its shares were traded at around $71.44 with a P/E ratio of 14.7 and P/S ratio of 1.7. Laboratory Corp. Of America Holdings had an annual average earning growth of 10.3% over the past 10 years.
No. 3: Grand Canyon Education Inc. (LOPE, Financial), Buy: 0.61% of the portfolio - Total: 571,668 Shares
Grand Canyon Education Inc. is a regionally accredited provider of online postsecondary education services focused on offering graduate and undergraduate degree programs in its core disciplines of education business and healthcare. In addition to its online programs it offers programs at its traditional campus in Phoenix Arizona and onsite at the facilities of employers. Grand Canyon Education Inc. has a market cap of $840.4 million; its shares were traded at around $18.44 with and P/S ratio of 5.1.No. 4: Omnicare Inc. (OCR, Financial), Add: 0.2% of the portfolio - Total: 2,282,430 Shares
Omnicare Inc. a Fortune five hundred company based in Covington Kentucky is a leading provider of pharmaceutical care for the elderly. Omnicare serves residents in long-term care facilities and other chronic care settings comprising beds in fourteen states the District of Columbia and Canada. Omnicare is the largest U.S. provider of professional pharmacy related consulting and data management services for skilled nursing assisted living and other institutional healthcare providers as well as for hospice patients in homecare and other settings. Omnicare's pharmacy services also include distribution and patient assistance services for specialty pharmaceuticals. Omnicare offers clinical research services for the pharmaceutical and biotechnology industries in thirty countries worldwide. Omnicare Inc. has a market cap of $2.61 billion; its shares were traded at around $21.83 with a P/E ratio of 8.5 and P/S ratio of 0.4. The dividend yield of Omnicare Inc. stocks is 0.4%. Omnicare Inc. had an annual average earning growth of 13.2% over the past 10 years. GuruFocus rated Omnicare Inc. the business predictability rank of 4-star.No. 5: WalMart Stores Inc. (WMT, Financial), Add: 0.16% of the portfolio - Total: 285,000 Shares
Wal-Mart Stores Inc. is the world's largest retailer. They are engaged in the operation of mass merchandising stores which serve their customers primarily through the operation of three segments which are the Wal-Mart Stores segment the SAM'S Club segment and the International segment. Walmart Stores Inc. has a market cap of $197.78 billion; its shares were traded at around $51.28 with a P/E ratio of 14.9 and P/S ratio of 0.5. The dividend yield of Walmart Stores Inc. stocks is 2.2%. Walmart Stores Inc. had an annual average earning growth of 13.3% over the past 10 years. GuruFocus rated Walmart Stores Inc. the business predictability rank of 5-star.GuruFocus provides real time information and insights of Investment Gurus such as Warren Buffett and Wallace Weitz for Premium Members. If you are not a premium member, click here to sign up or upgrade. 7-Day Free Trial is available.
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