Spiros Segalas (Trades, Portfolio), manager of the Harbor Capital Appreciation Fund, disclosed this week three new positions for the third quarter: Intuitive Surgical Inc. (ISRG, Financial), Chipotle Mexican Grill Inc. (CMG, Financial) and Tiffany & Co. (TIF, Financial).
Managing a portfolio of 53 stocks, Segalas invests primarily in U.S. stocks with superior earnings growth, sales growth, high profitability and strong balance sheets. The fund also seeks companies that have strong market positions, unique marketing competence and disciplined management.
Intuitive Surgical
Segalas invested in 334,203 shares of Intuitive Surgical for an average price of $486.38 per share, dedicating 0.54% equity portfolio space to the position.
The Sunnyvale, California-based company designs, manufactures and markets medical equipment used for assisting minimally invasive surgery. GuruFocus ranks the company’s financial strength and profitability 9 out of 10 on several positive investing signs, which include no long-term debt and consistent revenue growth. Intuitive Surgical’s business predictability ranks two stars out of five, suggesting moderately consistent earnings growth over the past 10 years.
Intuitive Surgical’s Piotroski F-score ranks a strong 8 out of 9 on increasing returns on assets, current ratio, gross margin and asset turnover year over year. Operating profit margins of 33.56% are outperforming over 93% of global competitors, suggesting strong profitability compared to peers.
Gurus with large holdings in Intuitive Surgical include Steven Cohen (Trades, Portfolio), Pioneer Investments (Trades, Portfolio) and the Vanguard Health Care Fund (Trades, Portfolio).
Chipotle Mexican Grill
Segalas invested in 411,476 shares of Chipotle, a major holding of Bill Ackman (Trades, Portfolio). Shares of Chipotle averaged $446.36 during the quarter.
Ackman said to Reuters on Aug. 31 that while Pershing Square sold 823,357 Chipotle shares to manage its position size, the investor still “loves” Chipotle, a company that “is in the very early stages of beginning to realize its potential.” The investor wrote in his second-quarter shareholder letter that new CEO Brian Niccol staged a “special” investor call outlining company management’s strategic plan to “drive both a successful turnaround and long-term growth.”
GuruFocus ranks Chipotle’s financial strength 9 out of 10 on several strong indicators, including no long-term debt and a robust Altman Z-score of 14.56. The company’s profitability ranks 8 out of 10 primarily due to a strong Piotroski F-score of 8 and return on assets outperforming 77% of global competitors.
Other gurus with large holdings in Chipotle include Markel Corp. (MKL, Financial) co-CEO Tom Gayner (Trades, Portfolio).
Tiffany
Segalas invested in 471,044 shares of Tiffany, a luxury retailer specializing in jewelry produced from rough diamonds. Shares of Tiffany averaged $126.30 during the quarter.
GuruFocus ranks Tiffany’s profitability 8 out of 10 on several positive investing signs, which include consistent revenue growth and operating margins that outperform 95% of global competitors. Tiffany’s business predictability ranks three stars out of five, suggesting consistent revenue and earnings growth over the past 10 years.
Disclosure: No positions.
