Fisher Investments leader Ken Fisher (Trades, Portfolio) released his portfolio for the final quarter of 2018 last week, listing 78 new holdings.
Using a framework called the “Four Market Conditions,” the guru’s Camas, Washington-based firm says on its website it invests in the countries and sectors most likely to generate the highest expected returns based on strategies most suited for the current environment.
For the quarter, the firm’s five largest new positions were Weibo Corp. (WB, Financial), EssilorLuxottica (ESLOY, Financial), NXP Semiconductors NV (NXPI, Financial), Alarm.com Holdings Inc. (ALRM, Financial) and HubSpot Inc. (HUBS, Financial).
Fisher’s firm invested in 2.76 million shares of Weibo for an average price of $60.34 per share, allocating 0.22% of the equity portfolio to the stake.
The Chinese social media platform has a $12.88 billion market cap; its shares were trading around $57.85 on Monday with a price-earnings ratio of 24.41, a price-book ratio of 8.54 and a price-sales ratio of 8.27.
The Peter Lynch chart shows the stock is trading above its fair value, suggesting it is overpriced.
Weibo’s financial strength and profitability and growth were both rated 6 out of 10 by GuruFocus. Although the company’s cash-debt ratio underperforms 63% of industry peers, the Altman Z-Score of 7.19 indicates the company is fiscally stable. The company is also supported by an expanding operating margin, good returns and a moderate Piotroski F-Score of 5, which implies business conditions are stable.
With its purchase of 1.24% of outstanding shares, Fisher’s firm is now Weibo’s largest guru shareholder. Howard Marks (Trades, Portfolio)’ Oaktree Capital, Jim Simons (Trades, Portfolio)’ Renaissance Technologies and Value Partners (Trades, Portfolio) also own the stock.
EssilorLuxottica
The firm picked up 696,641 shares of Essilorluxottica for an average price of $65.71 per share, dedicating 0.06% of the equity portfolio to the position.
The French manufacturer of eyeglasses has a market cap of $53.84 billion; its shares were trading around $62.95 on Monday with a price-earnings ratio of 32.57, a price-book ratio of 3.62 and a price-sales ratio of 3.25.
According to the Peter Lynch chart, the stock is overvalued.
GuruFocus rated EssilorLuxottica’s financial strength 7 out of 10. In addition to having adequate interest coverage, the Altman Z-Score of 7.02 suggests the company is in good standing financially. The company’s profitability and growth scored an 8 out of 10 rating. Although the operating margin is in decline, it still outperforms 81% of competitors. The eyewear company is also strengthened by good returns, a moderate Piotroski F-Score of 4 and a perfect business predictability rank of five out of five stars, which is on watch as a result of a slowdown in revenue per share growth over the last 12 months. GuruFocus says companies with this rank typically see their stocks gain an average of 12.1% per year.
Fisher holds 0.08% of the company’s outstanding American depositary receipts.
NXP Semiconductors
Having previously sold out of NXP Semiconductors in the fourth quarter of 2016, the guru’s firm purchased a new 461,712-share holding for an average price of $79.02 per share, giving it 0.05% space in the equity portfolio.
Headquartered in The Netherlands, the semiconductor manufacturer has a $24.94 billion market cap; its shares were trading around $84.60 on Monday with a price-earnings ratio of 10.42, a price-book ratio of 2.34 and a price-sales ratio of 3.04.
Based on the Peter Lynch chart, the stock appears to be undervalued.
The Dutch company’s financial strength was rated 5 out of 10 by GuruFocus. In addition to having insufficient interest coverage, the Altman Z-Score of 2.31 indicates the company is under some fiscal pressure. NXP Semiconductors’ profitability and growth scored an 8 out of 10 rating, driven by margins and returns that outperform industry peers and a high Piotroski F-Score of 8, which suggests healthy operations.
Of the gurus invested in NXP, Paul Singer (Trades, Portfolio) has the largest stake with 3.55% of outstanding shares. John Paulson (Trades, Portfolio), Larry Robbins (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), the T Rowe Price Equity Income Fund (Trades, Portfolio), Leucadia National (Trades, Portfolio), Marks’ firm, Julian Robertson (Trades, Portfolio), Steven Cohen (Trades, Portfolio), Mario Gabelli (Trades, Portfolio), Tom Gayner (Trades, Portfolio) and several other gurus are also shareholders.
Alarm.com Holdings
The investment firm bought 231,544 shares of Alarm.com for an average price of $48.16 per share, expanding the equity portfolio 0.02%.
The Vienna, Virginia-based software company provides cloud-based services that allow home and business owners to secure their properties as well as automate and control an array of connected devices. The company has a market cap of $3 billion; its shares were trading around $62.55 on Monday with a price-earnings ratio of 231.66, a price-book ratio of 11.35 and a price-sales ratio of 7.68.
The Peter Lynch chart suggests the stock is overvalued.
Despite having poor earnings quality, GuruFocus rated Alarm.com’s financial strength 7 out of 10. Boosted by sufficient interest coverage, the robust Altman Z-Score of 12.33 indicates the company is in good fiscal standing. The company’s profitability and growth fared a bit better, scoring an 8 out of 10 rating. Although the operating margin is in decline, the company is supported by returns that outperform competitors and a moderate Piotroski F-Score of 6.
With 1.25% of outstanding shares, Chuck Akre (Trades, Portfolio) is the company’s largest guru shareholder. Chuck Royce (Trades, Portfolio) also has a position in the stock.
HubSpot
Fisher’s firm invested in 53,019 shares of HubSpot for an average price of $130.31 per share. The trade had an impact of 0.01% on the equity portfolio.
The Massachusetts-based software company, which concentrates on products for marketing and sales, has a $5.9 billion market cap; its shares were trading around $150.26 on Monday with a forward price-earnings ratio of 144.93, a price-book ratio of 25.48 and a price-sales ratio of 12.04.
According to the median price-sales chart, the stock is trading above its historical average, suggesting it is overvalued.
Supported by a high Altman Z-Score of 6.94, HubSpot’s financial strength was rated 5 out of 10 by GuruFocus. The company’s profitability and growth scored a 6 out of 10 rating. Although the operating margin is expanding, the company is weighed down by negative margins and returns that underperform industry peers and a Sloan ratio that indicates poor earnings quality. The company also has a moderate Piotoroski F-Score of 5.
PRIMECAP Management (Trades, Portfolio) is the company’s largest guru shareholder with 1.28% of outstanding shares. Other gurus invested in the stock are Simons, Jones and Pioneer.
Additional trades
During the quarter, Fisher also established positions in iRobot Corp. (IRBT, Financial), the iShares MSCI Global Energy Producers Fund (FILL, Financial), the iShares MSCI France Index Fund (EWQ, Financial), MSCI Inc. (MSCI, Financial), ON Semiconductor Corp. (ON, Financial) and many other companies.
Fisher’s $73.03 billion portfolio, which is composed of 821 stocks, is largely invested in the technology sector, followed by financial services.
Disclosure: No positions.
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