1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
James Li
James Li
Articles (725)  | Author's Website |

Prem Watsa’s High-Conviction Trades as of 4th Quarter

Guru keeps buying shares of GE and two other stocks

Prem Watsa (Trades, Portfolio), CEO of Fairfax Financial Holdings Ltd. (TSX:FFH), has kept increasing his positions in General Electric Co. (NYSE:GE), Signature Bank (NASDAQ:SBNY) and Ampco-Pittsburgh Corp. (NYSE:AP) over the past three to four quarters according to current portfolio statistics.

Managing a portfolio of 33 stocks, Watsa seeks to invest in assets “on a total return basis” according to Fairfax Financial’s website. The manager’s conservative investment philosophy seeks to increase long-term shareholder value, including both realized and unrealized gains.

cb3b37c0-441e-11e9-9b6f-1d89f2cd1b8b.png

General Electric

Having added 272,800 shares of GE during the third quarter, Watsa added 318,200 shares during the fourth quarter, increasing the position 29.66%. Shares of GE averaged $12.86 during the third quarter, but just $9.28 during the fourth quarter.

1f57b730-441f-11e9-b680-df2b3914f04d.png

Although GE’s profitability ranks 6 out of 10, GuruFocus lists several warning signs, including declining gross profit and operating profit margins. Additionally, GE’s three-year revenue growth rate of 6.80% underperforms 69% of global competitors.

1469044435.png

Other gurus with large positions in GE include Richard Pzena (Trades, Portfolio)’s Pzena Investment Management Inc. (NYSE:PZN), Mason Hawkins (Trades, Portfolio)’ Southeastern Asset Management and Chris Davis (Trades, Portfolio)’ Davis Selected Advisors.

Signature Bank

Watsa added 4,800 shares of Signature Bank, increasing the holding 20%. Shares averaged $112.47 during the quarter.

019ec700-4434-11e9-b268-2544c943e9bf.png

The New York-based bank offers a wide variety of business and personal banking services. GuruFocus ranks the regional bank’s financial strength 3 out of 10 on several weak signs, which include increasing long-term debt over the past three years and an equity-to-asset ratio that underperforms 62% of global competitors.

FPA Crescent Fund manager Steven Romick (Trades, Portfolio) established a 735,280-share position in Signature Bank during the fourth quarter.

Ampco-Pittsburgh

Watsa added 60,000 shares of Ampco-Pittsburgh, increasing the holding 30%. Shares averaged $4.17 during the quarter.

688fb530-4438-11e9-8d7b-0dfd1ca98145.png

The Pittsburgh-based diversified industrials company produces forged, hardened steel rolls used to produce steel, aluminum and other metals. GuruFocus ranks the company’s profitability 5 out of 10: although the three-year revenue growth rate of 10.20% outperforms 76% of global competitors, Ampco-Pittsburgh’s operating and net profit margins are negative and underperform over 85% of global diversified industrial companies.

338351576.png

Disclosure: No positions.

Read more here:

About the author:

James Li
I am an editorial assistant and researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

Visit James Li's Website


Rating: 0.0/5 (0 votes)

Comments

Please leave your comment:


Performances of the stocks mentioned by James Li


User Generated Screeners


pjmason14Momentum
pascal.van.garsseHigh FCF-M2
kosalmmuse6
kosalmmuseBest one1
DBrizanall 2019Feb26
kosalmmuseBest one
DBrizanall 2019Feb25
kosalmmuseNice
kosalmmusehan
MsDale*52-Week Low
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat

{{numOfNotice}}
FEEDBACK