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James Li
James Li
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3 High-Quality, Low Price-Earnings Companies Broadly Owned by Gurus

Gurus seek investments in companies with consistent revenue and earnings growth

According to aggregated portfolio data coupled with some All-in-One Screener filters, three high-quality, low price-earnings stocks with broad guru ownership are Baidu Inc. (NASDAQ:BIDU), Biogen Inc. (NASDAQ:BIIB) and Comcast Corp. (NASDAQ:CMCSA).

Screening from a portfolio of stocks

The three stocks above are selected from the top 40 stocks from the Aggregated Portfolio of Gurus. You can create a portfolio using the “Add to Portfolio” feature located at the bottom of the “Aggregated Portfolio,” as Figure 1 illustrates. Figure 2 shows the pop-up window that creates the portfolio “Broadest Owned Guru Stocks.”

Figure 1

Figure 2

GuruFocus launched a new version of the All-in-one Screener during the past week. Figure 3 illustrates a sample screenshot of “Screener 2.0” with the fundamental filters selected.

Figure 3

You can set the universe of the Screener using the “Load from Portfolio” filter. Figure 4 illustrates this by selecting the “Broadest Owned Stocks” portfolio.

Figure 4

According to Berkshire Hathaway Inc. (NYSE:BRK.A)(NYSE:BRK.B) co-managers Warren Buffett (Trades, Portfolio) and Charlie Munger (Trades, Portfolio)’s four-criterion investing approach, one key factor in determining company quality is consistency of revenue and earnings growth. The GuruFocus business predictability rank grades a company’s revenue and earnings growth consistency on a scale of 1 to 5. High-quality companies typically have a predictability rank of at least three or four stars.

Among the broadest-owned stocks, the three companies with a predictability rank of at least three and a price-earnings below 16 as of Wednesday are Baidu, Biogen and Comcast.

Baidu

Twenty-seven gurus own shares of Baidu, a Chinese online media company, as of fourth-quarter 2018. The company is trading slightly below its Peter Lynch earnings line.

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GuruFocus ranks the company’s profitability 8 out of 10 on several positive investing signs, which include net profit margins that outperform 88% of global competitors and a three-year revenue growth rate that outperforms 75% of global competitors.

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Gurus riding Baidu’s strong growth potential include Sarah Ketterer (Trades, Portfolio), Dodge & Cox and Steven Romick (Trades, Portfolio).

Biogen

Twenty-four gurus own shares of Biogen as of the latest quarter.

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The Cambridge, Massachusetts-based company develops and manufactures therapies to patients for the treatment of neurological, rare and autoimmune diseases. GuruFocus ranks the company’s profitability 9 out of 10 on several positive investing signs, which include expanding profit margins, a strong Piotroski F-score of 7 and returns on equity that are outperforming 94% of global competitors. Additionally, the company’s business predictability ranks five stars on strong and consistent revenue and earnings growth over the past 10 years.

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Gurus with large holdings in Biogen include PRIMECAP Management (Trades, Portfolio) and the Vanguard Health Care Fund (Trades, Portfolio).

Comcast

Thirty-six gurus own shares of Comcast as of the latest quarter.

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Philadelphia-based Comcast provides a wide range of services through networks like NBC, CNBC and MSNBC. GuruFocus ranks the company’s profitability 8 out of 10 on several positive investing signs, which include profit margins that outperform over 85% of global competitors and a three-year revenue growth rate that outperforms 78% of global competitors.

Disclosure: As of the writing of this article, the author is long Biogen.

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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


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