Jeff Auxier (Trades, Portfolio), manager of the Auxier Focus Fund, disclosed last week his top four buys for the second quarter were Booking Holdings Inc. (BKNG, Financial), Corteva Inc. (CTVA, Financial), Alphabet Inc. (GOOGL, Financial) and Boeing Co. (BA, Financial).
Managing an equity portfolio of 163 stocks, Auxier seeks compelling, undervalued companies that have the following attributes: strong or improving fundamentals, consistency in operating results, strong franchise and a demonstrated ability to earn a high return on capital.
As of quarter-end, the $501 million equity portfolio’s top three sectors in terms of weight are health care, financial services and consumer staples. The three sectors occupy 25.45%, 20.24% and 17.99% of the guru's equity portfolio.
Booking
Auxier purchased 2,364 shares of Booking, giving the position 0.88% equity portfolio weight. Shares averaged $1,795.29 during the quarter.
GuruFocus ranks the online travel and reservation giant’s profitability 7 out of 10 on several positive indicators, which include a 3.5-star business predictability rank and an operating margin that is near a 10-year high of 36.77% and outperforms 92.47% of global competitors.
Other gurus riding Booking’s strong profitability include Wallace Weitz (Trades, Portfolio), Diamond Hill Capital (Trades, Portfolio) and Bestinfond (Trades, Portfolio).
Corteva
Auxier purchased 58,091 shares of Corteva, giving the holding 0.34% equity portfolio weight. Shares averaged $27.28 during the period between June 3, the day Corteva spun off from DowDuPont as a public, standalone company, and June 30.
The Wilmington, Delaware-based agriculture company provides farmers various seeds, crop protection and digital solutions focused on enhancing yield and profitability. According to GuruFocus data, Corteva’s cash-debt ratio of 1.03 outperforms 64% of global competitors, suggesting good financial strength. Additionally, Corteva’s interest coverage exceeds Graham’s safe threshold of five.
Alphabet
Auxier added 1,140 Class A shares of Google parent Alphabet, increasing the holding 43.33% and his equity portfolio 0.24%. Shares averaged $1,158.78 during the quarter.
On Monday, the Mountain View, California-based company celebrated the 15th anniversary of its initial public offering. The company also operates platforms like YouTube, Google Play and Android.
GuruFocus ranks Google’s financial strength and profitability at least 8 out of 10 on several positive indicators, including a strong Piotroski F-score of 7, a robust Altman Z-score of 9.96 and debt ratios that are outperforming over 97% of global online media competitors. The company also has a solid business predictability rank of 3.5 stars and operating margins that are outperforming 76.47% of global competitors despite declining approximately 2.3% per year on average over the past five years.
Soros Fund Management leader George Soros (Trades, Portfolio) established a holding of 65,750 shares in Alphabet during the second quarter, dedicating 1.84% of his equity portfolio to the position.
Boeing
Auxier added 1,980 shares of Boeing, increasing the position 15.12% and his equity portfolio 0.14%. Shares averaged $364.73 during the quarter.
GuruFocus ranks the Chicago-based airplane manufacturer’s profitability 7 out of 10: Even though the company’s operating margin of 5.39% underperforms 77.99% of global competitors, Boeing’s Joel Greenblatt (Trades, Portfolio) return on capital of 44.64% outperforms 78.53% of global aerospace and defense companies. Additionally, Boeing’s trailing 12-month return on invested capital of 126.68% exceeds its weighted average cost of capital, suggesting capital creation.
Viking Global Partners leader Andreas Halvorsen (Trades, Portfolio) started a position in Boeing during the second quarter.
Disclosure: No positions.
Read more here:
- Julian Robertson Buys 3 Stocks in 2nd Quarter
- Andreas Halvorsen’s Top 5 Buys of the 2nd Quarter
- Stanley Druckenmiller’s Top 5 Buys in the 2nd Quarter
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