Chuck Royce is the Co-Chief Investment Officer of Royce & Associates LLC, which manage The Royce Funds. The company was acquired in 1972 by Mr. Royce and became a wholly owned, independent subsidiary of Legg Mason, Inc. in October 2001. As of March 31, 2010 the investment advisor managed $28.31 billion and was invested in 1512 stocks.
Chuck Royce is one of the pioneers of small-cap investing, and uses value investing strategies to find small cap stocks. These companies are defined as being less market capitalizations under $2.5 billion with MicroCaps being $500 million and under. He's also stepped up his investments into Mid-Cap stocks with less than $10 billion.
He seeks absolute returns and focuses on these smaller companies that meet his value investing philosophy. Using this philosophy, he views sustainable returns as one of the most important factor when looking at the "numbers" and keeps a keen eye on the debt when investing into any business. The fund manager also holds no more than 100 securities at any one time and invests up to 2% of the total assets into any one vehicle using his bottom-up approach. More importantly, Royce is price driven, not position driven and generally sets buy and sell targets for each position.
If you want to learn more about his strategy visit the link below. http://www.roycefunds.com/About/People/roycecharles.asp
Chuck Royce has enjoyed one of the longest tenures of any mutual fund manager because of one reason - his performance has been stellar. Looking at the performance just in the Premier Fund, he has produced over 119% since 2000, an annualized return of 8.15%. Not bad considering the S&P 500 lost money for investors over the same period of time. Currently, Royce has over 28% of the $28 billion in assets placed into industrial companies and even though this is down slightly from the last period, it still makes up the majority of the advisor’s investments. Coming in second with 15% is the financial industry.
On April 1, he stated that the decline in the market over the first part of the year was not "terribly surprising" to him. I wonder what he'll think about the last month? With that in mind, Mr. Royce did go on to say that his "take on this hasn't changed over the last six months. I think that we're entering a period of low, positive returns on an annualized basis, and I would not be at all surprised to see the decade end with average annual 10-year returns in the 6% - 9% range. Of course, the history of markets and economies always teaches us to expect the unexpected, but my hunch is that this decade will be as quietly positive as the previous one was wildly disappointing. So I would caution any investor who thinks that the heady returns we've all enjoyed in the current bull period are going to be the "New Normal." My guess is that we're in for a long phase of solid but unspectacular returns for equities."
For more details on Chuck Royce, go to: http://www.gurufocus.com/ListGuru.php?GuruName=Chuck+Royce
In this article, I'd like to share with you some of Royce’s best holdings based on their earnings yield and current price in the market. Low P/E ratios are akin to high profit margins for a business. If you bought an entire company you would only recoup your investment once the earnings produced by the company exceed the price you paid. This simple fact is often overlooked when making an investment in the public markets, yet it is the basic tenet for all business owners. Of course low earnings multiples are only as good as the earnings they are pegged to. In the public markets, earnings growth is what Wall Street’s Traders are seeking on a quarterly basis almost. With that in mind, the following companies are some of the best in Chuck Royce’s portfolio right now.
Five of Chuck Royce's Best Low P/E Stocks:
No. 1: China Security & Surveillance Technology (CSR, Financial), Weightings:<0.01% - 11,600 Shares
No. 2: DryShips Inc. (DRYS, Financial), Weightings:<0.01% - 8,204 Shares
No. 3: Joe's Jeans Inc. (JOEZ, Financial),Weightings: 0.01% - 1,095,000 Shares
No. 4: Loral Space & Communications Inc, (LORL, Financial) Weightings: 0.05% - 369,809 Shares
No. 5: Enstar Group Ltd (ESGR, Financial), Weightings: 0.05% - 201,617 Shares
No. 1: China Security & Surveillance Technology (CSR)
China Security & Surveillance Technology, Inc. (CSR) is engaged through its indirect Chinese subsidiaries, in the manufacturing, distributing, installing, and servicing of surveillance and safety products and systems and developing surveillance and safety related software in China. The Company’s customers include governmental entities, such as customs agencies, courts, public security bureaus, and prisons; non-profit organizations, including schools, museums, sports arenas, and libraries and commercial entities, such as airports, hotels, real estate, banks, mines, railways, supermarkets and entertainment venues. China Security & Surveillance Technology has a market cap of $352.74 million; its shares were traded at around $5.15 with a P/E ratio of 4.33 and P/S ratio of 0.61.
Right now, the stock is 50% lower than its 52 week high and is looking to earn $1.15 in 2010, which will give it a forward earnings yield of 22%. If these numbers come into fruition, the stock could rise into the teens.
Chuck Royce owns 11,600 shares as of 3/31/2010, which accounts for< 0.01% of the $28.31 billion portfolio.
No. 2: DryShips Inc. (DRYS)
Dryships Inc., based in Greece, is an owner and operator of drybulk carriers that operate worldwide. The Company is engaged in the ocean transportation services of drybulk cargoes worldwide through the ownership and operation of the drybulk carrier vessels and deepwater drilling rig services through the ownership of ultra-deep water drilling rigs. Dryships Inc. has a market cap of $1.34 billion; its shares were traded at around $5.2 with a P/E ratio of 5.31 and P/S ratio of 1.63.
Just like CSR, DryShips has a high forward earnings yield (18%) and is trading well off the company's 52 week high. Of course, with the problems in Greece, no one can blame investors for waiting to see how this company performs.
Chuck Royce owns 8,204 shares as of 3/31/2010, which accounts for< 0.01% of the $28.31 billion portfolio.
No. 3: Joe's Jeans Inc. (JOEZ)
Joe's Jeans Inc. (Joe’s) is engaged in designing, developing and marketing of its Joe's products, which include denim jeans, related casual wear and accessories. The Company designs, develops and markets, and relies on third parties to manufacture its apparel products. The Company sells its products to numerous retailers, which include department stores, specialty stores and distributors worldwide, and through its retail stores. Joe's Jeans Inc. has a market cap of $137.31 million; its shares were traded at around $2.18 with a P/E ratio of 5.59 and P/S ratio of 1.71.
This is a new position in Royce's portfolio and despite a 395% rise this year, the stock sits well below the company's 52 week high.
Chuck Royce owns 1,095,000 shares as of 3/31/2010, which accounts for 0.01% of the $28.31 billion portfolio.
No. 4: Loral Space & Communications Inc, (LORL)
Loral Space & Communications is a satellite communications company. The Company operates in two business segments: satellite manufacturing and satellite services. Loral’s subsidiary, Space Systems/Loral, Inc. (SS/L) designs and manufactures satellites, space systems and space system components for commercial and government customers whose applications include fixed satellite services (FSS), direct-to-home (DTH) broadcasting, mobile satellite services (MSS), broadband data distribution, wireless telephony, digital radio, digital mobile broadcasting, military communications, weather monitoring and air traffic management. Loral Space And Communications Inc. has a market cap of $792.24 million; its shares were traded at around $38.86 with a P/E ratio of 4.3 and P/S ratio of 0.8.
Here’s another high earnings yielding position for Royce. In the last 12 months the company earned over $271.9 million on just $1.0 billion in sales. If they can meet their 2010 earnings estimates ($6.66) they will yield a 17% return based on Loral's current market value.
Chuck Royce owns 369,809 shares as of 3/31/2010, which accounts for 0.05% of the $28.31 billion portfolio.
No. 5: Enstar Group Ltd (ESGR)
Enstar Group Inc is engaged in the active search for and acquisition of one or more additional operating businesses. The Company conducts its business through two operating segments: reinsurance and consulting. Enstar Group Ltd. has a market cap of $875.61 million; its shares were traded at around $64.35 with a P/E ratio of 5.78 and P/S ratio of 8.61.
They are earnings a tons of money each year and have increased their book value from $17.36 in 2000 to over $59 currently. If they meet their earnings estimate ($9.84) for 2010, that will give the stock an earnings yield of 15%.
Chuck Royce owns 201,617 shares as of 3/31/2010, which accounts for 0.05% of the $28.31 billion portfolio.
The stock highlighted above are only what I feel are the best ideas still mispriced within this guru's portfolio. No one cares more about your money than you do. And, by using GuruFocus.com anyone can find stocks that fit their personal investment criteria. Remember, that you shouldn’t always follow the guru’s stock picks, but instead learn from both their mistakes and their success to become a better investor.
GuruFocus provides real time information and insights of Investment Gurus such as Warren Buffett and Chuck Royce for Premium Members. If you are not a premium member, click here to sign up or upgrade. 7-Day Free Trial is available.
Chuck Royce is one of the pioneers of small-cap investing, and uses value investing strategies to find small cap stocks. These companies are defined as being less market capitalizations under $2.5 billion with MicroCaps being $500 million and under. He's also stepped up his investments into Mid-Cap stocks with less than $10 billion.
He seeks absolute returns and focuses on these smaller companies that meet his value investing philosophy. Using this philosophy, he views sustainable returns as one of the most important factor when looking at the "numbers" and keeps a keen eye on the debt when investing into any business. The fund manager also holds no more than 100 securities at any one time and invests up to 2% of the total assets into any one vehicle using his bottom-up approach. More importantly, Royce is price driven, not position driven and generally sets buy and sell targets for each position.
If you want to learn more about his strategy visit the link below. http://www.roycefunds.com/About/People/roycecharles.asp
Chuck Royce has enjoyed one of the longest tenures of any mutual fund manager because of one reason - his performance has been stellar. Looking at the performance just in the Premier Fund, he has produced over 119% since 2000, an annualized return of 8.15%. Not bad considering the S&P 500 lost money for investors over the same period of time. Currently, Royce has over 28% of the $28 billion in assets placed into industrial companies and even though this is down slightly from the last period, it still makes up the majority of the advisor’s investments. Coming in second with 15% is the financial industry.
On April 1, he stated that the decline in the market over the first part of the year was not "terribly surprising" to him. I wonder what he'll think about the last month? With that in mind, Mr. Royce did go on to say that his "take on this hasn't changed over the last six months. I think that we're entering a period of low, positive returns on an annualized basis, and I would not be at all surprised to see the decade end with average annual 10-year returns in the 6% - 9% range. Of course, the history of markets and economies always teaches us to expect the unexpected, but my hunch is that this decade will be as quietly positive as the previous one was wildly disappointing. So I would caution any investor who thinks that the heady returns we've all enjoyed in the current bull period are going to be the "New Normal." My guess is that we're in for a long phase of solid but unspectacular returns for equities."
For more details on Chuck Royce, go to: http://www.gurufocus.com/ListGuru.php?GuruName=Chuck+Royce
In this article, I'd like to share with you some of Royce’s best holdings based on their earnings yield and current price in the market. Low P/E ratios are akin to high profit margins for a business. If you bought an entire company you would only recoup your investment once the earnings produced by the company exceed the price you paid. This simple fact is often overlooked when making an investment in the public markets, yet it is the basic tenet for all business owners. Of course low earnings multiples are only as good as the earnings they are pegged to. In the public markets, earnings growth is what Wall Street’s Traders are seeking on a quarterly basis almost. With that in mind, the following companies are some of the best in Chuck Royce’s portfolio right now.
Five of Chuck Royce's Best Low P/E Stocks:
No. 1: China Security & Surveillance Technology (CSR, Financial), Weightings:<0.01% - 11,600 Shares
No. 2: DryShips Inc. (DRYS, Financial), Weightings:<0.01% - 8,204 Shares
No. 3: Joe's Jeans Inc. (JOEZ, Financial),Weightings: 0.01% - 1,095,000 Shares
No. 4: Loral Space & Communications Inc, (LORL, Financial) Weightings: 0.05% - 369,809 Shares
No. 5: Enstar Group Ltd (ESGR, Financial), Weightings: 0.05% - 201,617 Shares
No. 1: China Security & Surveillance Technology (CSR)
China Security & Surveillance Technology, Inc. (CSR) is engaged through its indirect Chinese subsidiaries, in the manufacturing, distributing, installing, and servicing of surveillance and safety products and systems and developing surveillance and safety related software in China. The Company’s customers include governmental entities, such as customs agencies, courts, public security bureaus, and prisons; non-profit organizations, including schools, museums, sports arenas, and libraries and commercial entities, such as airports, hotels, real estate, banks, mines, railways, supermarkets and entertainment venues. China Security & Surveillance Technology has a market cap of $352.74 million; its shares were traded at around $5.15 with a P/E ratio of 4.33 and P/S ratio of 0.61.
Right now, the stock is 50% lower than its 52 week high and is looking to earn $1.15 in 2010, which will give it a forward earnings yield of 22%. If these numbers come into fruition, the stock could rise into the teens.
Chuck Royce owns 11,600 shares as of 3/31/2010, which accounts for< 0.01% of the $28.31 billion portfolio.
No. 2: DryShips Inc. (DRYS)
Dryships Inc., based in Greece, is an owner and operator of drybulk carriers that operate worldwide. The Company is engaged in the ocean transportation services of drybulk cargoes worldwide through the ownership and operation of the drybulk carrier vessels and deepwater drilling rig services through the ownership of ultra-deep water drilling rigs. Dryships Inc. has a market cap of $1.34 billion; its shares were traded at around $5.2 with a P/E ratio of 5.31 and P/S ratio of 1.63.
Just like CSR, DryShips has a high forward earnings yield (18%) and is trading well off the company's 52 week high. Of course, with the problems in Greece, no one can blame investors for waiting to see how this company performs.
Chuck Royce owns 8,204 shares as of 3/31/2010, which accounts for< 0.01% of the $28.31 billion portfolio.
No. 3: Joe's Jeans Inc. (JOEZ)
Joe's Jeans Inc. (Joe’s) is engaged in designing, developing and marketing of its Joe's products, which include denim jeans, related casual wear and accessories. The Company designs, develops and markets, and relies on third parties to manufacture its apparel products. The Company sells its products to numerous retailers, which include department stores, specialty stores and distributors worldwide, and through its retail stores. Joe's Jeans Inc. has a market cap of $137.31 million; its shares were traded at around $2.18 with a P/E ratio of 5.59 and P/S ratio of 1.71.
This is a new position in Royce's portfolio and despite a 395% rise this year, the stock sits well below the company's 52 week high.
Chuck Royce owns 1,095,000 shares as of 3/31/2010, which accounts for 0.01% of the $28.31 billion portfolio.
No. 4: Loral Space & Communications Inc, (LORL)
Loral Space & Communications is a satellite communications company. The Company operates in two business segments: satellite manufacturing and satellite services. Loral’s subsidiary, Space Systems/Loral, Inc. (SS/L) designs and manufactures satellites, space systems and space system components for commercial and government customers whose applications include fixed satellite services (FSS), direct-to-home (DTH) broadcasting, mobile satellite services (MSS), broadband data distribution, wireless telephony, digital radio, digital mobile broadcasting, military communications, weather monitoring and air traffic management. Loral Space And Communications Inc. has a market cap of $792.24 million; its shares were traded at around $38.86 with a P/E ratio of 4.3 and P/S ratio of 0.8.
Here’s another high earnings yielding position for Royce. In the last 12 months the company earned over $271.9 million on just $1.0 billion in sales. If they can meet their 2010 earnings estimates ($6.66) they will yield a 17% return based on Loral's current market value.
Chuck Royce owns 369,809 shares as of 3/31/2010, which accounts for 0.05% of the $28.31 billion portfolio.
No. 5: Enstar Group Ltd (ESGR)
Enstar Group Inc is engaged in the active search for and acquisition of one or more additional operating businesses. The Company conducts its business through two operating segments: reinsurance and consulting. Enstar Group Ltd. has a market cap of $875.61 million; its shares were traded at around $64.35 with a P/E ratio of 5.78 and P/S ratio of 8.61.
They are earnings a tons of money each year and have increased their book value from $17.36 in 2000 to over $59 currently. If they meet their earnings estimate ($9.84) for 2010, that will give the stock an earnings yield of 15%.
Chuck Royce owns 201,617 shares as of 3/31/2010, which accounts for 0.05% of the $28.31 billion portfolio.
The stock highlighted above are only what I feel are the best ideas still mispriced within this guru's portfolio. No one cares more about your money than you do. And, by using GuruFocus.com anyone can find stocks that fit their personal investment criteria. Remember, that you shouldn’t always follow the guru’s stock picks, but instead learn from both their mistakes and their success to become a better investor.
GuruFocus provides real time information and insights of Investment Gurus such as Warren Buffett and Chuck Royce for Premium Members. If you are not a premium member, click here to sign up or upgrade. 7-Day Free Trial is available.
