Prolific investor Ken Fisher (Trades, Portfolio), leader of Fisher Asset Management, disclosed his third-quarter portfolio earlier this week, listing 71 new holdings.
Founded in 1979, the guru’s Camas, Washington-based firm approaches investing with the belief that supply and demand exclusively determine stock prices, and investors can only gain an advantage through finding information that is not widely known by the markets or by interpreting information differently. The firm uses a framework called The Four Market Conditions to help determine the appropriate investment strategy for the current environment.
Based on these criteria, the investor’s five largest buys for the quarter were Airbus SE (EADSY, Financial), Global Payments Inc. (GPN, Financial), Global X Robotics & Artificial Intelligence Thematic Exchange-Traded Fund (BOTZ, Financial), Industrial Select Sector SPDR Fund (XLI, Financial) and Alteryx Inc. (AYX, Financial).
Airbus
Fisher invested in 719,008 shares of Airbus, dedicating 0.03% of the equity portfolio to the holding. The stock traded for an average price of $34.76 per share during the quarter.
The French aircraft manufacturer has a $108.63 billion market cap; its shares were trading around $35.01 on Wednesday with a price-earnings ratio of 26.83, a price-book ratio of 13.47 and a price-sales ratio of 1.44.
The Peter Lynch chart shows the stock is trading below its fair value, suggesting it is undervalued.
GuruFocus rated Airbus’ financial strength 5 out of 10. Although the company has adequate interest coverage, the Altman Z-Score of 1.37 warns it could be in danger of going bankrupt.
The company’s profitability scored a 7 out of 10 rating, driven by margins and returns that outperform over half of its competitors, a high Piotroski F-Score of 7, which indicates operations are healthy, and consistent earnings and revenue growth. Airbus also has a business predictability rank of three out of five stars. According to GuruFocus, companies with this rank typically see their stocks gain an average of 8.2% per annum over a 10-year period.
The guru holds 0.02% of Airbus’ outstanding U.S.-listed shares.
Global Payments
The investor picked up 199,149 shares of Global Payments, allocating 0.03% of the equity portfolio to the position. During the quarter, the stock traded for an average price of $163.24 per share.
Headquartered in Atlanta, the company, which provides payment technology and software solutions, has a market cap of $48.97 billion; its shares were trading around $164.26 on Wednesday with a price-earnings ratio of 53.33, a price-book ratio of 6.46 and a price-sales ratio of 7.26.
According to the Peter Lynch chart, the stock is overvalued.
As a result of issuing approximately $1.1 billion in new long-term debt over the past three years, Global Payments’ financial strength was rated 4 out of 10 by GuruFocus. In addition, the company has weak interest coverage. The Altman Z-Score of 3.47, however, suggests the company is in good financial standing.
The company’s profitability fared better, scoring a 9 out of 10 rating on the back of operating margin expansion, strong returns that outperform over half of its industry peers and a moderate Piotroski F-Score of 5, which indicates business conditions are stable. Despite recording a decline in revenue per share over the past 12 months, Global Payments has a 3.5-star business predictability rank. GuruFocus says companies with this rank typically see their stocks gain an average of 9.3% per year.
Of the gurus invested in Global Payments, Philippe Laffont (Trades, Portfolio) has the largest stake with 1.16% of outstanding shares. Steven Cohen (Trades, Portfolio), Robert Karr (Trades, Portfolio), Pioneer Investments (Trades, Portfolio) and Joel Greenblatt (Trades, Portfolio) also own the stock.
Global X Robotics & Artificial Intelligence Thematic ETF
Having previously exited a position in the ETF in the first quarter, the guru entered a new holding of 820,476 units, giving it 0.02% space in the equity portfolio. Units traded for an average price of $19.55 during the quarter.
The ETF, which invests in companies that will potentially benefit from the increased adoption and utilization of robotics and artificial intelligence, has a $1.46 billion market cap; its units were trading around $20.80 on Wednesday with a price-earnings ratio of 25.9 and a price-book ratio of 3.01. The 14-day relative strength index is 68.6, which means it is approaching overbought levels.
Industrial Select Sector SPDR Fund
Fisher purchased 187,863 units of the Industrial Select Sector ETF, impacting the equity portfolio by 0.02%. During the quarter, the units traded for an average price of $76.72.
The ETF tracks the performance of the Industrial Select Sector Index, which is composed of large-cap U.S. industrial stocks. It has a market cap of $10.19 billion; its units were trading around $79.14 on Wednesday with a price-earnings ratio of 18.99 and a price-book ratio of 4.68. The 14-day relative strength index is 64.32, which means it is approaching overbought levels.
Alteryx
The guru established a 90,244-share holding of Alteryx. The trade had an impact of 0.01% on the equity portfolio. The stock traded for an average per-share price of $124.23 during the quarter.
The Irvine, California-based software company has a $6.01 billion market cap; its shares were trading around $92.39 on Wednesday with a price-earnings ratio of 331.99, a price-book ratio of 17.87 and a price-sales ratio of 20.27.
Based on the Peter Lynch chart, the stock appears to be overvalued.
GuruFocus rated Alteryx’s financial strength 6.2 out of 10 despite having low interest coverage and poor earnings quality based on its Sloan ratio of 44.13%. The robust Altman Z-Score of 17.65, however, suggests the company is in good financial health.
The company’s profitability did not fare as well, scoring a 2 out of 10 rating despite having margins and returns that outperform a majority of competitors. Alteryx also has a moderate Piotroski F-Score of 5.
Jim Simons (Trades, Portfolio)’ Renaissance Technologies is the company’s largest guru shareholder with 0.62% of outstanding shares. Other top guru investors include Cohen, Paul Tudor Jones (Trades, Portfolio), Greenblatt, Stanley Druckenmiller (Trades, Portfolio) and Caxton Associates (Trades, Portfolio).
Additional trades
During the quarter, Fisher also established positions in Catalent Inc. (CTLT, Financial), Ceridian HCM Holding Inc. (CDAY, Financial), Cree Inc. (CREE, Financial), Paylocity Holding Corp. (PCTY, Financial) and Proofpoint Inc. (PFPT, Financial), among many other companies.
The guru’s vast $90.9 billion equity portfolio, which is composed of 860 stocks, is largely invested in the technology sector with a weight of 25.34%.
Disclosure: No positions.
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