Chairman and Co-Chief Investment Officer of the $2 billion value
investing firm Century Management,
Arnold Van Den Berg
, reported his third-quarter stock holdings this week. He bought
seven new stocks during the quarter, for a total of 64 companies
represented in the portfolio and a 5% turnover from the previous
To determine which stocks to buy, Van Den Berg applies
value-investing principles to assign intrinsic value. He then buys
at a substantial margin of safety and typically holds for three to
The following new stocks merited the largest allocation in his
portfolio: Fidelity National Financial Inc. (
), POSCO (
), Great Lakes Dredge & Dock Corp (
) and UCP Inc. (
Fidelity National Financial Inc. (
Van Den Berg purchased 650,605 shares of Fidelity National
Financial Inc. in the third quarter when the stock averaged $25 per
share, in a new position constituting 1.7% of his portfolio.
Shares of Fidelity National have traded up 13% over the past 12
months and are priced around $25.80 on Tuesday - near a 10-year
Fidelity National Financial is the largest title insurance company
in the U.S. by number of insurance policies written, and owns
minority interests in Ceridian Corp., Remy International Inc. and
American Blue Ribbon Holdings LLC.
The company reported its strongest first quarter title results
since 2004 in May, with an adjusted pre-tax title margin of 12.3%,
a 16% increase from the prior-year quarter. Its second quarter
pre-tax title margin was also a record at 16.5%, the widest since
2003, due to a strengthening residential purchase market and strong
Financial growth has occurred consistently at the company this
year, with two consecutive quarters of revenue growth over the
corresponding previous year quarter. Second quarter consolidated
revenue jumped roughly 32% and net earnings declined 5.4%. To
increase and diversify its recurring revenue base, Fidelity
National Financial purchased Lender Processing Services for $2.9
billion in the second quarter.
Fidelity National Financial 10-year revenue and earnings history:
Van Den Berg purchased 171,465 shares of POSCO in the third quarter
when the price averaged $73 per share. The new position constitutes
1.2% of his portfolio.
In the past 12 months POSCO shares slid 10% to around $72.23
A Korea-based company, POSCO manufactures steels products and has a
$22.32 billion market cap.
POSCO's revenue and earnings had been in decline for at least two
consecutive quarters, but revenue picked up in the second quarter
of 2013, increasing 7% quarter over quarter to $16.45 billion. Net
profit continued to decline sequentially in the second quarter but
increased 17.5% year-over-year to $466 million.
Weak steal prices in the first half of the year continued due to
over-inventory even though demand increased 7%. Balance between
supply and demand should increase in the third quarter as inventory
destocking is completed and steelmakers reduce production, POSCO
said in its July earnings statement. The company is expecting a 5%
increase in global demand for full-year 2013, according to data
from the World Steel Association, led by India and South East Asia.
POSCO's 10-year revenue and earnings history:
POSCO has a P/E of 13.5, P/B of 0.6 and P/S of 0.39.
Great Lakes Dredge & Dock Corp (
Van Den Berg purchased 857,707 shares of Great Lakes Dredge &
Dock Corporation in the third quarter when the stock averaged $7
per share. The position constitutes 0.63% of his portfolio.
In the past 12 months, Great Lakes Dredge & Dock Corp. shares
fell almost 9%. The price is around $7.05 Tuesday.
Great Lakes Dredge & Dock Corp is a dredging contractor that
maintains harbors, beaches and wetlands, and creates new land
GLDD revenue increased 22% year over year in the company's first
quarter and declined 6.3% year over year in the second quarter.
Earnings also fell to $0.04 in the first quarter from $1.1 million
in the year-ago quarter, and then to a net loss of $25.2 million in
the second quarter compared to earnings of $1.3 million in the
prior-year quarter. The company holds $271.6 million in cash on its
balance sheet with $4420 million in long-term liabilities and debt.
GLDD's 10-year revenue and earnings history:
The company has a P/B of 1.7 and P/S of 0.60.
UCP Inc. (
Van Den Berg purchased 301,726 shares of UCP at an average
third-quarter price of $14 per share, for a 0.44% portfolio
Shares are up 5% since July, for a UCP share price around $14.71 on
A West-Coast home builder and land developer, UCP builds homes or
sells lots primarily in Northern California and around Puget Sound
in Washington State.
UCP held its initial public offering on July 17, 2013, listing
shares at $15. In its second quarter, the company announced $1.1
million in net losses, decreased from $2.2 million in the
corresponding year-ago quarter, driven by revenue growth and
undercut by gross margin decline and increased SG&A, as well as
$0.9 million in IPO costs. Revenue increased to $27.7 million from
$1.4 million in the corresponding year-ago quarter, as homebuilding
revenue increased to $20.9 million from $1.4 million. UCP delivered
57 homes to an average of seven communities, compared to six homes
to two communities a year previously. It also increased the average
home price by 53.6%.
For more Arnold Van Den Berg stocks go to his portfolio here.
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