has managed the FPA Capital Fund (
) and FPA New Income Fund since inception in 1984, and is best
known for calling the 2008 housing crash. He recently
returned from a one-year sabbatical
in 2010, only to find that the markets are repeating the
ill-advised patterns of the past. He did not buy new stocks in
the second quarter, but added to four of his holdings: DeVry Inc.
), Newfield Exploration Co. (
), InterDigital (
), Patterson-UTI Energy (
DeVry Inc. (
bought 629,867 shares of DeVry at an average price of $30 in the
second quarter. This was added to the 53,600 shares he bought in
the first quarter at an average price of $38 per share, bringing
his total holding to 682,867 shares.
DeVry, one of North America's largest for-profit education
companies, saw its stock fall more than 58% in the last year. A
pronounced dive from about $66 to $40 occurred from mid-July to
mid-August 2011, as the company announced a 25.6 percent drop in
enrollment from the previous year. The company attributed the
decline to both the prolonged economic downturn causing people to
postpone returning to school, and new government regulations of
the industry, which was having a "near-term negative impact."
Prior to the fourth quarter 2011, the company's enrollment had
been increasing by double digits for an extended period. In the
most recent third quarter results, announced March 31, 2012,
DeVry's undergraduate enrollment had dropped 19.7% from the
previous year. Net income also decreased 28% and revenue fell 4%
from the previous year.
Baron Funds commented on DeVry that it noted the top and
bottom-line declines but: "Long term, we remain positive on DeVry
given its solid history of graduate placement and its focus on
areas that should experience sustainable job creation."
Newfield Exploration Co. (
Rodriguez bought 441,888 shares of Newfield Exploration at an
average price of $31 in the second quarter. This was added to the
645,312 shares he had accumulated over the years starting in the
fourth quarter of 2008, when the stock price was just $21 on
average. His holding at the end of the quarter totaled 1,087,200.
Newfield Exploration, which develops and acquires oil and natural
gas properties primarily in the Gulf of Mexico, saw its stock
slid almost 57% in the last year. The stock ended 2011 under $40,
off its mid-year high of about $50. In the second quarter of
2011, the company announced that its full-year oil production
would be at the low end of its original guidance of 312 to 323
Bcfe, an 8% increase over the previous year, due to repairs in
its Abu field in offshore Malaysia that deferred production. The
field was repaired and back in operation by the time quarterly
results were announced.
The company announced its production expectations for 2011 in
July. They forecast that their oil/liquids production will
increase nearly 30% over 2011, as the company continues its shift
to oil that it began in 2009 and over half of its production for
2012 will be oil. The company raised its 2012 expectations for
the second time this year to 296 to 304 Bcfe.
InterDigital Inc. (
Rodriguez bought 400,948 InterDigital shares at an average price
of $28 in the second quarter. This is in addition to the 519,700
shares he bought in the second quarter of 2011 and first quarter
of 2012 at average prices of $42.50 and $39. His holding at the
end of the second quarter totaled 920,648 shares.
InterDigital a digital wireless telecommunications systems
company, saw its stock decline almost 63% over the last year. In
the first quarter of the year, the company's revenue decreased
12%, patent licensing royalties decreased 11%, and net income
decreased 53% from the previous year. The company is also mired
in litigation with companies including Nokia (
), LG, Huawei and ZTE for 3G patent infringement. Intellectual
property enforcement and non-patent litigation cost the company
approximately $12.3 billion in the first quarter 2012 and $4.1
million in the first quarter of 2011.
InterDigital also signed five new or expanded license agreements
in the first quarter and recently sold $375 million in patents to
Intel, which has released three smartphones and is developing
over 20 tablets.
Patterson-UTI Energy Inc. (
Rodriguez bought 109,000 Patterson shares in the second quarter
at an average price of $15. He had a large holding in the company
that predates 2008, but since 2009 he has only been selling
shares. His total holding at the end of the second quarter was
Patterson, one of the top domestic land drilling services
providers to oil and natural gas companies, saw its stock decline
almost 55% in the last year. FPA Capital commented on its
Patterson holding in its second-quarter 2011 commentary, after
the stock had climbed to 52-week highs and just before it fell
back to end the year essentially flat: "Patterson-UTI Energy, the
leading land rig company in the U.S., continued to benefit from
increased drilling. The company has performed well by adding new
rigs to its fleet, taking advantage of demand for the higher-end
equipment that is needed and preferred in the more demanding
shale developments. Patterson-UTI has also added significant frac
capacity over the last few years. This is now paying off since
this equipment is being used in shale developments."
The company's first-quarter 2012 net income increased 37% to
$97.3 million over the previous year on continued U.S. rig
activity growth, and it increased its number of rigs operating to
237 from 232 in the previous quarter. The company is able to
transition its rigs from dry gas to oil and liquids rich markets,
as demand decreases for natural gas.
Patterson also added a new chief operating officer in April and
announced that its CEO would retire later in the year.
Rodriguez seems to like oil and gas plays this year as his top
two holdings are in the sector: Rowan Companies (
) and Ensco Plc (
). His top five holdings are rounded out with Avnet Inc. (
), Arrow Electronics (
) and Western Digital Corp. (
To see more of his buys and sells,
see his portfolio here
. Also check out the Undervalued Stocks, Top Growth Companies and
High Yield stocks of Robert Rodriguez.About GuruFocus:
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