As 2012 nears its end and many investors take time to
reevaluate their portfolios, you may consider this list of the
top Guru Bargains - the stocks that have dropped the most since
Gurus bought them - as a jumping-off point for research. The list
is taken from
GuruFocus' Guru Bargains screener
, which reports the stocks whose prices have declined more than
20% since Gurus bought them.
5. ITT Educational Services (
bought 12,000 ITT Educational Services shares for $45.50 per
share in the third quarter, and it has since dropped 59.9%,
making it the stock with the fifth largest discount since a Guru
bought it. Grantham's trading history with ITT predates the
second quarter of 2007, and ended in the second quarter of 2012
when he closed out the position at $60, until he opened the new
position at the lower price. ITT shares are $17 each in Monday
ITT is a for-profit, technology-oriented undergraduate and
graduate education company, owning more than 140 ITT Technical
Institutes and Daniel Webster Colleges. Approximately 60,000
students attend its campuses in 39 states.
In the past 12 months, ITT's revenue increased by 1.7 percent and
book value by 17.3 percent. EBITDA declined by 18.1 percent and
free cash flow by 76.5 percent.
ESI has a P/E of 1.9, P/B of 4.9 and P/S of 0.3 (near a
three-year low). It does not pay a dividend.
4. Centrais Electricas Brasileiras (Electrobras) SA (
This stock, from
's portfolio, has declined 54 percent since
bought it in the third quarter. He owns 2,335,420 shares of the
stock which he has been trading since the fourth quarter of 2009.
The stock's price in Monday trading is $3 a share.
Based in Brazil, Electrobras is the largest company in the
electric power sector in Latin America, with six subsidiaries,
six distribution companies, a research center, eletrobras
eletropar, and 50 percent of Itaipu Binacional. The Brazilian
federal government owns a majority of the company's shares.
In the last 12 months, Electrobras' revenue per share increased
8.6 percent and EBITDA increased 38.8 percent. Free cash flow
tumbled 170.2 percent and book value declined 10.8 percent.
Electrobras has a P/E of 1.2, P/B of 0.1 and P/S of 0.3. It does
not pay a dividend.
3. Active Network Inc. (
Active Network's price has dropped 61% since PRIMECAP Management
bought it. PRIMECAP's holding history with the stock is brief: It
bought 100,300 shares in the second quarter of 2012 for $15 a
share on average, and enlarged the stake by 635,300 shares in the
second quarter of 2012 when the price slid further to $13 per
share on average. It sells for $4.68 a share in Monday trading.
Active is an event-management and community-building company that
has 50,000 clients globally and is involved in over 80 million
transactions a year. The company went public in mid-2011 and its
price has plunged 75% since then.
In its third quarter financial results, reported Nov. 2, 2012,
Active divulged a 22% year-over-year revenue increase, and a net
loss of $6 million, steeper than a net loss of $1.4 million a
year previously. The company's balance sheet was also less
fortified with cash, at $78.5 million, falling from $108.7
million a year previously.
With no earnings, Active Network has no P/E, a P/B of 0.8 and P/S
of 0.9. It also pays no dividend.
2. Inteliquent (
Since Jim Simons bought this stock in the third quarter, its
price depleted 77 percent. He began trading the stock in the
fourth quarter of 2009 around a price of $22 per share and has
been trading it ever since. His total holding now stands at
339,503 shares. In Monday trading, Inteliquent costs $2.67 a
Inteliquent is a global voice and data corporation that provides
voice, IP Transit and Ethernet solutions in more than 80
countries, and is the largest global Ethernet interconnection
In the past 12 months, Inteliquent grew its revenue per share by
20.6 percent, EBITDA by 1.3 percent, free cash flow by 6.4
percent and book value by 17.4 percent.
Inteliquent does not pay a regular dividend but on Oct. 5, 2012,
it decided on a special $3.00 cash dividend, costing the company
about $96.7 million, which it paid to shareholders on Oct. 30,
The P/E ratio for Inteliquent is 6.1, the P/B is 0.3 (close to a
three-year low) and the P/S is 0.3.
Sycamore Networks (
The biggest Guru bargain available today is another Jim Simons
pick: Sycamore Networks. The company watched it stock lose 85%
since Simons bought for $15 a share in the third quarter. In
Monday trading, it is priced at $2.29 a share. Simons has been
trading the stock since before the second quarter of 2007.
Sycamore Networks provides bandwidth management solutions for
fixed line and mobile network operators around the world, with
clients among Tier 1 service providers, government agencies and
Sycamore, in the past 12 months, grew revenue per share by 16.4
percent. EBITDA fell by 30.4 percent, free cash flow fell 69.9
percent and book value fell 11.4.
Without earnings, Sycamore has no P/E. Its P/B is 0.2 and P/S is
1.1 (close to a two-year low).
It pays no regular dividend, but on Nov. 7 decided to distribute
$0.50 per share of common stock to shareholders, which it paid on
Find more stocks discounted since Gurus bought them in
GuruFocus' Guru Bargains screener
, and separate stocks by company, Guru, buy/sell, position size
or discount size.About GuruFocus: GuruFocus.com tracks the stocks
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