of Davis Selected Advisers reported to decreasing his shares of
information management company, Iron Mountain (
), on Nov. 16 according to
GuruFocus Real Time Picks
This share reduction of the company makes the second in two
months, and has since totaled almost 2 million shares from its
prior reporting, bringing Davis' shareholding to 15,245,796 from
17,223,574 shares. In the past five years, Davis has reduced more
in the stock than added, and now stands at 8.8 percent owner of
Davis' investment philosophy requires three things (from
- "Often these are individuals who think like owner-operators,
who consider the strategic and operational implications of their
decisions, who allocate capital on a day-to-day basis in a
financially productive fashion, and who manage risk in a manner
that maximizes shareholder value over full market cycles."
Durable, Financially Strong Business Models
- Companies that are "well-positioned to benefit from long-term
Sustainable Competitive Advantages
- Businesses with "wide (and growing) competitive moats which may
include globally recognized brands, a dominant or growing share
in a growing market, a superior profit model, a lean cost
structure, unique distribution advantages, unique intellectual
In a 13D filing to the SEC dated Nov. 19, the purpose of Davis'
recent transaction with Iron Mountain stated: "
"On March 23, 2011 via an article published in a major newspaper,
Davis Advisors announced that it will likely support the four
candidates nominated to the [Iron Mountain's] board of directors
by existing shareholders. DavisAdvisors may have additional
conversations with [Iron Mountain] and/or third parties regarding
opportunities to maximize the [Iron Mountain]'s value..."
With a market cap of $5.61 billion, Boston-based Iron Mountain
provides information storage and management solutions through its
1,000 facilities in 32 countries. Some of its solutions include
records management, data backup and recovery, and secure
shredding that help organization "lower storage costs, comply
with regulations, recover from disaster and better use their
information for business advantage," according to the website.
In its third quarter fiscal report, Iron Mountain reported that
its revenue was down 2.6% compared to the same time last year,
while its adjusted earnings per share rose to $0.34 per share
compared to prior year's $0.31 per share on a GAAP basis.
"Reported results were negatively impacted by significantly lower
recycled paper prices and weakened foreign currencies," said
Richard Reese, Iron Mountain's chairman and CEO, in the company's
fiscal report. "Our organization is performing well and remains
on-track towards achieving our financial targets for the year.
Iron Mountain is a durable, high-return business with significant
opportunities to grow cash flow for a very long time."
In Iron Mountain's
, its Free Cash Flow growth has experienced an upward trend for
the past five years, consistently expanding at a rate of 94.7
GuruFocus ranks Iron Mountain
stars in Business Predictability
. Despite three Severe Warning signs that indicate a declining
operating margin and an Altman Z-Score in distress, its three
Good Signs show a growth in per share revenue, reflective of its
recent third quarter reports, a dividend yield close to a
two-year high, and a P/E ratio close to a one-year low.
Iron Mountain is currently trading at $33.04, and is up 1.06
percent for today's afternoon trading. It has a P/E (ttm) ratio
of 35.9, a P/B ratio of 4.3 and a P/S ratio of 1.9.
Besides Davis, other Gurus who have holding of Iron Mountain
include Jim Simons, Joel Greenblatt and Ray Dalio. (View its Guru
holding history on IRM: Holding History).
Davis also reported his third quarter portfolio updates recently
consisting of 47 transactions, one of which was yet another
reduction of his Iron Mountain stake by 22.42 percent. In total,
the updates consisted:
Additions to Current Shares
Currently, there are 197 stocks in Davis' portfolio, valued $41.9
billion and a quarter-over-quarter turnover rate of 1 percent.
View the rest of Chris Davis' portfolio updates here.
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