runs Royce & Associates, an investment company legendary for
its small-cap focus and superior returns. As value investors, his
team searches for stocks trading less than their estimate of the
company's intrinsic worth, or enterprise value. Employing this
strategy and trading in numerous stocks, he beat over the past
five years with a cumulative return of 33.7%, compared to the
index's 1.1% loss.
Recently, Royce has been adding to a significant number of stocks
in his portfolio that he owns 5% or more of. On Monday he
reported adding to his positions in three more such companies on
Dec. 31, according to GuruFocus Real Time Picks: International
), Landauer (
) and Maidenform Brands (
International Rectifier (
Royce increased his stake in stake in IRF by 3.94%, to own a
total of 5,961,714 shares. After the purchase, he owns 8.62% of
International Rectifier creates power management technology,
which is used in computers, lighting, appliances, satellites,
automobiles and defense systems. The company has a market cap of
$1.3 billion and its stock has declined almost 10% over the past
IRF's revenue in the past 12 months declined 15.8%, EBITDA
declined 110.2% and book value declined 6.1%. Its midday trading
price is $18.85, which is near its book value per share of
Cash on the company's balance sheet totals $508 million, and
long-term liabilities total $42.45 million. It has no long-term
In the first quarter 2013 results, released Nov. 1, 2012, IRF
reported a 16.6% year-over-year decrease in revenue to $252.5
million. It also reported a net loss of $28.8 million, or $0.42
per fully diluted share, after net income of $22 million, or
$0.31 per fully diluted share the previous year.
Though first quarter results exceeded their expectations, the
company faced lower demand most of its end markets, particularly
appliances and industrial goods. Demand remained strong in its
performance computing and server end markets. It expects weak
demand to continue through its December quarter.
IRF has a P/E of 25.4, P/B of 1 and P/S of 1.13, which is close
to a three-year low.
Royce increased his holding of Landauer by 4.22% at an average
price of $60.64, expanding his ownership of the company to 9.56%.
He owns 904,005 shares after the purchase.
Landauer is a radiation science and services company that
provides services to organizations with potential exposure to
ionizing radiation with its proprietary technology that enables
the most precise measurements possible. The company has a $580.43
million market cap, and its stock has increased 15.9% over the
In the past five years, Landauer's revenue increased at an annual
rate of 11.8%, EBITDA increased at a rate of 0.5% and book value
increased at a rate of 9.6%. Its free cash flow declined at a
rate of 5.4% during the same time.
Laudauer as of the end of third quarter 2012's end has $52.8
million in cash on its balance sheet, along with $176.76 million
in long-term liabilities and debt.
Revenue in the company's fiscal year 2011 grew 26.5% year over
year to $152.4 million, with its new medical products segment
contributing $13.5 million to the increase. Net income decreased
21.5% to $19.5 million.
For fiscal year 2013, the company is anticipating revenue to be
between $164 million to $168 million, and net income in the range
of $21 million to $23 million.
Laundauer has a P/E of 29.9; its P/B at 6.68 and P/S at 4.47 are
both near their respective one-year highs.
LDR data by GuruFocus.com
Maidenform Brands (
Royce grew his holding in Maidenform Brands by 10.37% for an
average price of $19.49. The purchase brings his total holding to
2,195,332, or 9.31% of the company.
Maidenform Brands is an intimate apparel company with a portfolio
of brands, selling in department stores, mass merchants, national
chains, company-operate outlets and elsewhere. The company's
stock in the past year declined 7% to close at $19.77 in midday
Over the last five years, the company's top-line revenue grew at
an annual rate of 7.5%, and book value grew at an annual rate of
23.7%. EBITDA during the same time decreased at an annual rate of
As of 2012's third quarter end, Maidenform showed $157.92 million
in cash on its balance sheet, along with $107.87 million in
long-term liabilities and debt.
In the third quarter, the company reported bringing in $150.2 in
net sales, a 1.3% increase year over year. Net income reached
$10.74 million, compared to $10.2 million a year previously, with
EPS of $0.46, compared to $0.44. EPS met the company's
expectations though revenue was lower than planned. The company
expects to meet global economic challenges and increased
competition with increased innovation, increased brand equity
leverage and operational improvements.
For the fourth quarter it expects sales in the range of $130
million to $135 million, and EPS in the range of $0.20 and $0.24
Maidenform currently has a P/E of 18.6; its P/B at 1.72 and P/S
at 0.72 are both close to three-year lows. Its price at $18.48 is
also near a two-year low.
MFB data by GuruFocus.com
For more of Chuck Royce's stock picks, see his portfolio here.
Also check out the Undervalued Stocks, Top Growth Companies and
High Yield stocks of Chuck Royce.About GuruFocus: GuruFocus.com
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