Dodge & Cox
has a portfolio of 168 stocks, including three tiny new positions
they bought in the first quarter: Agilent Tech (
A
), Moodys Corp. (
MCO
) and the S&P 500 (
SPY
).
Managers at
Dodge & Cox
, a highly regarded investment firm, typically buy stocks whose
long-term earnings and cash flow prospects exceed their current
valuations. Their top holdings are: Hewlett Packard (
HPQ
), Wells Fargo (
WFC
), Capital One Financial (
COF
), Comcast Corp. (
CMCSA
) and GlaxoSmithKline (
GSK
).
Regarding their outlook for the first quarter,
Dodge & Cox
Chairman and President Kenneth Olivier said in his year-end
letter, "term returns, and as significant pessimism about the
future has driven down equity prices, we have been finding
attractive opportunities around the world. Today, global equity
markets are trading at 10 to 12 times forward estimated earnings,
and many companies have strong balance sheets and opportunities
for long-term global growth. Corporate bonds are also very
attractive in this environment. Their yield premiums are at high
levels now, and we're seeing interesting opportunities in
companies across a range of industries."
Dodge & Cox
bought 5,303 shares of
Agilent Tech (
A
)
at an average price of $43 in the first quarter of 2012.
Agilent Technologies is the world's premier measurement company
and a technology leader in communications, electronics, life
sciences and chemical analysis. Agilent Tech has a market cap of
$14.6 billion; its shares were traded at around $39.81 with a P/E
ratio of 13.8 and P/S ratio of 2.2. The dividend yield of Agilent
Tech stocks is 1%. Agilent Tech had an annual average earnings
growth of 13.2% over the past five years.
On March 9, Agilent reported operating results for the quarter
ended Jan. 31, 2011. It had net income of $193 million, compared
to $79 million the previous year, and generated $120 million of
cash from operations, compared to $30 million the previous year.
Net revenue also increased 25% to $1.5 billion over the previous
year.
Revenue improvement was driven by strong growth in academic and
government markets and increased demand in pharmaceutical
markets. The company also acquired Varian, and divested two
businesses, which resulted in an overall 6 percent increase in
revenue.
In January, the company initiated a quarterly cash dividend of 10
cents.
Dodge & Cox bought 5,500 shares of
Moody's Corp. (
MCO
)
at an average price of $39.
Moody's Corporation is the parent company of Moody's Investors
Service, a provider of credit ratings, research and analysis
covering debt instruments and securities in the global capital
markets, Moody's KMV, a provider of credit risk processing and
credit risk management products for banks and investors in
credit-sensitive assets serving the world's largest financial
institutions.
Moody's Corp. has a market cap of $9.29 billion; its shares were
traded at around $38.57 with a P/E ratio of 16.5 and P/S ratio of
4.1. The dividend yield of Moody's Corp. stocks is 1.5%. Moody's
Corp. had an annual average earnings growth of 9.8% over the past
10 years.
In the first quarter, Moody's revenue jumped to $646.8 million
from $577.1 million the previous year. Net income edged up to
$175.5 million from $157.1 million the previous year. The
increases primarily reflected growth in corporate and public,
project and infrastructure debt issuance as well as continued
solid performance from Moody's Analytics. Market conditions have
made the company cautious about their expectations for the
remainder of the year.
Dodge & Cox's final purchase was the
S&P 500 ETF (
SPY
)
. It acquired 1,505 shares at an average price of $135 per share.
In the last year, the S&P has returned 0.04% and 11.9% year
to date. Last year, the Dodge & Cox Fund returned negative
4.08%, and the S&P returned 2.12%.
See Dodge & Cox's other first quarter adds, sales and
reductions in their newly updated first quarter portfolio here.
Also check out the Undervalued Stocks, Top Growth Companies and
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