The Score Board of Gurus
on GuruFocus gives a picture of how investors' stock picks have
performed in various time periods. Over the short-term period of
the past six months, the Gurus whose new stocks have posted the
greatest market gains are
, with average returns of 47.67% and 46.5%, respectively.
Lampert is the founder of ESL Investments, a hedge fund, who has
taken to retail turnaround projects such as with Sears Holdings (
operates Chou Associates Management, a group of mutual funds
based in Canada with a thoroughly value-oriented perspective.
Both of the investors' stock portfolios are characterized by
relatively high concentration and low turnover.
Lampert has purchased six stocks in the past six months and has a
quarter-over-quarter turnover rate of 8%. He keeps only 11 stocks
in his portfolio, which has a total value of $3.84 billion and an
overwhelming 94.6% weighting in the consumer cyclical sector.
Lampert's best-performing new buy of the fourth quarter is
Safeway Inc. (
), of which he purchased 844,929 shares, a miniscule fraction of
his portfolio, for an average price of $17. The price has since
increased roughly 48% to $24.70 per share in Monday afternoon
trading, almost reaching its highest level in three years.
Lampert reportedly owned a significant portion of Safeway earlier
in the decade, but had since sold out.
With a market cap of $5.95 billion, Safeway is a North American
grocery store chain, with interest in a prepaid products and
payments services, and an online grocery channel. In the past
five years leading to year-end 2012, the company's market cap has
diminished by almost half, then had a dramatic 37% increase so
far in 2013.
Fourth quarter results helped boost the stock in February.
Safeway reported an increase in revenue to $13.77 billion from
$13.6 billion in the prior-year quarter. Net income increased to
$244 million, or $1.02 per diluted share, from $215.6 million, or
$0.67 per diluted share, in the prior-year quarter.
The company also increased its U.S. market share for the third
consecutive quarter, which has been driven by its digital
discount and fuel loyalty programs. Safeway's new discount
program is the first online and mobile shopping tool, offering
customized deals through an iPhone or Android app, based on
personal shopping history, obviating the need for coupons or
The company has It did not repurchase any shares in the fourth
quarter, but bought $1.24 billion worth of its shares for an
average cost of $21.51 per share in 2012. The transactions left
$0.8 billion under its authorization for further repurchases.
Safeway is a growing enterprise, with 14.9% average annual
revenue growth and 24.4% average annual EBITDA growth over the
past five years. It has also boosted its margins, with the fourth
quarter marking its fourth in a row of net margin expansion, to
Safeway's dividend yield at 2.7% is close to a one-year low. It
also has a P/E of 10, P/B of 2 and P/S of 0.14.
On Monday, Safeway filed an IPO offering for the spinoff of a
portion of its gift card business, Blackhawk Network, which could
raise $200 million.
Some of his other new holdings were Sears Hometown & Outlet
Stores Inc. (
), which has gained 24% from his average cost of $32 per share,
Big Lots (
), and Netflix Inc. (
), which gained 188.5% from his third quarter share price of $64
per share, but which he sold out of in the fourth quarter.
Francis Chou's four stock buys of the past six months have
returned 46.5% on average. One of the largest gainers is Research
In Motion (
), whose price has increased 109% from the average price of $7
per share at which he purchased 200,000 shares in the third
quarter. The purchase is less than 1% of his portfolio.
Chou has said, "You won't find bargains unless there is a stink
or cloud (financial or otherwise) overhanging the stock. We
carefully analyze the company and if our analysis indicates that
the stock price has more than fully discounted the problem, we
hold our nose and may purchase the stock." Research In Motion has
faced an onslaught of competition against its one-time
transformative BlackBerry smartphone, which dragged its five-year
stock price down more than 85% before Chou purchased it.
After years of growth, Research In Motion in the quarter ended
Dec. 1, 2012, reported 47% year-over-year shrinkage in revenue to
$2.7 billion, and an adjusted net loss of $114 million, or $0.22
per diluted share, which excluded the impact of pre-tax charges
for cost reduction actions, compared to a net gain of $265
million, or $0.51 per diluted share, a year previously.
However, the company increased its cash position in the quarter
to more than $2.9 billion and generated $950 million in cash flow
BlackBerry was expecting pressure on results as it set to launch
its new phone, the BlackBerry 10, which it did in 2013.
BlackBerry's CEO, Thorsten Heins, announced that Feb. 5 was the
best first day ever for sales of a BlackBerry smartphone, and 50%
better than any of its other launches in Canada. Its sales in the
UK were three times higher than its previous best performance for
a first week of smartphone sales.
BlackBerry 10 sales numbers have not been released yet, but the
company on March 14 announced that one of its partners had
ordered 1 million of the smartphones for immediate shipment - the
highest order in the company's history. Fourth quarter results
are scheduled to be announced on March 28.
BlackBerry as of Monday has a P/E of 6.8, P/B of 0.84 and P/S of
Fellow Canadian investor Prem Watsa who took a large stake in
BlackBerry and has been assisting in turning it around, commented
in his 2012 annual letter on March 11 on BlackBerry: "
At its low of approximately $6 1?2 per share, it sold at 1? 3
of book value per share and a little above cash per share (it has
no debt). The stock price had declined 95% from its high! The
company produces the BlackBerry which for years was synonymous
with the smart phone. The BlackBerry brand name is perhaps one of
the more recognizable brand names in the world and the company
has 79 million subscribers worldwide. Revenues went from
essentially zero to $20 billion in about 15 years - and then it
hit an air pocket! The company got complacent, perhaps
overconfident, and did not respond quickly enough to Apple and
Android. Mike Lazaridis, the founder and a technological genius -
and a good friend - asked me to join the Board, which I did after
meeting Thorsten Heins, whom Mike recommended as the next CEO of
" (Continue reading his comments here.)
Chou's other new buy, MBIA (
), climbed 33% from his average share price of $9 and Dell (
) increased 29% from his average price of $11 per share. He also
has 7.4% of his portfolio weighted in Edward Lampert's company,
Sears Holdings (
See Edward Lampert's portfolio here, or see Francis Chou's
portfolio here. See more of how Gurus are performing at the
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