The Hussman Funds are a group of funds run by
, a value investor who writes a widely read weekly market
commentary. The average total return for the funds since
inception in 2000 is 5.37%.
Hussman's portfolio contains 206 stocks. In the second quarter,
he bought 14 new stocks, with relatively small positions in each.
The biggest new buys were Target (
), Coinstar (
), Baxter International (
) and CF Industries Holdings (
bought 1,500,600 shares of
Target Corp. (
at an average price of $57 per share in the second quarter of
2012. Target is the retail corporation with 1,764 stores in the
U.S. and which will open its first stores in Canada in 2013.
Target has been growing its revenue and EBITDA per share at an
annual rate of 9.3% and 9.1% annually over the last 10 years. The
company increased sales for most of the years in the last decade,
save for a brief lag from 2004 to 2005. In 2012 it recorded
record sales of $69.9 billion.
In its fiscal first quarter 2012, Target repurchased
approximately 10.5 million shares for a total of $604 million and
paid dividends of $201 million. In March it completed its $10
billion share repurchase program it began in 2007, for a total
repurchase of 193.5 million shares, or nearly 23% of shares
outstanding in November 2007. Its average purchase price was
$51.68 per share. Its new plan, authorized in January 2012, is to
repurchase $5 billion in shares in the next two to three years.
Target and Nieman Marcus have announced that they will partner to
sell an array of holiday items by 24 top designers. "These will
be the 'must-have' gifts, whether you are a loyal Neiman Marcus
customer, a devoted Target guest or a fan of American design,"
Neiman Marcus CEO Karen Katz said in a statement.
bought 500,000 shares of Coinstar at an average price of $63 in
the second quarter. Coinstar is the owner of RedBox DVD and video
game rental and Coinstar self-service coin-counting kiosks.
Coinstar has been growing at a rapid pace while its PE ratio has
remained low at 10.6. The company produced a revenue per share
growth rate of 26% and EBITDA per share growth of 18.4% over the
last 10 years, growing revenue from $156 million in 2002 to $1.9
billion in 2011. The company's net margins have also expanded
significantly in recent years, from negative 4.1% in 2007 to 5.6%
In the second quarter, Coinstar expanded its Redbox kiosks into
Canada and launched its Rubi coffee kiosks in partnership with
Seattle's best Coffee, along with several other growth
initiative. The company also purchased the assets of NCR Corp. (
)'s self-service entertainment DVD kiosk business, including its
DVD kiosks, DVD inventory, intellectual property and certain
retailer contracts. The acquisition will result in temporary
losses while it replaces the old kiosks with Redbox kiosks, and
will become accretive sometime in 2013.
Baxter International (
Hussman bought 501,000 shares of Baxter International at an
average price of $54 in the second quarter 2012. He had closed
out a smaller position in the first quarter of 2012 when the
price was higher, at $56 on average. Baxter International is a
global healthcare company focused on products that assist people
with hemophilia, immune disorders, infectious diseases, kidney
disease, trauma, and other medical conditions. Its stock price
has gone up 19% year to date.
Baxter International has been a steadily growing company, with
revenue increasing each year for the last decade and EBITDA per
share growing at a 6.4% annual rate over the same period. It also
produces consistent free cash flow.
Second-quarter results showed a 7% rise in earnings from the
previous year and 1% on an adjusted basis, to $619 million from
Baxter also affirmed its full-year 2012 guidance of sales growth
of 5 to 6% excluding the impact of foreign exchange. Earnings per
share are expected to be in the range of $4.50 to $4.56 per
share, and cash flows from operations to exceed $3 billion. Last
year's earnings per share were $3.91 per share.
CF Industries Holdings (
Hussman bought 100,000 shares of CF Industries at an average
price of $178 in the second quarter of 2012. It accounts for just
0.36% of his portfolio. CF Industries is a large fertilizer
manufacturer and distributor. The company's stock is up 266% over
the last five years and about 39% year to date.
CF Industries has been characterized by rapid growth. In the last
five years its revenue per share growth rate has been 15.3%, and
EBITDA per share has been 52.7%. The company still has a P/E
ratio of 7.9. It also has $2.2 billion in cash on its balance
sheet and $3 billion in debt.
The company's first quarter showed more of the same. It had
record first quarter net earnings of $368 million, compared to
$282 million in the prior-year quarter. Record first quarter net
sales were $1.5 billion, a 30% increase from $1.2 billion in the
prior year quarter. The company's results were helped by an
exceptionally mild winter and early spring weather that created
field conditions, placing nutrient application ahead of normal
schedules, and increasing the demand for ammonia and urea.
The results were also favorably impacted by an increase in
nitrogen prices, and a 37% increase in nitrogen net sales.
Natural gas price declines are another favorable condition for
the company's production of nitrogen products as the hydrogen and
ammonia in it come from natural gas.
See the rest of
's portfolio here. Also check out the Undervalued Stocks, Top
Growth Companies and High Yield stocks of John Hussman.About
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