, manager of the Olstein Funds, bought eight new stocks in the
fourth quarter for his Olstein All-Cap Value Fund, the largest
positions of which are: Ross Stores (
), Charles River Laboratories International (
) and Vishay Intertechnology (
Olstein's investing philosophy prioritizes downside risk
avoidance, and also focuses on companies with temporary problems
creating a disjoint between their market price and business
value, excess cash flow, and strategy success, quality earnings
and sustainable performance brought to light through "forensic
analysis of financial statements."
Overall, the Olstein All-Cap Value Fund has 103 stocks, a total
value of $508 million, a 23.4% weighting in its most-represented
sector technology, and an 8% quarter-over-quarter turnover.
Ross Stores (
Up 15.9% over the last 12 months to $60.28 per share on Tuesday
morning, Ross Stores' share price toppled to within several
dollars of its 52-week low in the fourth quarter, when Olstein
made his purchase. Olstein bought 87,000 shares of the company
for $58 per share on average.
It was a temporary dip after a years-long run-up, as demonstrated
in the chart below:
Ross Stores, a Fortune 500 company, operates the nation's largest
off-price apparel and home fashion chain, with 1,097 locations in
33 states, the District of Columbia, and Guam.
In the company's third quarter, net earnings grew 11% to $159.5
million, from $144 million the previous year. Sales increased 11%
to $2.26 billion, with comparable store sales increasing 6%,
outpacing the prior year's 5% gain.
The company's vice chairman and COE, Michael Balmuth, attributed
the solid quarter to the company's strategy of offering
name-brand bargains and operating with lower inventories while
controlling expenses, which has been leading to expanded profit
Ross Stores has a P/E of 18.09, P/B of 7.83 and P/S of 1.46.
Charles River Laboratories International (
Olstein bought 123,000 shares of Charles River Laboratories for
$39 per share on average in the fourth quarter. Its shares are up
21% over the past 12 months and trade for $40.99 per share
CRL's business is to help companies accelerate the discovery,
development and manufacture of new drugs and therapies.
Over the past five years, its revenue increased at a rate of
3.1%, while free cash flow grew at the robust rate of 35.5%.
In its third quarter statements which included increased revenue
and earnings quarter over quarter, the company said it is
strategizing how to help clients in a "pivotal" moment when drug
companies are reinventing their business models, continue
acquisitions and partnerships, and take market share in a tightly
Vishay Intertechnology (
Olstein bought 356,000 shares for $9 per share on average. The
company's stock had been on a mostly downward trend since late
2010 and was near its lowest level in roughly a year when Olstein
purchased in the fourth quarter. Olstein's new investment has
gained 19% year to date and trades for $12.65 on Tuesday.
Vishay Intertechnology is a semiconductor and passive components
company with a $1.81 billion market cap.
Its revenue in the past five years grew at a rate of 1%, as free
cash flow increased at 27.4%. The past 12 months saw a steep
decline in its results: Revenue declined 11%, EBITDA 35.2% and
free cash flow 64.2%. Book value at the same time increased 8.3%.
It also saw declines in results in the fourth quarter of 2012
compared to the fourth quarter of 2011. Revenue was $530.6
million, compared to $551.4 million, and net earnings were $21
million, or $0.14 per diluted share, compared to $31 million, or
$0.19 per diluted share.
The results were the lowest quarter of the company's year as the
world economy fluctuated, although the company produced $287
million in free cash flow in 2011, its 11
consecutive year of cash flow over $200 million. It also invested
$150 million in capital expenditures to expand its business.
See Olstein's portfolio here. Also check out the Undervalued
Stocks, Top Growth Companies, and High Yield stocks of Robert
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