Wallace Weitz's 3 New Q2 Buys

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Wallace Weitz 's Weitz Investments oversees $4 billion for clients and has had an excellent year so far. Its value fund returned 17.9% in the first half, outpacing the S&P 500's 13.8%. While extended QE pumped up the markets further in the second quarter, Weitz hesitated to call a short-term market direction in his second quarter letter. As a result, he avoids taking any extreme positions in his portfolios but held ample cash at quarter-end after it sold shares of companies whose share priced approached his estimates of fair value. "But we still own a group of companies that we believe have excellent long-term prospects," Weitz said in his letter.

When stocks do get cheap again, he added, "we will follow Warren Buffett 's advice: 'When it's raining gold, go out with a bucket, not a thimble.'"

In the second quarter, he established three new, relatively small positions: World Fuel Services Corporation ( INT ), ProShares Short 20+ Year Treasury ETF ( TBF ) and ACI Worldwide Inc. ( ACIW ).

World Fuel Services Corporation ( INT )

Weitz purchased 230,000 shares of World Fuel Services Corp. at $40 per share on average. Down 4% since, the stock is $38.03 Friday.



World Fuel Services Corporation was incorporated in Florida in July 1984. World Fuel Services Corporation has a market cap of $2.75 billion; its shares were traded at around $37.81 with a P/E ratio of 14.00 and P/S ratio of 0.10. The dividend yield of World Fuel Services Corporation stocks is 0.40%. World Fuel Services Corporation had an annual average earnings growth of 23.3% over the past 10 years. GuruFocus rated World Fuel Services Corporation the business predictability rank of 4-star .

World Fuel Services Corp. long-term revenue and earnings history:



The Peter Lynch chart suggests it is undervalued:



ProShares Short 20+ Year Treasury ETF ( TBF )

Weitz purchased 150,000 shares of ProShares Short 20+ Year Treasury ETF at $29 per share on average. The holding represents 0.19% of the portfolio. Having increased 9%, the stock is $32.10 Friday. Weitz has owned shares of the ETF previously:



The ProShares Short ETF says that it "invests in derivatives that ProShare Advisors believes, in combination, will have similar daily return characteristics as the inverse (-1x) of the daily return of the Index. The Index includes all publicly issued, U.S. Treasury securities that have a remaining maturity greater than 20 years, are non-convertible, are denominated in U.S. dollars, are rated investment grade (at least Baa3 by Moody's Investors Service Inc. or BBB- by Standard and Poor's Financial Services, LLC), and have more than $250 million par outstanding."

The ProShares Short ETF price history:



ACI Worldwide Inc. ( ACIW )

Weitz purchased 7,000 shares of ACI Worldwide Inc. for $46 per share on average, establishing a 0.013% position. Having dropped 7%, the stock is $48.50 Friday. He also traded this stock previously:



ACI Worldwide Inc. was formed as a Delaware corporation in November 1993 under the name ACI Holding Inc. ACI Worldwide Inc. has a market cap of $1.94 billion; its shares were traded at around $48.85 with a P/E ratio of 40.90 and P/S ratio of 2.80. ACI Worldwide Inc. had an annual average earnings growth of 7.1% over the past 10 years.

ACI Worldwide's revenue and earnings history:



The Peter Lynch chart indicates the stock is overvalued:



See Wallace Weitz's portfolio here. Also check out the Undervalued Stocks, Top Growth Companies and High Yield stocks of Wallace Weitz.About GuruFocus: GuruFocus.com tracks the stocks picks and portfolio holdings of the world's best investors. This value investing site offers stock screeners and valuation tools. And publishes daily articles tracking the latest moves of the world's best investors. GuruFocus also provides promising stock ideas in 3 monthly newsletters sent to Premium Members .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: ACIW , INT , TBF

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