Like many prominent money management firms reporting their
Westport Asset Management
engaged in limited purchasing in the fourth quarter. It bought
two new stocks: Copart Inc. (
) and Core Laboratories N.V. (
Led by principles Andrew J. Knuth and Edmund H. Nicklin Jr.,
Westport combines classic value investing with forward-looking
business analysis. It focuses on companies with potential for
increased capital appreciation that will affect their stock
price, particularly those temporarily out of favor with Wall
fourth quarter letter
, it commented on the investing environment heading into 2013:
With the arrival of 2013 investors continue to face
uncertainties in the form of Congressional battles over the
federal budget, Europe's debt crisis, and slowing corporate
earnings. However, with the recovery in the housing and auto
industries coupled with the rapidly expanding domestic energy
exploration and production, the U.S. economy appears to have the
potential to grow above 2.0% in 2013.
New Buy: Copart Inc. (
Copart sells vehicles through its two-stage Internet sales
technology, for cosignors such as finance companies and banks,
for the public and for auto dealers, with more than 50,000
vehicles up for auction daily. Westport purchased 170,100 shares
of this company for $29 per share on average in the fourth
quarter, giving it a 0.53% weighting in its portfolio.
Since Westport's purchase, the company's market value has
increased approximately 26%. Trading for $36.66 per share on
midday Wednesday, it has a $4.57 billion market cap.
The price surged on news reported by Bloomberg that hedge fund
Jana Partners bought Copart shares in a bet that the company
would become a real estate investment trust (REIT), under which
it would not have to pay federal income taxes but would be
required to return at least 90% of taxable earnings as dividends
"We see an attractive asset trading at a reasonable price with
the potential for significant value to be unlocked were CPRT to
convert to a REIT," Jana said in the letter obtained by
Bloomberg. "Our research suggests that the vast majority of
CPRT's earnings can be classified as qualifying real estate
In fiscal year 2012, Copart earned $182 million in net come on
$924 million in revenue, along with $146 million in free cash
flow. Revenue, EBITDA and free cash flow have been growing at the
average annual rates of 12.8%, 13% and 29.7%, respectively, over
the past five years, according to its
The company is also pursuing growth through a variety of other
means, including acquisitions. In November, it acquired Central
de Leil�es Ltda. located in Brazil, WOM Wreck Online
Marketing Aktiengesellschaft, an auction platform in Germany, and
four parcels of land located in Estrada Muranaka, a municipality
of Itaquaquecetuba, S�o Paulo State, Brazil.
Copart currently has a P/E of 24.6, P/B of 7.4 and P/S of 5.1.
New Buy: Core Laboratories N.V. (
Westport funds commented in its fourth quarter letter about this
company: "Finally, a new position was established in Core
Laboratories N.V., a unique oil service company that provides
reservoir management services and production enhancement when it
experienced an earnings shortfall relative to expectations for
third quarter results. The company's capabilities in reserve
modeling are highly valued in the shale areas of the U.S."
Core Laboratories' stock price also jumped recently, with its
market value gaining more than 25% in the last three months.
Trading for $129.50 per share in midday, the company has a market
cap of $6.04 billion.
Westport purchased 40,000 shares of Core Laboratories for $104
per share on average in the fourth quarter.
A robust fourth quarter earnings report fueled the company's
January stock gain. It posted its the most profitable quarter in
its history, with a year-over-year net income increase to $54.8
million, and 7% earnings per share increase to $1.17. Revenue
increased to a quarterly record of $254.46 million.
The improvements were driven by international crude-oil
developments, particularly deepwater unconventional oil plays in
North America and high-grading international unconventional
plays. International revenue increased 13%, leading the industry.
The results came after Core Laboratories significantly raised its
expectations for the fourth quarter on Oct. 17. Actual revenue
for the quarter topped its estimate, while earnings per share
came in at the top of the updated expected range.
Read more about Core Laboratories' history in its
10-year financials page
For 2013, Core Laboratories is expecting robust Brent crude
pricing and delivery of more deepwater drilling rigs that will
enable it to further its existing work, branch out into new
projects and offer new technologies and services related to
deepwater fields and liquids-related unconventional reservoir
The company has a P/E of 28.8, P/B of 27 and P/S of 6.5.
Westport Funds made increases to four other holdings during the
quarter, which were Nordson Corp. (
), Abbott Laboratories (
), Air Products & Chemicals international Inc. (
) and Charles River Laboratories International Inc.
Read more about the investing activities at Westport Funds in its
portfolio here. Also check out the Undervalued Stocks, Top Growth
Companies and High Yield stocks of Westport Asset
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