A generic image of a pair of glasses on top of a calculator
Markets

Mairs and Power Sells Baxalta, Walt Disney, Target

Mairs & Power is an investment firm whose strength and success has resulted from applying a conservative growth investment approach consistently for over 70 years. The following are its largest sales during the third quarter.

The fund reduced its stake in Hormel Foods Corp. ( HRL ) by 11.50% with an impact of 0.28% on the portfolio. The holding is 2.74% of the total assets.

Hormel Foods is engaged in the production of a variety of meat and food products. During the last quarter, refrigerated foods segment operating profit was up by 9%, but sales for the quarter were down 4% from the same period in fiscal 2014.

The stock looks undervalued at the current price of $78. The DCF calculator gives a fair value of $38.96 estimating the stock is overvalued by 100%. GuruFocus gives Hormel Foods a profitability and growth rating of 8 out of 10 with strong returns, ROE 17.95%, ROA 11.88% that are outperforming 82% of the other companies in the Global Packaged Foods industry. Financial strength has a rating of 6 out of 10, with a cash to debt of 0.58 that is slightly above the industry median of 0.45.

Mairs and Power ( Trades , Portfolio ) is largest shareholder of the company, followed by Jeremy Grantham (Trades, Portfolio), who holds 0.08% of outstanding shares of the company, Pioneer Investments (Trades, Portfolio) with 0.05% and Tom Russo (Trades, Portfolio) with 0.04%.

The fund also reduced its stake in Baxalta Inc. ( BXLT ) by 18.20% with an impact of 0.23% on the portfolio. The holding is 0.94% of the total assets.

The company is global biopharmaceutical leader developing, manufacturing and commercializing therapies for orphan diseases and underserved conditions in hematology, oncology and immunology. During the last quarter it reported 8% growth for its worldwide revenues, and sales advanced 13%, exceeding the company's previously-issued guidance of growth in the 8% to 10% range.

The stock looks undervalued at the current price of $37. The DCF calculator gives a fair value of $8.88 estimating the stock is overvalued by 318%. GuruFocus gives Baxalta a low profitability and growth rating of 2 out of 10. Still, the company has strong returns with ROE 31.37% and ROA 15.84% that are outperforming 95% of the companies in the Global Biotechnology industry. Financial strength has a rating of 5 out of 10, with a cash to debt of 0.25 that is far below the industry median of 28.98.

Richard Pzena (Trades, Portfolio) is largest shareholder of the company among the gurus with 0.6% of outstanding shares, followed by Tweedy Browne (Trades, Portfolio) with 0.37%, First Eagle Investment (Trades, Portfolio) with 0.31% and Diamond Hill Capital (Trades, Portfolio) with 0.31%.

Mairs and Power also reduced its stake in Walt Disney Co. ( DIS ) by 15.15% with an impact of 0.23% on the portfolio. The holding is 1.27% of the total assets.

The company, together with its subsidiaries, is a diversified entertainment company with operations in five business segments: Media Networks, Parks and Resorts, Studio Entertainment, Consumer Products and Interactive Media.

The stock looks overvalued at the current price of $112. The DCF calculator gives a fair value of $86.77, estimating the stock is overvalued by 29%. GuruFocus gives Walt Disney a profitability and growth rating of 9 out of 10 with strong returns (ROE 18.53%, ROA 9.69%) that are outperforming 82% of the companies in the Global Media - Diversified industry. Financial strength has a rating of 6 out of 10, with a cash to debt of 0.25 that is below the industry median of 1.19.

Ken Fisher (Trades, Portfolio) is the largest shareholder among the gurus with 0.51% of outstanding shares, followed by PRIMECAP Management (Trades, Portfolio) with 0.42%, Pioneer Investments (Trades, Portfolio) with 0.21% and Diamond Hill Capital (Trades, Portfolio) with 0.13%.

Mairs and Power reduced its stake in Fiserv Inc. ( FISV ) by 12.89% with an impact of 0.22% on the portfolio. The stake is 1.71% of the total assets.

The company and its subsidiaries provide integrated information management and electronic commerce systems and services, including transaction processing, electronic bill payment and presentment, business process outsourcing, document distribution services and software and systems solutions. In the last quarter, internal revenue had growth of 5% and adjusted EPS grew by 20% compared to the third quarter of 2014.

The stock looks overpriced at the current price of $94. The DCF calculator gives a fair value of $45.81, estimating the stock is undervalued by 105%. GuruFocus gives Fiserv a profitability and growth rating of 8 out of 10; the company has strong returns like ROE 22.02%, ROA 7.48% that are outperforming 72% of the companies in the Global Business Services industry. Financial strength has a rating of 8 out of 10, with a cash to debt of 0.07 that is far below the industry median of 1.29.

Mairs and Power (Trades, Portfolio) is the largest guru shareholder followed by Pioneer Investments (Trades, Portfolio), which holds 0.4% of outstanding shares, John Burbank (Trades, Portfolio) with 0.01% and Louis Moore Bacon (Trades, Portfolio) with 0.01%.

Mairs & Power reduced its stake in Target Corp. ( TGT ) by 5.95% with an impact of 0.18% on the portfolio. The holding is 3.09% of the total assets.

The company sells general merchandise and food. Its general merchandise and CityTarget stores offer an edited food assortment, including perishables, dry grocery, dairy and frozen items, while its SuperTarget stores offers a full line of food items comparable to traditional supermarkets.

The stock looks overvalued at the current price of $72.98. The DCF calculator gives a fair value of $51.96, estimating the stock is overvalued by 40%. GuruFocus gives Target a profitability and growth rating of 7 out of 10 with negative returns, ROE -4.90%, ROA -1.67% that are underperforming 88% of the companies in the Global Discount Stores industry. Financial strength has a rating of 6 out of 10, with a cash to debt of 0.16 that is slightly below the industry median of 0.52.

James Barrow (Trades, Portfolio) is the largest shareholder among the gurus with 2.27% of outstanding shares, followed by Dodge & Cox with 2%, and HOTCHKIS & WILEY with 0.49%.

The fund also reduced its stake in Bio-Techne Corp. ( TECH ) by 6.04% with an impact of 0.12% on the portfolio. The holding is 1.87% of the total assets.

The company and its subsidiaries develops, manufactures and sells biotechnology reagents, instruments and clinical diagnostic products. The company reported 19% growth for revenue while driven by negative currency translation, adjusted earnings declined by 8% from the same quarter of a year before.

The stock looks overvalued at the current price of $89.01. The DCF calculator gives a fair value of $32.2 estimating the stock is overvalued by 176%. GuruFocus gives Bio-Techne a profitability and growth rating of 7 out of 10 with strong returns (ROE 12.93%, ROA 9.80%) that are outperforming 87% of the companies in the Global Biotechnology industry. Financial strength has a rating of 8 out of 10, with a cash to debt of 0.52 that is far below the industry median of 28.98

Ron Baron (Trades, Portfolio) is largest shareholder among the gurus with 3.77% of outstanding shares, followed by Mairs and Power (Trades, Portfolio) then Columbia Wanger (Trades, Portfolio) with 3.4% and Chuck Royce (Trades, Portfolio) with 2.2%.

The fund reduced its stake in MDU Resources Group Inc. (MDU) by 15.54% with an impact of 0.11% on the portfolio. The holding is 0.58% of the total assets.

The company operates as a diversified natural resource company in the U.S. The company generates, transmits, and distributes electricity and natural gas.

GuruFocus gives MDU Resources Group a profitability and growth rating of 6 out of 10 with negative returns (ROE -21.21%, ROA -7.94%) that are underperforming 94% of the companies in the Global Building Materials industry. Financial strength has a rating of 6 out of 10, with a cash to debt of 0.04 that is far below the industry median of 0.38.

Mairs and Power (Trades, Portfolio) is largest shareholder of the company, followed by John Keeley (Trades, Portfolio) with 0.13% and Louis Moore Bacon (Trades, Portfolio) with 0.08%.

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 .

This article first appeared on GuruFocus .

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


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

In This Story

TGT TECH FISV DIS

Other Topics

Stocks

Latest Markets Videos