Westport Sells Its Stake in PetSmart in First Quarter

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May 20, 2015
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Westport Asset Management (Trades, Portfolio)’s investing philosophy has been described on this website as “a modified form of bottom-up value investing that combines classic value investment with forward-looking business analysis.”

Westport’s approach produced an 8.62% return in 2014, a 28.54% return in 2013 and a 12.26% return in 2012.

The greatest impact to Westport’s portfolio in the first quarter was its divestiture of PetSmart Inc (PETM, Financial), a retail chain specializing in pet supplies and services. Westport sold its 120,000-share stake in PetSmart for an average price of $82.17 per share, nearly 21% higher than the average price Westport paid per share in the first quarter of 2013.

The sale had a -1% impact on Westport’s portfolio.

PetSmart, which was founded in Phoenix, Arizona, in 1986, has a market cap of $8.25 billion and an enterprise value of $8.53 billion. It has a P/E of 19.7, a Price/Book of 6.1 and a Price/Sales of 1.2. Joel Greenblatt (Trades, Portfolio), Mario Gabelli (Trades, Portfolio), Mario Cibelli (Trades, Portfolio) and John Paulson (Trades, Portfolio) also sold their stakes in PetSmart in the first quarter. Meridian Funds (Trades, Portfolio) has shares of PetSmart in its portfolio.

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Westport also sold its stakes in Brown & Brown Inc (BRO, Financial) and Trimble Navigation Ltd (TRMB, Financial).

Westport reduced its holdings in eight companies in the first quarter – W W Grainger Inc (GWW, Financial), MSC Industrial Direct Co Inc (MSM, Financial), Checkpoint Systems Inc (CKP, Financial), Banner Corp (BANR, Financial), Universal Health Services Inc (UHS, Financial), IPG Photonics Corp (IPGP, Financial), Synopsys Inc (SNPS, Financial) and Arthur J Gallagher & Co (AJG, Financial).

Synopsys is the largest stake by volume in Westport’s portfolio.

The sale of 25,500 shares of W W Grainger, a Lake Forest, Illinois-based industrial supply distributor, for an average price of $238.52 per share had the greatest impact on Westport’s portfolio – -0.66%.

W W Grainger has a market cap of $16.48 billion and an enterprise value of $16.94 billion. It has a P/E of 21.4, a Price/Book of 5.3 and a Price/Sales of 1.7. First Eagle Investment, Joel Greenblatt (Trades, Portfolio) and Meridian Funds (Trades, Portfolio) have shares of W W Grainger in their portfolios.

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Buys and additions

Westport invested in one new buy in the first quarter – 16,000 shares of Mohawk Industries Inc (MHK). Westport paid an average price of $173.03 per share for its stake in Mohawk, a Georgia-based flooring manufacturer. The transaction had a 0.31% impact on Westport’s portfolio.

Mohawk has a market cap of $13.81 billion and an enterprise value of $16.12 billion. It has a P/E of 29.4, a Price/Book of 3.3 and a Price/Sales of 1.8. Ruane Cunniff (Trades, Portfolio), Steve Mandel (Trades, Portfolio), Meridian Funds (Trades, Portfolio), Ron Baron (Trades, Portfolio) and Joel Greenblatt (Trades, Portfolio) also have shares of Mohawk in their portfolios.

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Westport added to its existing stakes in two companies – Express, Inc. (EXPR) and Bed Bath & Beyond Inc (BBBY).

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