Chris Davis (Trades, Portfolio), portfolio manager for Davis Financial Fund, favors stable businesses that are well managed and available at value prices when he seeks investment opportunities. His approach has been pretty successful at Davis Financial Fund, which has recorded returns of 13.01%, 31.45% and 18.15% in 2014, 2013 and 2012, respectively.
In the second quarter, Davis found more than a dozen prospects that met his criteria.
Davis bought 16 new stakes in the second quarter. His most significant acquisition was 23,925,872 shares of Cabot Oil & Gas Corp. (COG, Financial), an independent petroleum and natural gas exploration and production company based in Houston, for an average price of $33.31 per share. The purchase had a 2.65% impact on Davis’ portfolio and landed Cabot Oil & Gas in Davis’ top 15 most valuable stakes.
Cabot Oil & Gas has a market cap of $10.52 billion and an enterprise value of $12.5 billion. It has a Price/Book of 4.9 and a Price/Sales of 5.5. Davis’ purchase made him Cabot Oil & Gas’ leading shareholder among the gurus, but Pioneer Investments (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio), Jim Simons (Trades, Portfolio), Ray Dalio (Trades, Portfolio), Ron Baron (Trades, Portfolio), John Keeley (Trades, Portfolio), Dodge & Cox and T Boone Pickens (Trades, Portfolio) also have shares of Cabot Oil & Gas in their portfolios.
Cabot Oil & Gas’ stock price tumbled more than 3% on Wednesday, closing down $0.8 per share.
Davis bought a 2,011,431-share stake in Precision Castparts Corp. (PCP, Financial), a Portland, Ore., industrial goods and metal fabrication company, for an average price of $209.95 per share. The deal had a 1.41% impact on Davis’ portfolio.
Precision Castparts has a market cap of $31.74 bilion and an enterprise value of $35.99 billion. It has a P/E of 22.6, a Price/Book of 2.8 and a Price/Sales of 3.3. Warren Buffett (Trades, Portfolio), Ruane Cunniff (Trades, Portfolio), Jana Partners (Trades, Portfolio), Lou Simpson (Trades, Portfolio), Bill Nygren (Trades, Portfolio), Mario Gabelli (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Wallace Weitz (Trades, Portfolio), Westport Asset Management (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Steven Cohen (Trades, Portfolio), Scott Black (Trades, Portfolio), Tom Russo (Trades, Portfolio), Ron Baron (Trades, Portfolio), Jeff Auxier (Trades, Portfolio), Michael Price (Trades, Portfolio), George Soros (Trades, Portfolio), Jim Simons (Trades, Portfolio), Ray Dalio (Trades, Portfolio), Prem Watsa (Trades, Portfolio) and First Eagle Investment (Trades, Portfolio) have shares of Precision Castparts in their portfolios.
Davis purchased 1,254,619 shares of Advance Auto Parts Inc. (AAP, Financial), a Roanoke, Va.-based automotive replacement parts and accessories retailer, for an average price of $152.7 per share. The transaction had a 0.7% impact on Davis’ portfolio.
Advance Auto Parts has a market cap of $13.62 billion and an enterprise value of $15.1 billion. It has a P/E of 27.7, a Price/Book of 6.3 and a Price/Sales of 1.4. Davis is Advance Auto Parts’ leading shareholder among the gurus, but Steve Mandel (Trades, Portfolio), Manning & Napier Advisors, Inc, Private Capital (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Steven Cohen (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), John Keeley (Trades, Portfolio) and Chuck Royce (Trades, Portfolio) also have shares in the company.
Davis acquired 234,124 shares of Equity Residential (EQR, Financial), a Chicago-based real estate investment trust, for an average price of $74.26 per share. The transaction had a 0.06% impact on Davis’ portfolio.
Equity Residential has a market cap of $27.7 billion and an enterprise value of $38.82 billion. It has a P/E of 31.1, a Price/Book of 2.6 and a Price/Sales of 10.8. Jim Simons (Trades, Portfolio), Ken Heebner (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Manning & Napier Advisors, Inc, Jeremy Grantham (Trades, Portfolio), Murray Stahl (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) have shares of Equity Residential in their portfolios.
Davis acquired 207,149 shares of Ventas Inc. (VTR, Financial), a Chicago-based real estate investment trust (REIT), for an average price of $59.96. The purchase had a 0.05% impact on Davis’ portfolio.
Ventas has a market cap of $20.16 billion and an enterprise value of $31.7 billion. It has a P/E of 39.1, a Price/Book of 1.8 and a Price/Sales of 5.7. Jim Simons (Trades, Portfolio), Manning & Napier Advisors, Inc, Pioneer Investments (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio) and Ray Dalio (Trades, Portfolio) have shares of Ventas in their portfolios.
Davis also bought a 196,478-share stake in Health Care REIT, Inc. (HCN, Financial), a Toledo, Ohio-based real estate investment trust, for an average price of $71.79 per share. The deal had a 0.05% impact on Davis’ portfolio.
Health Care REIT has a market cap of $24.46 billion and an enterprise value of $37.15 billion. It has a P/E of 28.2, a Price/Book of 1.8 and a Price/Sales of 6.5. Jim Simons (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Manning & Napier Advisors, Inc, Jeremy Grantham (Trades, Portfolio) and Ray Dalio (Trades, Portfolio) have shares of Health Care REIT in their portfolios.
Other new buys in Davis’ portfolio include American Tower Corp. (AMT, Financial), Macerich Co. (MAC, Financial), Univar Inc. (UNVR, Financial), Baidu Inc. (BIDU, Financial), Party City Holdco Inc. (PRTY, Financial), United Technologies Corp. (UTX, Financial), InterXion Holding NV (INXN), Allergan PLC (AGN), Progressive Corp. (PGR) and W.W. Grainger Inc. (GWW).
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