5 actions Daniel Loeb and David Rolfe agree on

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Summary

  • Three tech companies are owned by the two gurus.
  • Common assets also include Visa

    V
    and S&P Global.

While billionaire gurus Daniel loeb (Trades, Wallet), Head of Third Point, and David rolfe (Trades, Wallet), at the head of Wedgewood Partners, adopt different investment approaches, they still have several portfolios in common.

Using an event-driven, value-driven approach to stock picking, New York-based Loeb is known for taking activist positions in underperforming companies with a catalyst that will help unleash shareholder value.

In contrast, St. Louis-based Rolfe’s approaches potential investments with the mindset of a business owner, hoping to generate significant long-term wealth by analyzing a handful of businesses under. -valued that have a dominant product or service, consistent profits, income and dividends. growth, are highly profitable and have strong management teams.

According to GuruFocus Aggregate portfolio, a Premium feature, the two gurus both have positions in Microsoft Corp

MSFT
. (MSFT, Financial), Facebook Inc.

FB
(FB, Financial), Visa Inc. (V, Financial), S&P Global Inc. (SPGI, Financial) and alphabet

GOOGL
Inc. (GOOGL, Financial) at the end of the second trimester.

Microsoft

While Loeb left his stake in Microsoft (MSFT, Financial) unchanged during the three months ended June 30 at 1.6 million shares, Rolfe reduced its position by 5.28% to 133,336 shares. They have a combined equity portfolio weighting of 7.77% in the stock.

The Redmond, Washington-based software company, known for its Windows operating system and Microsoft Office products, has a market capitalization of $ 2.22 trillion; its shares were trading at around $ 295.26 on Monday with a price-to-earnings ratio of 36.69, a price-to-book ratio of 15.64 and a price-to-sell ratio of 13.37.

The GF value line

VALUE
suggests that the stock is significantly overvalued based on its historical ratios, past performance and future earnings projections.

GuruFocus rated Microsoft’s financial strength at 6 out of 10, thanks to a comfortable level of interest coverage as well as a high Altman Z-Score of 8.85, indicating that the company is in good standing even though the assets are s ‘accumulate at a faster rate than income. growth. Return on invested capital also dwarfs the weighted average cost of capital, suggesting good value creation as the business grows.

The company’s profitability fared even better, scoring a 9 out of 10 thanks to an expanding operating margin, strong returns on equity, assets and capital that outperform the majority of its competitors and a high Piotroski F-Score of 8 out of 9, indicating that trading conditions are sound. Thanks to consistent profit and revenue growth, Microsoft also has a predictability rank of 2.5 out of five stars. According to GuruFocus, companies with this rank are earning an average of 7.3% per year over a 10-year period.

GuruFocus estimates that Loeb gained 20.82% on the investment, which he has held since Q3 2020. Rolfe has generated a return of 51.21% since establishing the position in Q1 2020.

Other gurus with large positions in the stock include Ken fisher (Trades, Wallet), Pioneer Investments, PRIMECAP management (Trades, Wallet), Chase coleman (Trades, Wallet), Dodge & Cox, Spiros Segalas (Trades, Wallet), Baillie Gifford (Trades, Wallet), Steve mandel (Trades, Wallet), Andreas Halvorsen (Trades, Wallet) and Jeremy grantham (Trades, Wallet).

Facebook

Loeb quit his Facebook holding company (FB, Financial) unchanged in the second quarter with 1 million shares. Rolfe, on the other hand, reduced its holding of 148,764 shares by 5.94%. The stock has a combined weight of 9.45% in their equity portfolios.

The social media giant, headquartered in Menlo Park, Calif., Has a market cap of $ 990.25 billion; its shares were trading at around $ 351.72 on Monday with a price-to-earnings ratio of 26.06, a price-to-book ratio of 7.2 and a price-to-sell ratio of 9.7.

According to the GF Value Line, the stock is currently valued at its fair value.

Facebook’s financial strength was rated 7 out of 10 by GuruFocus, thanks to a comfortable level of interest coverage and a strong Altman Z-Score of 21.09. The company’s ROIC also eclipses its WACC, suggesting it creates value as it grows.

The profitability of the company is faring even better with a perfect score of 10 out of 10. Despite recording a decline in its operating margin, Facebook is supported by strong returns that exceed the majority of its peers sector, a high Piotroski F-Score of 7 and steady growth in earnings and revenues. It also has a five-star predictability rating. GuruFocus claims that companies with this rank are reporting an average of 12.1% per year.

GuruFocus data shows Loeb has gained around 33.46% on the investment so far. Rolfe gained around 23.25% on the investment over its lifetime.

Baillie Gifford (Trades, Wallet) is the company’s largest guru shareholder with a 0.28% stake. Frank sands (Trades, Wallet), Segalas, Pioneer, Coleman, Mandel, Fisher, Dodge & Cox and several other gurus also have significant positions in the stock.

Visa

Rolfe reduced his Visa to 140,546 shares (V, Financial) holding 4.31% in the second quarter, while Loeb left its position unchanged at 1.5 million shares. The stock has a combined equity portfolio weighting of 6.81%.

The San Francisco-based company, which facilitates electronic payments and provides credit card services, has a market capitalization of $ 503.89 billion; its shares were trading at around $ 229.34 on Monday with a price-to-earnings ratio of 46.4, a price-to-book ratio of 14.54 and a price-to-sell ratio of 22.88.

Based on the GF value line, the stock currently appears to be slightly overvalued.

GuruFocus has rated Visa’s financial strength as 6 out of 10. In addition to sufficient interest coverage, the Altman Z-Score of 8.14 indicates that it is currently in good standing. ROIC also exceeds WACC, so value is created.

The company’s profitability fared better, scoring a 9 out of 10 thanks to expanding operating margin and strong returns that outperform the majority of its competitors. Although Visa has seen a slowdown in per-share revenue growth over the past 12 months, it still has a five-star predictability rating.

According to GuruFocus, Loeb has gained around 33.65% on the investment since its inception in Q2 2018. Rolfe has gained around 123.95% on the long-standing investment.

Global S&P

Loeb left his 1 million S&P Global shares (SPGI, Financial) its holding unchanged during the second quarter, while Rolfe reduced its holding of 41,555 shares by 5.12%. The Gurus have a combined portfolio weight of 4.87% in the stock.

The New York-based company, which provides financial analysis and ratings, has a market capitalization of $ 106.42 billion; its shares were trading at around $ 442.44 on Monday with a price-to-earnings ratio of 43.38, a price-to-book ratio of 84.08 and a price-to-sell ratio of 13.63.

The GF value line suggests that the stock is currently slightly overvalued.

S&P Global’s financial strength has been rated 5 out of 10 by GuruFocus. In addition to sufficient interest coverage, the company is backed by a strong Altman Z-Score of 8.71. ROIC is also significantly higher than WACC, indicating good value creation.

The company’s profitability was rated 8 out of 10, driven by an expanding operating margin, strong returns that outperform the majority of its industry peers, and a high Piotroski F-Score of 8. The Predictability Ranking one star from S&P Global is however under scrutiny. GuruFocus data shows that companies in this rank are reporting an average of 1.1% per year.

Loeb has gained around 91.14% on his investment since Q2 2016. GuruFocus data shows Rolfe has gained around 40.7% since establishing his position in Q4 2019.

Alphabet

During the quarter, the two gurus reduced their holdings of Alphabet (GOOGL, Financial) Class A shares. Loeb now owns 200,000 shares while Rolfe owns 22,316, which represents a combined portfolio weighting of 10.76%.

The Mountain View, California-based tech giant which is Google’s parent company

GOOG
and YouTube, has a market capitalization of $ 1.89 trillion; its Class A shares were trading at around $ 2,829.29 on Monday with a price-to-earnings ratio of 30.64, a price-to-book ratio of 7.93 and a price-to-sell ratio of 8.76.

According to the GF Value Line, the stock currently appears to be significantly overvalued.

GuruFocus rated Alphabet’s financial strength at 8 out of 10. In addition to comfortable interest coverage, the company is backed by a strong Altman Z-score of 14.22. ROIC also eclipses WACC, indicating good value creation.

The company’s profitability was rated 9 out of 10. Even though the operating margin is declining, Alphabet is supported by strong returns that outperform the majority of its competitors as well as a high Piotroski F-Score of 7. Driven by steady profit and revenue growth, the company also boasts five-star predictability. rank.

Since establishing the position in Q4 2020, GuruFocus estimates that Loeb has gained 25.1% on the investment. Rolfe gained around 86.67% on his long-standing investment.

With a 0.27% stake, Fisher is the company’s largest shareholder guru. PRIMECAP management (Trades, Wallet) and Pioneer Investments also have significant positions in the stock.

Portfolio composition

Loeb’s $ 17.07 billion stock portfolio, which consisted of 125 stocks in the quarter ended June 30, is the most heavily invested in technology and financial services.

Nygren’s $ 690 million equity portfolio, made up of 40 stocks, is primarily invested in the tech, financials, and communications sectors.

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Disclosures

I / we have no position in any of the mentioned stocks and do not intend to initiate any position within the next 72 hours.


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