Frank Sands of Sands Capital Management filed a Form 13F yesterday disclosing his portfolio at the end of the second quarter. Sands Capital has provided superior performance over the years and has beaten the S&P every year for the past five years by an average margin of 13.7 percent. The investment firm maintains a single growth-oriented philosophy that is rooted in the belief that, over time, common stock prices will reflect the earnings power and growth of the underlying business. The portfolio is concentrated in 49 stocks at a total value of $39.7 billion. The firm added five new positions to its portfolio in the second quarter: Whole Foods Market (WFM), Twenty-First Century Fox (FOXA), Medidata Solutions (MDSO), Discovery Communications (DISCA), and the iShares Russell 1000 Growth Index ETF (IWF).
Whole Foods Market Inc (WFM)
Sands purchased 16,491,524 shares of Whole Foods, whose share price averaged $43.66 during the quarter. The new position equates to 1.6 percent of the portfolio and 4.5 percent of the shares outstanding.
Whole Foods is the leading retailer of natural and organic foods and America’s first national “Certified Organic” grocer. It also operates stores in Canada and the United Kingdom. The company has a market cap of $13.9 billion. The stock closed at $37.96 on Wednesday, August 13, with a P/E ratio of 25.00, P/B ratio of 3.80, and P/S ratio of 1.02. The dividend yield of Whole Foods is 1.21 percent. The stock is undervalued in relation to its 5-year median financial ratios of P/E, P/B, and P/S at 34.7, 4.0, and 1.1.
Twenty-First Century Fox Inc (FOXA)
Sands purchased 18,252,005 shares of Twenty-First Century Fox, whose shares averaged $33.99 during the quarter. The new position equates to 1.6 percent of the portfolio and 0.82 percent of the shares outstanding.
Twenty-First Century Fox is a diversified global media and entertainment company with operations in: Cable Network Programming, Television, Filmed Entertainment, and Direct Broadcast Satellite Television. The stock closed at $35.40 on Wednesday, August 13, with a P/E ratio of 25.70, P/B ratio of 4.60, and P/S ratio of 2.65. The dividend yield is 0.71 percent. The stock is currently overpriced in relation to its 5-year median financial ratios of P/E, P/B, and P/S at 16.1, 2.1, and 1.6.
Medidata Solutions Inc (MDSO)
Sands purchased 4,720,008 shares of Medidata Solutions, whose shares averaged $41.50 during the quarter. The new position equates to 0.51 percent of the portfolio and 8.6 percent of the shares outstanding.
Medidata Solutions is a leading global provider of cloud-based solutions for clinical research in life sciences, designed to transform clinical development and increase the value of its customers’ research investments. The stock closed at $46.69 on Wednesday, August 13, with a P/E ratio of 388.00, P/B ratio of 10.80, and P/S ratio of 8.50. The stock is currently overpriced in relation to its 5-year median financial ratios of P/E, P/B, and P/S at 77.2, 6.6, and 4.9.
Discovery Communications (DISCA)
Sands purchased 1,272,850 shares of Discovery Communications, whose shares averaged $77.04 during the quarter. The stock split on early August with shareholders receiving one C-class share (DISCK) for every share A-share (DISCA, Financial). The new position equates to 0.24 percent of the portfolio and 0.37 percent of the shares outstanding.
Discovery Communications is a global media company that provides content across multiple distribution platforms, including digital distribution arrangements, throughout the world. Its portfolio of networks includes prominent television brands such as Discovery Channel, TLC and Animal Planet. The stock closed at $42.71 on Wednesday, August 13, with a P/E ratio of 13.1, P/B ratio of 2.1, and P/S ratio of 2.5. The stock is fairly valued in relation to its 5-year median P/B ratio of 2.2. It is undervalued in relation to its 5-year median ratios of P/E and P/S at 24.7 and 4.9. It is possible that the ratios have not been fully updated since the recent split and creation of new “C” shares last week.
iShares Russell 1000 Growth Index ETF (IWF)
Sands purchased 2,610 of the iShares Russell 1000 Growth ETF, whose shares averaged $87.68 during the second quarter. The new position is an insignificant portion of the portfolio.
The iShares Russell Growth Index ETF seeks to track the investment results of an index composed of large- and mid-cap U.S. equities that exhibit growth characteristics. Its five largest holdings are Apple (AAPL), Microsoft (MSFT), Verizon (VZ), IBM (IBM), and Google (GOOGL). About 44 percent of the fund consists of technology and consumer discretionary stocks. The ETF closed at $90.32 on Wednesday, August 13. The dividend yield of the fund is 1.36 percent.
See the rest of Frank Sands (Trades, Portfolio)’ portfolio and latest stock picks here: Frank Sands Stock Picks.
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