The S&P 500 index has risen more than 7% year to date. Some of the stocks in Warren Buffett (Trades, Portfolio)’s portfolio have dropped to their lowest share price in a year. Buffett has mentioned that he first only buys companies that have undeniably good prospects and also looks for good prices.
As he mentioned in his last year’s letter to Berkshire Hathaway (BRK.A, Financial)(BRK.B, Financial) shareholders: “We first have to decide whether we can sensibly estimate an earnings range for five years out, or more. If the answer is yes, we will buy the stock (or business) if it sells at a reasonable price in relation to the bottom boundary of our estimate. If, however, we lack the ability to estimate future earnings – which is usually the case – we simply move on to other prospects.”
Three of his stocks are trading on Tuesday at notably low prices: Viacom Inc. (VIAB, Financial), Deere & Co. (DE, Financial) and Chicago Bridge & Iron Company (CBI, Financial).
Viacom is trading at 0.7% above its 52-week low share price, closing at $77.97 per share on Tuesday. Viacom had a 52-week share price of $89.76 and has declined by 11% since the start of the year.
The relatively low price, however, is still well above what Buffett paid for his shares – an average of $48. He last bought stock in the company in third quarter 2012.
Buffett in total holds 7,602,200 shares of Viacom Inc., making it 0.61% of his portfolio.
Viacom Inc. was organized in Delaware in 2005. The company is a entertainment content company that connects with audiences through compelling content across television, motion picture, online and mobile platforms in more than 160 countries and territories. Viacom Inc. has a market cap of $32.98 billion; its shares were traded at around $77.97 with a P/E ratio of 14.40 and P/S ratio of 2.63. The dividend yield of Viacom Inc. stocks is 1.60%.
Deere & Co. has fallen to within 3.1% of its 52-week low, closing at $83.32 per share on Tuesday after declining by almost 9% year to date.
Buffett last bought share of the company in second quarter 2013, when the price averaged $78. He holds 3,978,767 shares of the company, a 0.33% holding.
Deere & Co. was incorporated under the laws of Delaware in 1958. Deere & Co. has a market cap of $29.88 billion; its shares were traded at around $83.37 with a P/E ratio of 9.40 and P/S ratio of 0.85. The dividend yield of Deere & Co. stocks is 2.50%. Deere & Co. had an annual average earnings growth of 11.40% over the past 10 years. GuruFocus rated Deere & Co. the business predictability rank of 5-star.
Chicago Bridge & Iron Company (CBI, Financial)
Chicago Bridge & Iron was 4.9% off its one-year low, closing at $60.07 per share. The stock reached $89.22 as a one-year high and has declined by 28% year to date.
Buffett in the second quarter added 1,150,355 shares to his holding of the company at an average price of $80. He holds 10,701,110 shares in total, making the company 0.68% of his portfolio.
Chicago Bridge & Iron Company was founded in 1889. It provides conceptual design, technology, engineering, procurement, fabrication, construction and commissioning services to customers in the energy, petrochemical and natural resource industries. Chicago Bridge & Iron Company has a market cap of $6.55 billion; its shares were traded at around $60.53 with a P/E ratio of 12.90 and P/S ratio of 0.56. The dividend yield of Chicago Bridge & Iron Company stocks is 0.40%. Chicago Bridge & Iron Company had an annual average earnings growth of 24.30% over the past 10 years. GuruFocus rated Chicago Bridge & Iron Company the business predictability rank of 2.5-star.
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