Arnold Van Den Berg is the founder of Austin-based Century Management. He and his team seek companies that are trading at discounts to their intrinsic value either because they are lesser known, have a short-term problem or are temporarily out of favor.
As of the close of the second quarter, Century Management held 82 stocks valued at $1.014 billion. The guru bought seven new stocks during the third quarter for a quarter-over-quarter turnover of 12%. The following five companies are the five largest stock positions held by Century Management as of the close of the third quarter.
Berkshire Hathaway (BRK.B)
Van Den Berg’s largest position is in Berkshire Hathaway. The guru holds on to 353,858 shares, representing 0.02% of the company’s shares outstanding and 4.8% of his total portfolio.
The guru decreased his position in Berkshire Hathaway -5.14% over the duration of the third quarter. Van Den Berg sold 19,168 shares in the third quarter price range of $125.23 to $141.28 with an estimated average price of $133.21. Since then the share price has increased approximately 3.9%.
Van Den Berg’s holding history as of the third quarter:
Berkshire Hathaway is a holding company owning subsidiaries engaged in a number of diverse business activities, including property and casualty insurance and reinsurance, utilities and energy, finance, manufacturing, service and retailing.
Berkshire Hathaway’s historical revenue and net income:
The analysis on Berkshire Hathaway reports that the company’s price is near a 10-year high, it has issued $8.3 billion of debt over the past three years and it has shown predictable revenue and earnings growth. The analysis also notes that the company’s operating margin is expanding.
The Peter Lynch Chart suggests that the company is currently overvalued:
Berkshire Hathaway has a market cap of $320 billion. Its shares are currently trading at around $137.85 with a P/E ratio of 15.30, a P/S ratio of 1.71 and a P/B ratio of 1.40. The company had an annual average earnings growth of 9.30% over the past ten years.
GuruFocus rated Berkshire Hathaway the business predictability rank of 3-star.
Wells Fargo & Co (WFC)
Van Den Berg’s second largest position is in Wells Fargo. The guru holds on to 812,130 shares, representing 0.02% of the company’s shares outstanding and 4.2% of his total portfolio.
The guru decreased his position in Wells Fargo -5.56% over the duration of the third quarter. Van Den Berg sold 47,772 shares in the third quarter price range of $49.70 to $53.36, with an estimated average price of $51.43. Since then the share price has increased approximately 0.1%.
Van Den Berg’s holding history as of the third quarter:
Wells Fargo is a financial services companies, providing a range of retail banking and brokerage, asset and wealth management and corporate and investment banking products and services to customers.
Wells Fargo’s historical revenue and net income:
The analysis on Wells Fargo reports that the company’s revenue per share has been in decline over the past five years, its operating margin is expanding and its dividend yield is near a 3-year high. The analysis also notes that over the past three years Wells Fargo has issued $22.8 billion of debt, but that its debt level is acceptable.
The Peter Lynch Chart suggests that the company is currently undervalued:
Wells Fargo has a market cap of $267.72 billion. Its shares were traded at around $51.50 with a P/E ratio of 12.70, a P/S ratio of 3.33 and a P/B ratio of 1.67. The company offers a dividend yield of 2.50%. Wells Fargo had an annual average earnings growth of 4.60% over the past ten years.
Jacobs Engineering Group (JEC)
Van Den Berg’s third largest position is in Jacobs Engineering where the guru holds on to 800,985 shares. His position in the company represents 0.61% of the company’s shares outstanding and 3.9% of his total portfolio.
During the third quarter Van Den Berg reduced his position by -5.49%. The guru sold a total of 46,488 shares in the third quarter price range of $48.82 to $54.87, with an estimated average price of $52.71. The price per share has decreased about -9.8% since then.
Van Den Berg’s historical holding history:
Jacobs Engineering is a professional services firm in the U.S. Its business focuses on providing a range of technical, professional and construction services to a large number of industrial, commercial and governmental clients around the world.
Jacobs Engineering’s historical revenue and net income:
The analysis on Jacobs Engineering reports that the company’s Piotroski F-Score is low, its operating margin is expanding and it’s P/E and P/B ratios are trading at near historic lows.
The Peter Lynch Chart suggests that the company is currently overvalued:
Jacobs Engineering has a market cap of $6.34 billion. Its shares are currently trading at around $47.52 with a P/E ratio of 17.70, a P/S ratio of 0.50 and a P/B ratio of 1.60. The company had an annual average earnings growth of 12% over the past ten years.
Cisco Systems (CSCO)
The guru’s fourth largest holding is in Cisco Systems where he maintains 1,521,579 shares of the company’s stock. This position makes up for 0.03% of the company’s shares outstanding as well as 3.8% of the guru’s portfolio.
Over the past quarter Van Den Berg reduced his holdings -7.03% by selling 18,422 shares of the company’s stock. He sold these shares near the estimated average quarterly price of $25.15 per share. Since then the price per share has decreased approximately -0.8%.
The guru’s historical holding history:
Cisco sells networking and communications products and provides related services. The company's two main products are switches and routers (devices that manage network traffic within local-area networks and between different networks), but Cisco essentially touches everything in the networking industry, from security to storage to application switching.
Cisco’s historical revenue and net income:
The analysis on Cisco reports that the company’s revenue per share has slowed down over the past year, the price is sitting near a 5-year high and its dividend yield is near a 5-year high.
The Peter Lynch Chart suggests that the company is currently overvalued:
Cisco Systems has a market cap of $126.67 billion. Its shares were trading at around $24.94 with a P/E ratio of 16.70 and a P/S ratio of 2.79. The company’s dividend yield is at 3.00%, and they had an annual average earnings growth of 7.80% over the past ten years.
GuruFocus rated Cisco the business predictability rank of 4-star.
Corning (GLW)
The guru’s fifth largest position is in Corning. The guru holds on to 1,813,595 shares, representing 0.14% of the company’s shares outstanding and 3.5% of his total portfolio.
During the second quarter Van Den Berg reduced his position -7.72% by selling a total of 151,783 shares. He sold these shares in the third quarter price range of $18.80 to $22.33, with an estimated average price of $20.87. The price per share has dropped approximately -9% since then.
Van Den Berg’s holding history as of the third quarter:
Corning is a provider of high-performance glass, optical fiber and cable and hardware and equipment products, ceramic substrates, laboratory products and specialized polymer products, advanced optical materials and other technologies.
Corning’s historical revenue and net income:
The analysis on Corning reports that the company’s payout ratio is too high, meaning that it might not be able to maintain its dividend. It also notes that over the past three years the company has issued $1.2 billion of debt, but overall its debt level is acceptable.
The Peter Lynch Chart suggests that Corning is currently overvalued:
Corning has a market cap of $24.81 billion. Its shares are currently trading at around $18.99 with a P/E ratio of 21.50, a P/S ratio of 3.00 and a P/B ratio of 1.50. The company had an annual average earnings growth of 2.50% over the past five years.
Check out Van Den Berg’s complete third quarter holdings here.
