Brian Rogers Purchases 5 New Stocks In Q4

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Jan 16, 2015
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During the fourth quarter, Brian Rogers (Trades, Portfolio) of the T. Rowe Price Equity Income Fund added five new positions to the portfolio and sold out of three holdings.

The Equity Income Fund follows a value-oriented approach that focuses on established companies with strong records of dividend payments. The majority of the portfolio is held in financial stocks at 19.4%, followed by consumer cyclical, and industrials.

Rogers will step down as portfolio manager of the Equity Income Fund in October, and John Linehan, the company’s current head of U.S. equity, will take over on Nov. 1.

The fund’s 10-year cumulative annual return is 7.6%, only marginally better than the S&P 500’s return of 7.4% per year over the same time period.

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The five new holdings in order of largest portfolio impact are:

The fund purchased 4 million shares of Rayonier at an average price of $29.52 per share. The stock has been down 8% over the past year. Industrials comprise 13.9% of the fund’s portfolio.

Rayonier is a forest and timberland management company and is one of the largest private landowners in the country. The value of its assets lies mainly in 2.6 million acres of timberland.

The current dividend yield is 5.3%, while the five-year growth rate is 9.2% — higher than 82% of companies in the lumber and wood industry. The following graph depicts Rayonier’s dividend per share compared to earnings per share.

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The two most recent insider transactions were buys. CEO David Nunes purchased 40,000 shares of the stock on Dec. 16 for $26.33 per share.

GuruFocus rates Rayonier’s financial strength as 8 out of 10 and profitability and growth as 8 out of 10.

The fund also sold out of the following positions:

The fund sold all 3,668,743 of its shares of Legg Mason for an average price of $49.58 per share. Legg Mason’s stock has been up 21% over the past year, representing a good time for the fund to cash out of its holding.

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Legg Mason provides investment management to institutional and individual clients as well as company-sponsored mutual funds and pooled investment vehicles.

Though the company has had continuous dividends since 2010, its current dividend yield is a low 1.1%, and lower than 86% of companies in the asset management industry.

Long-term revenue growth over the past 10 years has been -0.2%, indicating the company is struggling to expand its business.

The fund reduced its holdings in four companies: Campbell Soup (CPB, Financial), Apple (AAPL, Financial), Clorox (CLX, Financial) and Madison Square Garden (MSG, Financial). It also increased the stake in seven, including IBM (IBM, Financial) and Hess Corp (HES).

View Brian Rogers (Trades, Portfolio)’ current portfolio here. Not a Premium Member of GuruFocus? Try it free for 7 days.