In 1980, value investor Scott Black (Trades, Portfolio) founded Delphi Management, which takes only long positions in U.S.-listed companies. According to the firm’s website, Delphi’s team believes investments should exhibit absolute value, and personally contacts the management of every company before making an investment.
The firm’s two products are the All-Capitalization portfolio, which invests in business that meet Delphi’s criteria regardless of market capitalization. The Small/Mid-Capitalization portfolio focuses on companies below the high-end of the Russell 2500 Value Index.
During the fourth quarter, the fund purchased 15 new stocks. The following are the five largest new holdings in terms of portfolio impact.
AMC Networks (AMCX, Financial)
The fund purchased 150,165 shares of AMC Networks at an average price of $60.37 per share.
AMC Networks owns and operates several brands in cable television such as AMC, IFC, Sundance channel, WE tv, and IFC Films. A few of AMC’s critically-acclaimed dramas include Mad Men, The Walking Dead, Breaking Bad, and The Killing.
The stock has been up 5% over the past year and may be overvalued when compared to the Peter Lynch earnings line.
The current P/E ratio is 22.2, which is better than the Global Broadcast TV industry average of 45.2. The ratio is toward the middle of the 10-year range for the company.
The fund also purchased 121,928 shares in Belden for an average price of $70.72 per share. The fund had previously held a stake in the company, but sold out in Q2 2014.
Belden is a signal transmissions solutions provider. Its products are used in live production signal management, program playout for broadcasters, monitoring for pay-TV providers, and broadband connectivity.
The stock has been up 26% and may be overvalued according to the Peter Lynch chart.
The current dividend yield is 0.2%, which is close to the 10-year low. The payout ratio is 11%.
Franklin Resources (BEN, Financial)
Black also purchased 161,205 shares in Franklin Resources for an average price of $55.23 per share.
Franklin Resources is a global investment management organization that offers investment choices under the Franklin, Templeton, Mutual Series, Bissett, Fiduciary Trust, Darby, Balanced Equity Management and K2 brand names.
The stock has been up 3% over the past year and is about fairly valued according to the Peter Lynch chart.
GuruFocus rates Franklin Resources’ business predictability as 3.5 out of 5 stars. The stock currently trades at $53.17, and the DCF model projects a fair value of $58.27, giving an 8% margin of safety.
Diluted EPS has been growing consistently and recorded at $3.79 in FY 2014.
The current P/E ratio is 14.3 and the P/S ratio is 3.94.
Thor Industries (THO, Financial)
Black also purchased 157,991 shares of Thor Industries at an average of $53.93 of per share.
Thor Industries manufactures and sells recreation vehicles and mid- and small-size buses in the U.S. and Canada. Its two segments are towable recreation vehicles and motorized recreation vehicles.
The company’s operating margin has been expanding steadily since FY 2011 and is 6.87% for the trailing 12 months.
The stock has been up 15% over the past year, and may be overvalued when compared to the Peter Lynch earnings line.
LaSalle Hotel Properties (LHO, Financial)
Black’s fifth-largest purchase during the quarter was 210,240 shares of LaSalle Hotel Properties at an average price of $38.38 per share.
LaSalle buys, redevelops, and leases upscale and luxury hotels located in convention, resort, and major urban business markets. The company owns 46 hotels in 14 markets in 10 states.
The stock has been up 39% over the past year, and is overvalued according to the Peter Lynch chart.
The current P/E ratio is 22.6, while the P/S ratio is 4.1.
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