John-Marie Eveillard is the Senior Adviser and Board Trustee of First Eagle Funds and Senior Vice President of Arnhold and S. Bleichroeder Advisers.
Eveillard was born in France and moved to the U.S. in 1968. He managed the First Eagle Overseas and First Eagle Global Fund at their inception in 1993, as well as the First Eagle U.S. Value Fund in 2001.
During the fourth quarter, Eveillard purchased 31 new holdings. The following are the five largest new positions in terms of portfolio impact.
PPG Industries (PPG, Financial)
Eveillard’s largest purchase during the quarter was 1,028,349 shares of PPG Industries at an average price of $207.09 per share. The purchase had a 0.58% impact on the portfolio.
PPG manufactures and distributes a variety of coatings, optical and specialty, and glass products.
The stock has been up 22% over the past year and may be overvalued according to the Peter Lynch chart.
GuruFocus rates the business predictability as 3 out of 5 stars. The stock currently trades at $227.14, while the DCF model projects a fair value of $97.71, giving a margin of safety of -132%.
The current P/E ratio is 14, while the P/S ratio is 2.
Union Pacific Corp (UNP, Financial)
Eveillard also purchased 1,989,936 shares of Union Pacific at an average price of $114.71 per share.
UNP’s main operating company is Union Pacific Railroad Company which links 23 states in the western two-thirds of the U.S. Its diversified business mix includes agricultural products, automotive, chemicals, and coal.
The stock has been up 34% over the past year and currently trades at $119.76. GuruFocus rates its business predictability as 4.5 out of 5 stars. The DCF model projects a fair value of $163.98, giving a margin of safety of 27%.
Diluted EPS has been increasing steadily over time and recorded at $5.75 in FY 2014.
The company’s operating margin is also expanding, with the growth rate increasing at 6% over the past five years.
The current P/E ratio is 20.8, while the P/S ratio is 4.5.
Packaging Corp of America (PKG, Financial)
Eveillard purchased 2,429,031 shares of Packaging Corp of America for an average price of $71.57 per share.
The company manufactures containerboard and corrugated packaging products. Its three business segments are packaging, paper, and corporate.
The stock has been up 20% over the past year and is overvalued when compared to the Peter Lynch earnings line. The stock currently trades at $78.68.
GuruFocus rates the company’s business predictability as 4.5 out of 5 stars. The DCF model projects a fair value of $108.10, giving a margin of safety of 27%.
The current P/E ratio is 14.9, while the P/S ratio is 1.4.
Discover Financial Services (DFS, Financial)
Eveillard bought 1,189,993 shares of Discover for an average price of $64.16 per share.
Discover Financial Services is a direct banking and payment services company, and offers credit card loans, private student loans, personal loans, etc.
The stock has been up 6% over the past year and is undervalued according to the Peter Lynch chart.
Discover’s diluted EPS has seen consistent growth over time, and recorded at $4.96 in FY 2013.
The current dividend yield is 1.6%, which is close to the five-year high. The payout ratio is 17%, indicating the dividend is sustainable with room for growth in the future.
UnitedHealth Group (UNH, Financial)
Eveillard’s fifth-largest new purchase during the quarter was 663,058 shares in UnitedHealth Group for an average of $94.67 per share.
UnitedHealth Group is a diversified health care company with two platforms: UnitedHealthcare provides health care insurance and services, while Optum provides information and technology-enabled health services.
The company’s stock has been up 55% over the past year and currently trades at $109.15. GuruFocus rates its business predictability as 4.5 out of 5 stars. The DCF model projects a fair value of $93.92, giving a margin of safety of -16%.
The current margin is 0.77, indicating UnitedHealth Group cannot cover its short term obligations.
The company’s P/E ratio is 19.2, while the P/S ratio is 0.83.
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