Bill Nygren (Trades, Portfolio) is portfolio manager of The Oakmark Fund, The Oakmark Select Fund and the Oakmark Global Select Fund. Nygren has an M.S. in finance from the University of Wisconsin-Madison and a B.S. in accounting from the University of Minnesota.
Web Page:http://www.oakmark.com/
Bill Nygren (Trades, Portfolio) and his partners are value investors, and they invest in companies that they believe trade at a substantial discount to what they consider to be the true business value. They believe that, over time, the price of a stock will rise to reflect the value of the underlying company. In evaluating potential investments, they focus on the following characteristics: A company's stock price and whether it is a significant discount to their estimate of underlying business value, free cash flows and intelligent investment of excess cash and a high level of manager ownership. They look at each purchase as if they are buying a piece of a business and not just a stock certificate.
Nygren's portfolio has a total value of $16,809 million with a focus on the Financial Services sector that represent the 32.4% of stocks.
He has big stakes in Bank of America Corporation (BAC), News Corp (NWSA) and Chesapeake Energy Corp (CHK), but over the last two years he focused his trades buying shares of Apache Corporation (APA).
Apache Corporation has a Market Cap of $168,368 million. It is an independent energy company that explores for, develops, and produces natural gas, crude oil, and natural gas liquids. It has exploration and production interests in six countries: the U.S., Canada, Egypt, Australia, the U.K. North Sea (North Sea), and Argentina. The Company's North American asset basecomprises operations in the Permian Basin, the Anadarko basin in western Oklahoma and the Texas Panhandle, Gulf Coast onshore and offshore areas of the U.S., and in Western Canada and also has leasehold acreage holdings in the Cook Inlet of Alaska and other areas where it is pursuing exploration opportunities.
He started to buy it on Q2 of 2013 when he bought 1,350,000 shares at an average price of $79.48. Then on the following quarters he heavily increased his stakes reaching a total of 6,775,000 shares with an average price of $78.57.
The stock is currently trading at $65 with a forward P/E of 48.08 better then 86% of other Global Oil & Gas E&P Industry competitors.
The P/B ratio is 0.98 at its all time low and is ranked higher then 83% of other competitors and against an Industry Median level of 1.11.
At current prices the stock is returning an average loss of -17% to the Bill Nygren (Trades, Portfolio)’s portfolio.
The profitability is rated 7/10 with negative returns. These ratios are at the lowest level of company history, but at current levels these ratios are better then 70% of competitors.
Financial Strength is rated 5/10 with a Cash to Debt of 0.05 Vs and Industry Median of 0.52. This ratio is at the same level of 10 years back.
Summmarizing the most important ratios :
| APA | Industry | |
| Price | ||
| P/E (ttm) | 48.08 | 35.00 |
| P/B | 0.98 | 1.11 |
| Profitability | ||
| ROE | -17.32 | 0.64 |
| ROA | -8.98 | -0.12 |
| ROC | -5.34 | 2.75 |
The company over the last five years faced a strong growth in EBITDA (12.70%), Book Value (15.20%) Revenue (11.90%).
Over the last 12 months the company faced a negative growth, starting from a drop of 7.60% on Revenue and a -7.50% on EBITDA.
At current prices the stock looks undervalued by 104% based on Fair Value Votes and looks overpriced based on the Peter Lynch Earnings Line.
The company has a yeld of 1.47% with a reasonable payout ratio of 20%. It started to give dividends 20 years ago and over the last five years, the dividend growth rate is 6.10%.
Dodge & Cox is the main holder of APA, holding 7.95% of Outstandig shares. Other Gurus holding it are Brian Rogers holding 1.86% of Outstanding Shares, Manning & Napier Advisors, Inc (0.55%). Bill Nygren (Trades, Portfolio) is holding 1.8% of Outstanding Shares.
During the last quarter just Michael Price bought shares of APA as a new holding.
By contrast of the above buys, many Gurus sold out the stock in Q4 of 2014. These gurus are Bill Frels, Jana Partners, Scott Black, Jim Simons, Louis Moore Bacon.
Gurus that did not sell out but reduced their positions by more then 40% are NWQ Managers (-56%), Jeremy Grantham (-46%) and Wallace Weitz (-99%)
