Scott Black joins the EOG and the Fed


Managing Director Delphi

Scott Black (Trades, Portfolio) released its third quarter portfolio in November.

A follower of the Graham-Dodd school of value investing, the Boston-based guru’s firm takes long positions in companies with “absolute low valuation” and managed by good management teams. The company is also known for reaching out to the management team of every company it invests in.

During the three months ended September 30, the investor entered six new positions, sold nine shares and added or reduced a number of other existing investments. Its most notable transactions included new stakes in EOG Resources Inc. (EOG, Financial) and FedEx Corp. (FDX, Financial), an increased bet on West Fraser Timber Co. Ltd. (WFG, financial) and the disposal of Laboratory Corp of America Holdings (LH, Financial) and Quest Diagnostics Inc. (DGX, financial).

EOG Resources

The guru has invested in 14,520 shares of EOG Resources (EOG, Financial), dedicating 1.20% of the equity portfolio to the position. The stock traded at an average price of $ 73.01 per share during the quarter.

The Houston-based oil and gas producer has a market cap of $ 51.8 billion; its shares were trading around $ 88.09 on Friday with a price-to-earnings ratio of 16.73, a price-to-book ratio of 2.31 and a price-to-sell ratio of 3.04.

The GF value line suggests that the stock is slightly overvalued based on its historical ratios, past performance and future earnings projections.

GuruFocus has rated EOG’s financial strength as 6 out of 10. In addition to a comfortable level of interest coverage, the high Altman Z-Score of 3.46 indicates that the company is in good standing. Return on invested capital also eclipses return on invested capital, meaning that value is created as the business grows.

The company’s profitability was rated 7 out of 10, as its margins and return on equity, assets and capital surpass more than half of its competitors. EOG also has a high Piotroski F-Score of 7 out of 9, which implies that the trading conditions are sound. Although income per share has declined in recent years, it still has a predictability rank of one in five stars. According to GuruFocus, companies with this rank are reporting an average of 1.1% per year over a 10-year period.

Among the gurus invested in EOG,

Bill nygren (Trades, Portfolio) holds the largest stake with 1.04% of its outstanding shares.

PRIMECAP management (trades, portfolio), the

T Rowe Prize Equity Income Fund (Trades, Portfolio) and Pioneer Investments also have significant positions in the stock.

FedEx

After selling a FedEx (FDX, financial) in the third quarter of 2019, Black took a new stake of 4,993 shares, allocating it to 1.13% of the equity portfolio. The shares traded at an average price of $ 271.73 each during the quarter.

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The courier company, headquartered in Memphis, Tennessee, has a market cap of $ 62.90 billion; its shares were trading around $ 238.49 on Friday with a price-to-earnings ratio of 12.58, a price-to-book ratio of 2.59 and a price-to-sell ratio of 0.73.

According to the GF Value Line, the share is currently valued at fair value.

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FedEx’s financial strength has been rated 4 out of 10 by GuruFocus. Although the company has issued around $ 2.6 billion in new long-term debt over the past three years, it is at a manageable level due to adequate interest coverage. The Altman Z-Score of 2.61, however, indicates that it is under some pressure as assets are accumulating at a faster rate than income is increasing. ROIC also eclipses WACC, so value is created.

The company’s profitability is doing better with a score of 8 out of 10. Although the operating margin is down, FedEx is posting strong returns that outperform more than half of its industry peers and a Piotroski F -High score of 7. Consistent profit and revenue growth also contributed to a four-star predictability ranking. GuruFocus claims that companies with this rank are reporting an average of 9.8% per year.

With a 5.14% stake, Dodge & Cox is FedEx’s largest guru shareholder.

PRIMECAP management (trades, portfolio), Hotchkis & Wiley,

Bill gates (Trades, Portfolio) ‘trust foundation and

Mason hawkins (Trades, Portfolio), among several other gurus, also own the stock.

Western Fraser Wood

With a 1.16% impact on the equity portfolio, the investor increased West Fraser Timber’s stake by 99.38%, by purchasing 14,459 shares. During the quarter, the stock traded at an average price per share of $ 74.59.

Black now owns 29,008 shares in total, representing 2.33% of the stock portfolio and his third largest holding. GuruFocus estimates that it has gained 22.59% on the investment so far.

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The Canadian forestry company, which produces lumber, plywood, pulp, newsprint, wood chips and other products, has a market capitalization of $ 9.2 billion; its shares were trading around $ 86.09 on Friday with a price-to-earnings ratio of 3.21, a price-to-book ratio of 1.27 and a price-to-sell ratio of 0.9.

Based on the GF value line, the stock appears to be currently valued at fair value.

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West Fraser Timber’s financial strength and profitability were both rated 8 out of 10 by GuruFocus. Along with a comfortable level of interest coverage, the robust Altman Z-Score of 5.04 indicates it’s in good standing. Value creation also occurs as ROIC exceeds WACC.

The company is supported by strong margins and returns that outperform the majority of its competitors as well as a high Piotroski F-Score of 8. With consistent earnings and revenue growth, West Fraser Timber has a predictability ranking of three. stars. GuruFocus data shows that companies with this ranking have an average return of 8.2% per year.

Murray stahl (Trades, Portfolio) is West Fraser’s largest guru shareholder with a position of 0.28%. Other investor gurus are

Jeremy grantham (professions, portfolio),

Steven cohen (professions, portfolio),

Ray dalio (professions, portfolio),

Ken heebner (Trades, Portfolio), Pioneer Investments,

Lee ainslie (trades, portfolio) and

Joel greenblatt (trades, portfolio).

Corp of America Laboratory

In its biggest deal of the quarter with a -1.43% impact on the equity portfolio, Black abandoned the 5,417 shares of Laboratory Corp of America (LH, Financial). The stock traded at an average price of $ 293.32 per share during the quarter.

It gained around 28.95% on the investment according to GuruFocus. It was previously its fifth position in importance.

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More commonly known as Labcorp, the Burlington, North Carolina-based company that provides clinical laboratory testing services, has a market capitalization of $ 28.05 billion; its shares were trading around $ 291.21 on Friday with a price-to-earnings ratio of 10.4, a price-to-book ratio of 2.67 and a price-to-sell ratio of 1.73.

The GF value line suggests that the stock is currently slightly overvalued.

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GuruFocus has rated Labcorp’s financial strength at 5 out of 10. In addition to adequate interest coverage, the high Altman Z-Score of 3.93 indicates the company is in good standing. ROIC also significantly exceeds WACC, so good value creation occurs.

The company’s profitability fared better, scoring a 9 out of 10 thanks to an expanding operating margin. Labcorp is backed by strong returns that outperform the majority of its industry peers, a high Piotroski F-Score of 9, and consistent earnings and revenue growth. It also has a four-star predictability rating.

Among the gurus invested in Labcorp,

Vanguard Healthcare Fund (Trades, Portfolio) holds the largest stake with 1.45% of its outstanding shares.

Andreas Halvorsen (professions, portfolio),

John rogers (professions, portfolio),

Jim simons (businesses, portfolio) ‘Renaissance Technologies,

Jana Partners (professions, portfolio),

Wallace weitz (professions, portfolio),

Charles Brandès (Trades, Portfolio) and Cohen are other notable shareholders.

Quest Diagnosis

The guru sold 9,349 shares of Quest Diagnostics (DGX, Financial), which had an impact of -1.18% on the equity portfolio. During the quarter, the shares traded at an average price of $ 146.26 each.

GuruFocus estimates that it gained 7.81% on the investment, which was established in the first quarter of the year.

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Based in Secaucus, New Jersey, the clinical laboratory company, which provides diagnostic tests, information and other services, has a market capitalization of $ 19.22 billion; its shares were trading around $ 157.35 on Friday with a price-to-earnings ratio of 9.42, a price-to-book ratio of 3.02 and a price-to-sell ratio of 1.86.

According to the GF Value Line, the share is currently valued at fair value.

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Quest Diagnostic’s financial strength has been rated 5 out of 10 by GuruFocus. In addition to sufficient interest coverage, the high Altman Z-Score of 3.99 indicates that the company is in good standing. Value creation also occurs since ROIC is higher than WACC.

The company’s profitability was rated 8 out of 10, thanks to expanding operating margin, strong returns that outperform the majority of its competitors and a high Piotroski F-Score of 9. Steady growth profit and revenue also contributed to its predictability rating of 3.5 stars. . GuruFocus has found that companies with this rank report an annual average of 9.3%.

With a 2.24% stake,

Chris Davis (Trades, Portfolio) is the company’s largest shareholder guru. Grantham and Pioneer Investments also have significant stakes in Quest Diagnostics.

Additional Transactions and Portfolio Composition

Black also established positions in Webster Financial Corp. (WBS, Financial), Himax Technologies Inc. (HIMX, Financial), Freeport-McMoRan Inc. (FCX, Financial) and Lakeland Industries Inc. (LAKE, financial) during the quarter, sold out of Lumen Technologies Inc. (LUMN, Financial) and Blackstone Inc. (BX, financial) and strengthened its stake in Civitas Resources Inc. (CIVI, Financial).

The guru’s $ 97 million equity portfolio of 102 stocks is heavily invested in the tech, financials and consumer discretionary sectors.

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