Ronald Muhlenkamp Sells JPMorgan, Morgan Stanley

GuruFocus.com
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- By Tiziano Frateschi

Ronald Muhlenkamp (Trades, Portfolio) is a patient value investor and the founder and president of Muhlenkamp & Company Inc., and portfolio manager for the company's self-named mutual fund. During the first quarter he sold shares in the following stocks:


The investor exited his stake in JPMorgan Chase & Co. (JPM) with an impact of -7.07% on the portfolio.

The company is a financial services firm and a banking institution. Its segments are Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking and Asset Management.

Net income grew 12% from the same quarter of a year before, and revenue had a 4% increase, driven by net interest income on loan and deposit growth and auto lease revenue, partially offset by the impact of card co-brand renegotiations.

GuruFocus gives the stock a profitability and growth rating of 6 out of 10 with ROE of 8.99% and ROA of 0.98% that are outperforming 55% of the companies in the Global Banks - Global industry. Financial strength has a rating of 6 out of 10 with cash to debt of 1.15 that is below the industry median of 2.39.

Barrow, Hanley, Mewhinney & Strauss is the company's largest shareholder among the gurus with 0.85% of outstanding shares followed by Dodge & Cox with 0.72%, PRIMECAP Management (Trades, Portfolio) with 0.56%, Chris Davis (Trades, Portfolio) with 0.48%, Ken Fisher (Trades, Portfolio) with 0.38%, T Rowe Price Equity Income Fund (Trades, Portfolio) with 0.3%, HOTCHKIS & WILEY with 0.25% and Bill Nygren (Trades, Portfolio) with 0.17%.

The guru closed his stake in ARRIS International PLCA (ARRS) with an impact of -4.53% on the portfolio.

The company provides entertainment and communications solutions. It provides Customer Premises Equipment including set-top, gateway, DSL and cable modem; and Network & Cloud including video infrastructure.

During the first quarter the company completed the acquisition of Pace PLC (PIC). It reported 33% growth for revenues and adjusted net income was 47 cents per diluted share, as compared to 44 cents per diluted share for the first quarter of 2015.

GuruFocus gives the stock a profitability and growth rating of 6 out of 10 with ROE of -6.60% and ROA of -2.55% that are underperforming 53% of the companies in the Global Communication Equipment industry. Financial strength has a rating of 5 out of 10 with cash to debt of 0.29 that is below the industry median of 2.38.

The largest shareholder among the gurus is HOTCHKIS & WILEY with 4.34% of outstanding shares followed by First Pacific Advisors (Trades, Portfolio) with 1.95%, FPA Capital Fund (Trades, Portfolio) with 0.9%, Jim Simons (Trades, Portfolio) with 0.72%, Joel Greenblatt (Trades, Portfolio) with 0.34%, NWQ Managers (Trades, Portfolio) with 0.33% and Chuck Royce (Trades, Portfolio) with 0.24%.

The investor exited his stake in Morgan StanleyA (MS) with an impact of -3.06% on the portfolio.

The company through its subsidiaries and affiliates provides financial products and services to a diversified group of clients and customers, including corporations, governments, financial institutions and individuals.

First quarter net revenues were $7.8 billion compared with $9.9 billion a year ago and net income applicable to Morgan Stanley was 55 cents per diluted share compared to $1.18 per diluted share for the same period a year ago.

GuruFocus gives the stock a profitability and growth rating of 5 out of 10 with ROE of 5.87% that is overperforming and ROA of 0.60% that is underperforming 61% of the companies in the Global Capital Markets industry. Financial strength has a rating of 5 out of 10 with cash to debt of 0.33.

Richard Pzena (Trades, Portfolio) is the company's largest shareholder among the gurus with 0.65% of outstanding shares followed by Diamond Hill Capital (Trades, Portfolio) with 0.61%, T Rowe Price Equity Income Fund (Trades, Portfolio) with 0.53%, HOTCHKIS & WILEY with 0.37%, Ken Heebner (Trades, Portfolio) with 0.21%, Spiros Segalas (Trades, Portfolio) with 0.2%, Mario Gabelli (Trades, Portfolio) with 0.09% and Pioneer Investments (Trades, Portfolio) with 0.08%.

The guru reduced his shares in Celanese Corp. (CE) by 53.35% with an impact of -2.9% on the portfolio.

The company is a producer of chemicals. It operates through four business segments: Advanced Engineered Materials, Consumer Specialties, Industrial Specialties and Acetyl Intermediates.

GuruFocus gives the stock a profitability and growth rating of 6 out of 10 with ROE of 11.84% that is outperforming and ROA of 3.74% that is underperforming 51% of the companies in the Global Chemicals industry. Financial strength has a rating of 5 out of 10 with cash to debt of 0.29 that is far below the industry median of 0.80.

The company's largest shareholder among the gurus is Dodge & Cox with 8.92% of outstanding shares followed by PRIMECAP Management (Trades, Portfolio) with 0.83%, Columbia Wanger (Trades, Portfolio) with 0.56%, Pioneer Investments (Trades, Portfolio) with 0.36%, SimonsA with 0.29% and GreenblattA with 0.16%.

The investor exited his stake in Outerwall Inc. (OUTR) with an impact of -2.35% on the portfolio.

The company is a provider of automated retail solutions offering convenient products and services that benefit consumers and drive incremental retail traffic and revenue for retailers.

During the first quarter consolidated revenue decreased 11.9%, and net income had an 8% decrease from the same quarter of a year before.

GuruFocus gives the stock a profitability and growth rating of 8 out of 10 with ROE of 248.45% and ROA of 3.50% that are outperforming 55% of the companies in the Global Specialty Retail industry. Financial strength has a rating of 5 out of 10 with cash to debt of 0.24 that is below the industry median of 0.97.

Greenblatt is the company's largest shareholder among the gurus with 3.05% of outstanding shares followed by SimonsA with 1.87%, Steven Cohen (Trades, Portfolio) with 0.87% and GabelliA with 0.05%.

The guru reduced his shares in Delta Air Lines Inc. (DAL) by 49.42% with an impact of -2% on the portfolio.

The company provides scheduled air transportation for passengers and cargo throughout the U.S. and around the world. The company's business segments are airline and refinery.

First quarter operating margin was 16.6% compared to 14.9% in the same quarter of a year before, and adjusted operating margin was 18.5% compared to 8.8%.

GuruFocus gives the stock a profitability and growth rating of 7 out of 10 with ROE of 46.28% and ROA of 8.86% that are outperforming 71% of the companies in the Global Airlines industry. Financial strength has a rating of 5 out of 10 with cash to debt of 0.35 that is below the industry median of 0.45.

The largest shareholder among the gurus is PRIMECAP Management (Trades, Portfolio) with 2.48% of outstanding shares followed by David Tepper (Trades, Portfolio) with 1.11%, First Eagle Investment (Trades, Portfolio) with 0.39%, Alan Fournier (Trades, Portfolio) with 0.29%, SimonsA with 0.16%, GreenblattA with 0.15% and Leon Cooperman (Trades, Portfolio) with 0.12%.

The investor reduced his shares in Microsoft Corp. (MSFT) by 18.00% with an impact of -0.87% on the portfolio.

The company is engaged in designing, manufacturing and selling devices and online advertising. Its products include operating systems for computing devices, servers, phones and other devices.

Recently the company announced plans to acquire LinkedIn Corp. (LNKD). During the third quarter revenue was $20.5 billion GAAP and $22.1 billion non-GAAP.

GuruFocus gives the stock a profitability and growth rating of 7 out of 10 with ROE of 12.75% and ROA of 5.73% that are outperforming 65% of the companies in the Global Software - Infrastructure industry. Financial strength has a rating of 7 out of 10 with cash to debt 2.28 that is below the industry median of 10.94.

PRIMECAP Management (Trades, Portfolio) is the company's largest shareholder among the gurus with 0.76% of outstanding shares followed by Jeff Ubben (Trades, Portfolio) with 0.72%, Dodge & Cox with 0.67%, Barrow, Hanley, Mewhinney & Strauss with 0.35%, Steve Mandel (Trades, Portfolio) with 0.33%, First Eagle Investment (Trades, Portfolio) with 0.3%, FisherA with 0.23% and Pioneer Investments (Trades, Portfolio) with 0.22%.

The guru reduced his shares in Universal Display Corp. (OLED) by 40.38% with an impact of -0.84% on the portfolio.

The company is engaged in the research, development and commercialization of organic light-emitting diode or OLED, technologies and materials for use in displays for wearables, smartphones, tablets and televisions and solid-state lighting applications.

During the first quarter net income was 4 cents per diluted share, on revenues of $29.7 million, compared to net income of 3 cents per diluted share, on revenues of $31.2 million for the first quarter of 2015.

GuruFocus gives the stock a profitability and growth rating of 6 out of 10 with ROE of 3.36% that is underperforming and ROA of 2.84% that is outperforming 52% of the companies in the Global Semiconductor Equipment & Materials industry. Financial strength has a rating of 9 out of 10 with no debt.

The largest shareholder among the gurus is PRIMECAP Management (Trades, Portfolio) with 2.58% of outstanding shares followed by SimonsA with 0.61%, John Burbank (Trades, Portfolio) with 0.05% and CohenA with 0.02%.

The investor exited his stake in Epizyme Inc. (EPZM) with an impact of -0.24% on the portfolio.

The company discovers, develops and commercializes novel epigenetic therapies for cancer patients.

GuruFocus gives the stock a profitability and growth rating of 4 out of 10 with ROE of -44.08% and ROA of -36.79% that are underperforming 59% of the companies in the Global Biotechnology industry. Financial strength has a rating of 7 out of 10, with cash to debt 270.46 that is above the industry median of 49.71.

PRIMECAP Management (Trades, Portfolio) is the company's largest shareholder among the gurus, with 11.39% of outstanding shares followed by SimonsA with 0.05%.

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This article first appeared on GuruFocus.


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