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Arnold Van Den Berg Buys 2 Stocks, Sells Alibaba in 1st Quarter

- By Holly LaFon

Arnold Van Den Berg (Trades, Portfolio), CEO and co-chief investment officer of Century Management, disclosed that he started two new positions in a first-quarter portfolio update Monday.


Van Den Berg acquired shares of the SPDR S&P Oil & Gas Exploration and Production ETF (XOP) and Altra Industrial Motion Corp. (AIMC). He also purchased more shares of two existing holdings, Era Group Inc. (ERA) and Synchrony Financial (SYF), and sold out of Alibaba Group Holdings Ltd. (BABA). Portfolio turnover was only 3.74%.

The investor ended the quarter with 41 stocks in his portfolio, mostly in the industrials, energy and financial services sectors. The aggregative holdings were valued at $587 million.

When seeking stocks to invest in, Van Den Berg's firm examines companies' financial fundamentals, then buys when it sees a disconnect between inherent value and market price. Often, it seizes on these situations when they are created by market volatility.

In March, the firm celebrated value stocks' low valuations.

"Fans of cheaper equities that pay higher dividends can rejoice. Based on their forward price-to-book ratios, value shares globally are trading in the lowest price-to-book ratio zone relative to growth stocks since at least 2004, according to data compiled by Bloomberg," it wrote in a research update.

First-quarter portfolio highlights

SPDR S&P Oil & Gas Exploration and Production ETF (XOP)

Van Den Berg purchased 455,096 shares of the exchange-traded fund in the first quarter when the price averaged $30. The holding represents 2.36% of the portfolio.

SPDR S&P Oil & Gas Exploration & Production has a market cap of $2.27 billion; its shares were traded around $31.24 with a price-earnings ratio of 7.79. The trailing 12-month dividend yield of SPDR S&P Oil & Gas Exploration & Product stocks is 0.86%.

Altra Industrial Motion Corp. (AIMC)

Van Den Berg purchased 208,715 shares of the company in the first quarter when the price averaged $30. The holding represents 1.1% of the portfolio.

Altra Industrial Motion Corp. has a market cap of $2.44 billion; its shares were traded around $37.78 with a price-earnings ratio of 29.04 and price-sales ratio of 1.20. The trailing 12-month dividend yield of Altra Industrial Motion Corp. is 1.81%. The forward dividend yield of Altra Industrial Motion Corp. is 1.81%. Altra Industrial Motion Corp. had an annual average earnings growth of 5% over the past 10 years.

Era Group Inc. (ERA)

Van Den Berg purchased 140,947 shares of the company, increasing the position by 14.75% to 1,096,733 shares. The first-quarter share price averaged $11, and the weighting in the portfolio was 2.14%.

Era Group Inc. has a market cap of $198.870 million; its shares were traded around $8.95 with a price-earnings ratio of 14.44 and price-sales ratio of 0.87.

Synchrony Financial (SYF)

Van Den Berg purchased 843 shares of the company, increasing the position by 0.34% to 245,698 shares. The stock's first-quarter share price averaged $30 and the holding represented 1.32% of the portfolio.

Synchrony Financial has a market cap of $23.7 billion; its shares were traded around $34.41 with a price-earnings ratio of 7.68 and price-sales ratio of 1.56. The trailing 12-month dividend yield of Synchrony Financial stocks is 2.26%. The forward dividend yield of Synchrony Financial stocks is 2.44%.

Alibaba Group Holdings Ltd. (BABA)

Van Den Berg sold 53,439 shares of Alibaba Group Holdings, closing the position. He started it in the fourth quarter when the price averaged $148. In the first quarter, the stock's price averaged $168.

Alibaba Group Holding Ltd. has a market cap of $480.8 billion; its shares were traded around $186.94 with a price-earnings ratio of 47.80 and price-sales ratio of 9.48. Alibaba Group Holding Ltd. had an annual average earnings growth of 87.90% over the past 10 years. GuruFocus rated Alibaba Group Holding Ltd. the business predictability rank of 3.5-star.

See Arnold Van Den Berg (Trades, Portfolio)'s portfolio here.

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This article first appeared on GuruFocus.