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Dodge & Cox Boosts Stake in TE Connectivity

GuruFocus.com
·3 mins read

Dodge & Cox (Trades, Portfolio) revealed an addition to its holding of TE Connectivity Ltd. (NYSE:TEL) by 3.04% according to GuruFocus' Real-Time Picks.


Dodge & Cox was founded in 1930 by Van Duyn Dodge and E. Morris Cox. The firm employs a team research approach in making investment decisions.The Dodge & Cox team is guided both in what its buys and what it sells by an ongoing search for superior relative value, steering clear of popular choices that come at a price it would rather not pay.

The firm continued to add to the holding after upping the stake by 10.32% in the first quarter of the year. On June 30, the investment team added 975,034 shares, impacting the equity portfolio by 0.09%. The stock traded for an average price of $81.55 per share on the day of the transaction. GuruFocus estimates the firm has a total gain of 131.97% over the duration of the holding.

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10b920cd9796b4d9ca27c8c82dc93387.png

Portfolio overview

At the end of the first quarter, Dodge & Cox's portfolio contained 178 stocks, with three new holdings. By weight, the portfolio is most invested in financial services (24.52%), health care (19.48%) and technology (18.04%).

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9f82756da396d9e0c1476c32a32483a2.png

New holdings at the end of the first quarter included the iShares iBoxx $ Investment Grade Corporate Bond (LQD) exchange-traded fund, Lincoln National Corp. (NYSE:LNC) and Cogent Communication Holdings Inc. (NASDAQ:CCOI).

TE Connectivity

TE Connectivity is a leader in the global connectors and sensors industry. It manufactures and designs products that connect and protect the flow of power and data inside millions of products used by consumers and industries, particularly in mission-critical applications that face harsh environments and require unwavering reliability. The company operates in three segments: transportation, industrial and communications.

On July 10, the stock was trading at $79.06 per share with a market cap of $26.08 billion. According to the Peter Lynch chart, TE Connectivity was trading above its intrinsic value at the end of the first quarter and was overvalued.

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GuruFocus gives the company a financial strength rating of 6 out of 10, a profitability rank of 8 out of 10 and a valuation rank of 3 out of 10. The company's cash-to-debt ratio of 0.19 places it lower than 89.50% of competitors due to high levels of debt. In contrast, the operating margin of 16.56% and the net margin of 12.01% place the company above the majority of the industry.

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a8c3a69562549cdbb100d75dbd8358f9.png

Dodge & Cox is the largest guru shareholder of the company with 10.01% of shares outstanding. Other top guru shareholders include Vanguard Group Inc. (Trades, Portfolio), Harris Associates LP (Trades, Portfolio), BlackRock Inc. (Trades, Portfolio), Capital World Investors (Trades, Portfolio) and State Street Corp. (Trades, Portfolio).

Disclaimer: Author holds no stocks mentioned.

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This article first appeared on GuruFocus.