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First Pacific Advisors Buys Alcoa, Baidu,Yahoo

- By Tiziano Frateschi

Robert L. Rodriguez, CFA, is the CEO of First Pacific Advisors (Trades, Portfolio), a Los Angeles-based institutional money management firm, employing a disciplined approach to value investing, prudently seeking superior long-term returns while maintaining a focus on capital preservation. During the fourth quarter the guru traded shares in the following stocks:


The investor purchased 6,514,702 shares in Alcoa Corp. (AA) with an impact of 1.46% on the portfolio.

The company invented the aluminum industry in 1888; since the dawn of the aluminum industry, the name Alcoa has been synonymous with operational excellence and leadership in the production of bauxite, alumina and aluminum products.

Fourth-quarter revenue grew 9% from a quarter before and adjusted EBITDA excluding special items of $335 million increased 18% from the third quarter. During the quarter the company achieved a seasonal low of 13 days working capital.

GuruFocus gives the stock a profitability and growth rating of 2 out of 10. The return on equity (ROE) of -3.43% and return on assets (ROA) of -2.38% are outperforming 65% of the companies in the Global Aluminum industry. Financial strength has a rating of 5 out of 10. The cash to debt of 0.59 is below the industry median of 25.81.

The largest shareholder among the gurus is Paul Singer (Trades, Portfolio) with 5.6% of outstanding shares followed by ELLIOTT ASSOCIATES LP with 3.81%, First Pacific Advisors with 3.56%, Manning & Napier Advisors Inc. with 2.05%, Jim Simons (Trades, Portfolio) with 1.04%, David Einhorn (Trades, Portfolio) with 0.7% and Stanley Druckenmiller (Trades, Portfolio) with 0.66%.

The guru added to its holding in Baidu Inc. ADR (BIDU) by 84.24%. The trade had an impact of 1.05% on the portfolio.

It is a Chinese language internet search provider. The company offers a Chinese-language search platform on its website Baidu.com. Fourth-quarter total revenues had a 2.6% decrease from the corresponding period in 2015, and flat year-over-year and operating profit decreased 38.2%. The company reported an increase of 2% year over year for mobile search monthly active users.

GuruFocus gives the stock a profitability and growth rating of 8 out of 10. The ROE of 14.44% and ROA of 7.57% are outperforming 93% of the companies in the Global Internet Content & Information industry. Financial strength has a rating of 7 out of 10.

Frank Sands (Trades, Portfolio) is the largest shareholder among the gurus with 1.89% of outstanding shares followed by Dodge & Cox with 1.64%, Sarah Ketterer (Trades, Portfolio) with 0.86%, Ruane Cunniff (Trades, Portfolio) with 0.76%, David Herro (Trades, Portfolio) with 0.75%, First Pacific Advisors with 0.5% and Ken Fisher (Trades, Portfolio) with 0.34%.

The guru bought 3,085,731 shares in Mylan NV (MYL) with an impact of 0.94% on the portfolio.

The company together with its subsidiaries is a pharmaceutical company that develops, licenses, manufactures, markets and distributes generic, branded generic and specialty pharmaceuticals. During the last quarter total revenues grew 31% from the fourth quarter of a year before, and adjusted earnings per share increased 14%. In 2017, the company expects to deliver another strong year of performance with anticipated 2017 revenues of $12.25 billion to $13.75 billion and adjusted EPS of $5.15 to $5.55.

GuruFocus gives the stock a profitability and growth rating of 7 out of 10. The ROE of 2.47% and ROA of 0.98% are underperforming 67% of the companies in the Global Drug Manufacturers - Specialty & Generic industry. Financial strength has a rating of 4 out of 10. The cash to debt of 0.08 is below the industry median of 2.56.

The largest shareholder among the gurus is Vanguard Health Care Fund (Trades, Portfolio) with 5.23% of outstanding shares followed by John Paulson (Trades, Portfolio) with 3.85%, Einhorn with 1.62%, Lee Ainslie (Trades, Portfolio) with 0.71%, David Tepper (Trades, Portfolio) with 0.61%, First Pacific Advisors with 0.58% and Simons with 0.28%.

The guru initiated a holding in Perrigo Co. PLC (PRGO) buying 1,297,550 shares. The trade had an impact of 0.86% on the portfolio.

The company develops, manufactures and distributes over-the-counter and generic prescription pharmaceuticals, nutritional products and active pharmaceutical ingredients.

GuruFocus gives the stock a profitability and growth rating of 6 out of 10. The ROE of -15.27% and ROA of -7.84% are underperforming 83% of the companies in the Global Drug Manufacturers - Specialty & Generic industry. Financial strength has a rating of 4 out of 10. The cash to debt of 0.06 is below the industry median of 2.56.

Manning & Napier Advisors is the largest shareholder among the gurus with 1.79% of outstanding shares followed by Ruane Cunniff with 0.92%, First Pacific Advisors with 0.91%, Simons with 0.44%, Fisher with 0.36%, Jerome Dodson (Trades, Portfolio) with 0.09% and Murray Stahl (Trades, Portfolio) with 0.01%.

The guru raised his position in Yahoo! Inc. (YHOO) by 34.40% with an impact of 0.57% on the portfolio.

It is a technology company. It offers search, content and communication on mobile phone, tablet and desktop. Its segments include Americas, EMEA and Asia Pacific. Fourth-quarter GAAP revenue was $1.469 billion compared to $1.273 billion in the same quarter of a year before. Net earnings were $162 million compared to $4.435 billion for the fourth quarter of the prior year.

GuruFocus gives the stock a profitability and growth rating of 7 out of 10. The ROE of -0.71% and ROA of -0.45% are underperforming 63% of the companies in the Global Internet Content & Information industry. Financial strength has a rating of 7 out of 10 with no debt.

The largest shareholder among the gurus is First Pacific Advisors with 0.76% of outstanding shares followed by PRIMECAP Management (Trades, Portfolio) with 0.66%, Steven Cohen (Trades, Portfolio) with 0.55%, Einhorn with 0.45%, Steven Romick (Trades, Portfolio) with 0.36%, Jana Partners (Trades, Portfolio) with 0.21%, Simons with 0.18% and Tepper with 0.14%.

The firm added to its position in Avnet Inc. (AVT) by 23.07%, impacting the portfolio by 0.13%.

The company together with its subsidiaries is a value-added distributor of electronic components, enterprise computer and storage products, IT solutions and services and embedded systems. Second-quarter adjusted operating income grew 7.9% from the same quarter of a year before and adjusted diluted earnings per share grew 2.7%. The company reported a decrease of 67.1% for diluted earnings per share (EPS).

GuruFocus gives the stock a profitability and growth rating of 6 out of 10. The ROE of 8.30% and ROA of 3.38% are outperforming 57% of the companies in the Global Electronics Distribution industry. Financial strength has a rating of 6 out of 10 with cash to debt of 0.35 is below the industry median of 1.43.

Richard Pzena (Trades, Portfolio) is the largest shareholder among the gurus with 3.96% of outstanding shares followed by HOTCHKIS & WILEY with 1.09%, Richard Snow (Trades, Portfolio) with 0.94%, Tweedy Browne (Trades, Portfolio) with 0.67%, FPA Capital Fund (Trades, Portfolio) with 0.53%, Jeremy Grantham (Trades, Portfolio) with 0.43%, Charles Brandes (Trades, Portfolio) with 0.36% and Tweedy Browne Global Value with 0.32%.

The investor established a 61,000-share position in Dollar General Corp. (DG). The transaction had an impact of 0.04% on the portfolio.

The company is a discount retailer in the U.S., which offers a selection of merchandise, including consumables, seasonal, home products and apparel. Third-quarter net sales increased 5% and cash from operations grew 39% from the same quarter of a year before. Gross profit, as a percentage of net sales, decreased 49 basis points from the 2015 third quarter.

GuruFocus gives the stock a profitability and growth rating of 8 out of 10. The ROE of 22.56% and ROA of 10.57% are outperforming 87% of the companies in the Global Discount Stores industry. Financial strength has a rating of 6 out of 10. The cash to debt of 0.06 is below industry median of 0.48.

The largest shareholder among the gurus is Chuck Akre (Trades, Portfolio) with 0.54% of outstanding shares followed by Diamond Hill Capital (Trades, Portfolio) with 0.37%, Joel Greenblatt (Trades, Portfolio) with 0.13%, Manning & Napier Advisors with 0.08%, Mario Cibelli (Trades, Portfolio) with 0.04%, First Pacific Advisors with 0.02%, Cohen with 0.02%, Caxton Associates (Trades, Portfolio) with 0.02% and Paulson with 0.01%.

The guru raised his holding in Aaron's Inc. (AAN) by 4.34% with an impact of 0.03% on the portfolio.

The company is a specialty retailer of furniture, consumer electronics, computers, appliances and household accessories. Its business segments are Sales and Lease Ownership, Progressive, HomeSmart, Franchise and Manufacturing.

GuruFocus gives the stock a profitability and growth rating of 8 out of 10. The ROE of 9.70% and ROA of 5.39% are outperforming 60% of the companies in the Global Rental & Leasing Services industry. Financial strength has a rating of 7 out of 10, with cash to debt of 0.66 is above industry median of 0.59.

Diamond Hill Capital is the largest shareholder among the gurus with 5.14% of outstanding shares followed by FPA Capital Fund with 1.65%, Mario Gabelli (Trades, Portfolio) with 1.42%, Greenblatt with 0.69%, Brandes with 0.5%, John Hussman (Trades, Portfolio) with 0.14%, PRIMECAP Management with 0.1% and Pzena with 0.07%.

Disclosure: I do not own any shares of any stocks mentioned in this article.

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This article first appeared on GuruFocus.