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FPA Capital Fund Trims SM Energy Position, Exits Tenneco

- By Tiziano Frateschi

The FPA Capital Fund (Trades, Portfolio) sold shares of the following stocks during the third quarter.

The fund reduced its SM Energy Co. (SM) holding by 44.83%. The trade had an impact of -3.82% on the portfolio.


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The company, which operates in the acquisition, development and production of crude oil and natural gas liquids, has a market cap of $3.4 billion and an enterprise value of $5.7 billion.

GuruFocus gives the company a profitability and growth rating of 5 out of 10. While the return on equity of 8.59% is underperforming the sector, the return on assets of 3.43% is outperforming 52% of companies in the Global Oil and Gas E&P industry. Its financial strength is rated 4 out of 10. The cash-debt ratio of 0.21 is below the industry median of 0.51.

The company's largest shareholder among the gurus is Sarah Ketterer (Trades, Portfolio) with 5.58% of outstanding shares, followed by First Pacific Advisors (Trades, Portfolio) with 1.81% and Arnold Schneider (Trades, Portfolio) with 0.47%.

FPA exited its position in Tenneco Inc. (TEN). The trade had an impact of -3.46% on the portfolio.

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The company, which manufactures auto parts, has a market cap of $3 billion and an enterprise value of $4.35 billion.

GuruFocus gives the company a profitability and growth rating of 6 out of 10. The return on equity of 37.65% and return on assets of 5.22% are outperforming 59% of companies in the Global Auto Parts industry. Its financial strength is rated of 5 out of 10. The cash-debt ratio of 0.16 is below the industry median of 0.53.

The largest guru shareholder of the company is Mario Gabelli (Trades, Portfolio) with 0.91% of outstanding shares, followed by Diamond Hill Capital (Trades, Portfolio) with 0.65% and First Pacific Advisors with 0.62%.

The fund curbed its Spirit Airlines Inc. (SAVE) position by 68.58%. The trade had an impact of -3.05% on the portfolio.

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The airline has a market cap of $3.3 billion.

GuruFocus gives the company a profitability and growth rating of 7 out of 10. The return on equity of 16.66% and return on assets of 6.58% are outperforming 70% of companies in the Global Airlines industry. Its financial strength is rated 5 out of 10. The cash-debt ratio of 0.49 is below the industry median of 0.54.

First Pacific Advisors is the largest guru shareholder of the company with 1.13% of outstanding shares, followed by Chuck Royce (Trades, Portfolio) with 0.95%, PRIMECAP Management (Trades, Portfolio) with 0.92% and Robert Olstein (Trades, Portfolio) with 0.95%.

The fund sold out of Veeco Instruments Inc. (VECO). The trade impacted the portfolio by -2.81%.

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The semiconductor manufacturer has a market cap of $445.95 million and an enterprise value of $465.9 million.

GuruFocus gives the company a profitability and growth rating of 3 out of 10. The return on equity of -35.32% and return on assets of -21.24% are outperforming 94% of companies in the Global Semiconductor Equipment and Materials industry. Its financial strength is rated 5 out of 10. The cash-debt ratio of 0.93 is below the industry median of 1.69.

The largest guru shareholder of the company is Ken Fisher (Trades, Portfolio) with 2.91% of outstanding shares, followed by the First Pacific Advisors with 2.35%, Royce with 1.26% and Schneider with 1.17%.

The Rowan Companies PLC (RDC) holding was reduced by 42.26%, impacting the portfolio by -2.65%.

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The offshore drilling contractor has a market cap of $2.39 billion and an enterprise value of $3.77 billion.

GuruFocus gives the company a profitability and growth rating of 5 out of 10. The return on equity of -1.85% and return on assets of -1.17% are outperforming 69% of companies in the Global Oil and Gas Drilling industry. Its financial strength is rated 5 out of 10. The cash-debt ratio of 0.45 is above the industry median of 0.40.

Steven Cohen (Trades, Portfolio) is another notable guru shareholder with 0.52% of outstanding shares, followed by Jim Simons (Trades, Portfolio)' Renaissance Technologies with 0.47%, Lee Ainslie (Trades, Portfolio) with 0.35% and Joel Greenblatt (Trades, Portfolio) with 0.2%.

The fund trimmed 50.57% off its Aaron's Inc. (AAN) position. The trade impacted the portfolio by -2.33%.

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The furniture and consumer electronics retailer has a market cap of $3.44 billion and an enterprise value of $3.62 billion.

GuruFocus gives the company a profitability and growth rating of 9 out of 10. The return on equity of 17.59% and return on assets of 11.15% are outperforming 83% of companies in the Global Rental and Leasing Services industry. Its financial strength is rated 7 out of 10. The cash-debt ratio of 0.35 is below the industry median of 0.66.

The largest guru shareholder of the company is Diamond Hill Capital with 2.15% of outstanding shares, followed by the Gabelli with 0.81%.

The Avnet Inc. (AVT) position was reduced by 24.02%, impacting the portfolio by -1.74%.

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The company, which distributes electronic components, software and data center infrastructure hardware, has a market cap of $4.66 billion and an enterprise value of $5.59 billion.

GuruFocus gives the company a profitability and growth rating of 4 out of 10. The return on equity of -3.09% and return on assets of -1.61% are outperforming 78% of companies in the Global Electronics Distribution industry. Its financial strength is rated 6 out of 10. The cash-debt ratio of 0.38 is below the industry median of 1.32.

Richard Pzena (Trades, Portfolio) is the company's largest shareholder among the gurus with 7.92% of outstanding shares, followed by Hotchkis & Wiley with 1.43%, Diamond Hill Capital with 0.96% and Tweedy Browne (Trades, Portfolio) with 0.52%.

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

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This article first appeared on GuruFocus.