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Jerome Dodson's 3rd-Quarter New Buys

According to information released earlier this week, Jerome Dodson (Trades, Portfolio)'s Parnassus Fund (Trades, Portfolio) invested in the following new holdings during the third quarter of fiscal 2019: Guidewire Software Inc. (NYSE:GWRE), Pentair PLC (NYSE:PNR), Illumina Inc. (NASDAQ:ILMN) and Autodesk Inc. (NASDAQ:ADSK).


The Parnassus Fund's strategy is to seek long-term capital appreciation through securities that have wide moats, relevancy over the long term, quality management teams and a market price below intrinsic value. As of the end of the quarter, the fund's 37-stock equity portfolio has a value of $926 million.

Guidewire Software

Dodson's firm bought 192,402 shares of Guidewire Software, giving the position a weight of 2.19% in the equity portfolio. During the quarter, the stock was trading at an average price of $100.78 per share.

Guidewire is a provider of digital platforms for property and casualty insurers with a market cap of $8.94 billion. It has a price-earnings ratio of 435.56, a price-sales ratio of 12.61 and an operating margin of 0.12%. It has a GuruFocus financial strength score of 7 out of 10 and a profitability score of 7 out of 10.

Below is a graph of the company's stock price, along with its tangible book value per share, Peter Lynch fair value, earnings power value and Graham number. According to these intrinsic value calculations, the stock may be slightly overvalued.

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Pentair

The Parnassus Fund bought 506,155 shares of Pentair, giving the position a weight of 2.07% in the equity portfolio. The stock was trading at an average price of $37.17 per share during the quarter.

This water treatment and filtration company has a market cap of $6.36 billion. It has a price-earnings ratio of 17.76, a price-sales ratio of 2.23 and an operating margin of 14.38%. GuruFocus has assigned it a financial strength score of 5 out of 10 and a profitability score of 5 out of 10.

You can see the company's stock price below, along with its tangible book value per share, Peter Lynch fair value, earnings power value and Graham number. According to these calculations, Pentair is currently overvalued.

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Illumina

The fund bought 51,968 shares of Illumina, giving the position a weight of 1.71% in the equity portfolio. The stock was trading at an average price of $303.82 during the quarter.

Illumina, which provides genetic sequencing solutions to research institutions, has a market cap of $45.40 billion. It has a price-earnings ratio of 49.01, a price-sales ratio of 13.59 and an operating margin of 24.88%. It scored a 7 out of 10 GuruFocus financial strength rating and a 9 out of 10 predictability rating.

Below is a graph of the company's stock price, along with several intrinsic value calculations. According to these values, Illumina is currently overvalued.

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Autodesk

Finally, Dodson's Parnassus Fund bought 96,086 shares of Autodesk after selling out of it in the first quarter of fiscal 2016. It now forms 1.53% of the equity portfolio. The stock was trading at an average price of $155.67 during the quarter.

Autodesk is a premier AutoCAD software provider with a market cap of $31.99 billion. It has a price-earnings ratio of 582.72, a price-sales ratio of 10.93 and an operating margin of 5.45%. It has a GuruFocus financial strength score of 4 out of 10 and a profitability score of 6 out of 10.

According to the intrinsic value calculations in the graph below, Autodesk may be currently overvalued.

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Disclosure: Author owns no positions in any of the stocks mentioned.

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This article first appeared on GuruFocus.