Jerome Dodson's Parnassus Fund Buys Nutrien and Nielsen

GuruFocus.com
0

- By Holly LaFon

According to his portfolio update released Monday, Jerome Dodson (Trades, Portfolio) bought two new stocks for his portfolio in the fourth quarter, Nutrien Ltd. (NTR) and Nielsen Holdings PLC (NLSN).


Dodson is the chairman and CEO of Parnassus Investments, which he founded in 1984. He is also lead portfolio manager of the $1.09 billion Parnassus Fund, covering U.S. equities and buying undervalued stocks with a contrarian strategy, according to fund documents. Over the past 10 years, the fund produced average annual returns of 9.46%, versus 7.44% for the S&P 500 index.

The fund is shaped with its highest sector weighting in information technology, at 24%, followed by health care at 20% and financials at 18%.

Its most sizable positions consist of Alliance Data Systems (ADS), Progressive Corp. (PGR) and Gilead Sciences Inc. (GILD) at fourth quarter-end.

In a third-quarter letter, Dodson said he was "optimistic" about the economy.

"Synchronized global growth was the theme of the third quarter, which helped boost the S&P 500's year-to-date return by 4.48%," he wrote. "The U.S. economy continues to chug along, and its pace could accelerate if the Trump administration is able to pass tax reform legislation. Growth in the European Union is finally picking up after years of stagnation. The Chinese and Indian economies are growing at impressive rates. Meanwhile, Latin America and other emerging markets are rebounding, as commodity prices and foreign exchange rates have stabilized. More than 40% of the S&P 500 companies' total sales are foreign, so the improving international environment is a big deal for stocks."

The new buys

Nutrien Ltd. (NTR)

Nutrien Ltd. engages in the potash, nitrogen and phosphate business with service to agriculture and industrial markets. The company formed from the merger of Agrium and Potash Corporation of Saskatchewan on Jan. 2.

Since they began trading, Nutrien shares have declined 4.1% to $53.40 in Monday after-hours trading.

Nutrien has a market cap of $17.87 billion, a price-earnings ratio of 38.08 and price-sales ratio of 3.79. Its trailing 12-month dividend yield is 1.87%, and the forward dividend yield is 1.87%.

Dodson purchased 500,000 shares of the company, giving it a 2.45% weighting in the stock portfolio. The average price per share for the third quarter was $49.

Nielsen Holdings PLC (NLSN)

Nielsen Holdings provides measurement and data analytics on consumers and markets.

For the third quarter, the company reported $1.64 million in revenue, a 4.5% increase from the third quarter of 2016. Earnings reached $146 million on 12.3% growth due primarily to revenue and margin increases and lower restructuring charges. The company ended the quarter with $662 million in cash and $8.44 billion in debt.

Year to date, Nielsen shares have gained 2% to close at $36.66 each Monday evening.

Nielsen Holdings has a market cap of $13.34 billion, with a price-earnings ratio of 26.20 and price-sales ratio of 2.08. The trailing 12-month dividend yield is 3.55%, and the forward dividend yield is 3.63%. Nielsen Holdings had annual average earnings growth of 11.2% over the past five years.

Dodson purchased 587,500 shares of Nielsen Holdings PLC, giving it a 2.03% portfolio weight. The stock's price averaged $38 for the quarter.

See Jerome Dodson (Trades, Portfolio)'s portfolio here.

This article first appeared on GuruFocus.


Advertisement

Recommended Stories