Scott Black (Trades, Portfolio), chief investment officer of Delphi Management, disclosed this week that three of his new buys for the second quarter were Easterly Government Properties Inc. (NYSE:DEA), Granite Point Mortgage Trust Inc. (NYSE:GPMT) and Gladstone Commercial Corp. (NASDAQ:GOOD).
According to its website, Black's Boston-based firm pursues a conservative investment strategy that emphasizes the fundamental performance of underlying companies. As disciples of the Graham-Dodd school of value investing, Black and his research team seek long-term capital appreciation through investments in securities that have low absolute valuation. Additionally, Delphi contacts management at every company in which the firm invests.
As of quarter-end, Delphi's $111 million equity portfolio contains 93 stocks, of which nine are new positions. The top three sectors in terms of weight are consumer cyclical, financial services and technology, with weights of 21.22%, 20.63% and 17.84%.
Easterly Government Properties
Black purchased 28,346 shares of Easterly Government Properties, giving the position 0.46% equity portfolio weight. Shares averaged $18.22 during the quarter.
The Washington D.C.-based real estate investment trust acquires, develops and leases commercial properties in the U.S. to government agencies. GuruFocus ranks Easterly's financial strength 3.8 out of 10 on several weak signs, which include a low Altman Z-score of 1.01 and a cash-to-debt ratio that underperforms 82.49% of global competitors. Despite this, Easterly's debt-to-equity ratio underperforms just 50.41% of global REITs.
Granite Point Mortgage Trust
Black purchased 23,445 shares of Granite Point Mortgage Trust, giving the holding 0.40% equity portfolio weight. Shares averaged $19.04 during the quarter.
The New York-based REIT focuses primarily on directly originating, investing in and managing senior floating-rate commercial mortgage loans and other debt-like commercial real estate investments. According to GuruFocus data, Granite Point's debt-to-equity and equity-to-asset ratios underperform over 82% of global competitors, suggesting poor financial strength.
Black purchased 19,948 shares of Gladstone, giving the position 0.38% equity portfolio weight. Shares averaged $21.24 during the quarter.
The McLean, Virginia-based REIT invests in and owns net leased industrial, commercial and retail real property. Additionally, Gladstone makes long-term industrial and commercial mortgage loans.
Black also established new positions in Chevron Corp. (NYSE:CVX), M&T Bank Corp. (NYSE:MTB), General Dynamics Corp. (NYSE:GD) and Eaton Corp. PLC (NYSE:ETN).
Disclosure: No positions.
Read more here:
- Jeff Auxier's Top 4 Buys in the 2nd Quarter
- Julian Robertson Buys 3 Stocks in 2nd Quarter
- Andreas Halvorsen's Top 5 Buys of the 2nd Quarter
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This article first appeared on GuruFocus.
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