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Wally Weitz Buys 2 Stocks and Loads Up on JPMorgan

- By Holly LaFon

Wally Weitz's value-focused firm Weitz Investment Management added only two stocks to its portfolio in the first quarter, while making a sizable increase to its holding of JPMorgan Chase & Co. (JPM).

The portfolio Weitz reports to the Securities and Exchange Commission covers multiple separate strategies his firm has developed. The combined 72 stocks were valued around $2.38 billion at the end of the first quarter. The firm manages about $4 billion in assets overall.


The company's approach consists of disciplined research, a long-term focus, collaboration and a commitment to buying stocks at least 30% below fund managers' estimates of intrinsic value. Read more about Weitz's investment philosophy in his interview with GuruFocus here.

In a first-quarter letter, Weitz wrote that he could not predict what will happen in the economy in the near future, but maintained his views on companies no matter the travails ahead:

"The current slowdown in the U.S. economy may turn into a recession and cause interest rates to move even lower. Or the economy could regain momentum, continue to grow for several more years and set off inflationary forces that lead to higher rates," he wrote. "We believe that both will happen, possibly multiple times, over the next 10-20 years. We cannot predict how these changes will unfold, but the nice thing about investing in good businesses is that we do not need to know. Companies with strong competitive positions, able management and liquid balance sheets will take advantage of whatever opportunities come along."

The firm was fondest of financial services stocks at the end of the first quarter, which accounted for 27.41% of holdings. Technology, the second-largest portfolio sector, was 24.16%, the largest portion in at least the past 10 years. Communication services filled 14.13%.

In the first quarter, Weitz Investment Management started positions in Box Inc. (BOX) and Eagle Materials Inc. (EXP).

Box Inc. (BOX)

The firm purchased 1,046,400 shares of Box Inc., giving it 0.71% portfolio weight. The stock's first-quarter share price averaged $21.

Box Inc. has a market cap of $2.63 billion; its shares were traded around $17.93 Monday with a price-sales ratio of 4.17. Box Inc. had an annual average earnings growth of 28.40% over the past five years.

Eagle Materials Inc. (EXP)

The firm purchased 78,500 shares of Eagle Materials Inc., giving it 0.28% portfolio weight. The stock's first-quarter share price averaged...

Eagle Materials Inc. has a market cap of $3.83 billion; its shares were traded around $86.80 with a price-earnings ratio of 65.27 and price-sales ratio of 2.95. The trailing 12-month dividend yield of Eagle Materials Inc. is 0.45%. The forward dividend yield of Eagle Materials Inc. is 0.46%. Eagle Materials Inc. had an annual average earnings growth of 14.2% over the past 10 years. GuruFocus rated Eagle Materials Inc. the business predictability rank of 2.5-star.

JPMorgan Chase & Co. (JPM)

The firm increased its holding of JPMorgan Chase & Co. by 1,513,33%, buying 227,000 shares of the company. Its holding totaled 242,000 shares, or 1.03% of the portfolio. The stock's first-quarter share price averaged $103.

JPMorgan Chase & Co. has a market cap of $345.35 billion; its shares were traded around $106.46 with a price-earnings ratio of 11.48 a price-sales ratio of 3.27. The trailing 12-month dividend yield of JPMorgan Chase & Co. is 2.78%. The forward dividend yield of JPMorgan Chase & Co. is 3.02%.

See Wallace Weitz (Trades, Portfolio)'s portfolio here.

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This article first appeared on GuruFocus.