Billionaire Ken Fisher Initiated New Positions in These Stocks
Gayatri is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Fisher Investments is a Woodside, California based investment advisory and hedge fund management firm founded by billionaire Ken Fisher. The firm recently filed its 13F form for the quarter ended September 30. The following is a list of its top three new buys from the last quarter:
Here’s a look at these stocks in detail.
Petroleo Brasileiro Petrobras SA
Petrobras is trading at a forward PE of 7.05. Its expected EPS for the current year is $2.09 and next year is $2.95. The company’s topline is expected to decline 1.80% in the current year and grow 3% next year. Petrobas is well poised to deliver one of the highest production growth rates among the major oil companies over the next decade. The company has untapped oil reserves in excess of 16 billion barrels. Petrobas’ development and monetization of this resource base would be an important aspect of the company’s investment story going forward. The company plans to divest ~$14.8 billion in the next few years which includes monetization of some of its Gulf of Mexico assets. Some of the other important projects to watch out are its development of existing resources in the Campos basin and development of pre-salt discoveries in Santos basin. Given the stock’s current low valuation and the company’s long term growth prospects I rate the stock as a buy.
Comcast is trading at a forward PE of 16.12. Its expected EPS for the current year is $1.96 and next year is $2.24. The company is expected to post top line growth of % in the current year and % next year. Comcast’s scale and diversification makes it one of the best bet in cable space. The company has FCF yield of ~9% and dividend yield of 1.80%. Although the company is trading at a forward PE of 16.12x, I don’t believe it is high given the company’s ~15% expected EPs growth rate. The company should benefit from its acquisition of NBC Universal and increasing demand for faster consumer broadband connection. In addition, the company has reached stable capex levels in dollar terms, which means any increasing cash flow from business growth will be returned to shareholders in form of dividends and buybacks. The company reported strong earnings last quarter exceeding analyst estimates and I expect the trend to continue. The company is likely to continue gaining market share in residential and commercial phone/data service market for next several years. Given its impressive earnings growth prospects, I rate Comcast’s stock a buy.
Vodafone Group Plc
Vodafone is trading at a forward PE of 10.25. Its expected EPS for the current year is $2.52 and next year is $2.59. The company’s top line is expected to decline 3.40% in the current year and grow 2.40% next year. Vodafone has FCF yield of ~10% and dividend yield of ~7.50% making it and excellent capital return story. In addition, the company’s 45% stake in Verizon Wireless gives it an exposure to secular growth US wireless market. Verizon Wireless now accounts for ~34% of group’s revenues and ~55% of its EPS. Although, the company’s European business is declining, I believe its Verizon Wireless exposure will more than offset it. Any stabilization in European business or potential increase in Verizon Wireless’ dividend will act as a positive catalyst for the stock.
To sum up, Petrobas is a good long term bet given its resource potential. Comcast, on the other hand, appears attractive because of its market share gains and earnings potential. Although, Vodafone's fundamentals are not going great, I like the company for 45% stake it holds in Verizon Wireless.
GayatriSharma has no positions in the stocks mentioned above. The Motley Fool owns shares of Microsoft. Motley Fool newsletter services recommend Microsoft, Petroleo Brasileiro S.A. (ADR), Vodafone Group Plc (ADR), and Vodafone Group Plc (ADR). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.