Aptly-Named Contrarius Investment Making Some Contrarian Moves
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As hedge funds’ Q1 13F filings continue to flutter in, we have a unique opportunity to get a hand-on look at each of these major players’ best equity picks. See the original 13F of Contrarius Investment, the fund we'll be focusing on, here.
The top dog
Apple (NASDAQ: AAPL) has kept its number one spot in the fund’s top five equity holdings, and actually saw the size of its position increase from 208,974 shares to 296,212, leading to a subtler increase in value of 17.90%. The position is now worth $131.121 million, and like more prominent investors David Einhorn and Ken Fisher, Apple is still attractive as a value play. Trading at a trailing P/E ratio of 11.07 and a forward ratio of 10.52, Cupertino is expected to generate EPS growth of 19-20% a year over the next half-decade—lower than previous years, but still up there in comparison to its competitors.
The best of the rest
Next is Gannett (NYSE: GCI). The media and marketing solutions company has seen its stake increased by 58,106 shares to a whopping 5,638,722, according to the latest 13F. The value of the holding has increased by 22.70% to $123.319 million. Gannett has a beta of 1.53 and an EPS of $1.95, with a P/E ratio of 10.50 compared to a forward P/E of 8.25. Analysts are positive overall on the stock as a likely value play, with five recommending it as a Buy, one opting for a Strong Buy, and 6 calling for a Hold.
The New York Times (NYSE: NYT) is the third largest equity holding listed in the fund’s 13F, with an increase in the quantity of shares from 529,851 to 12,126,484 quarter-over-quarter. The value of the fund’s stake has increased by 20.14% to $118.840 million. The stock has recently shown a quarterly EPS of $0.04, confirming analyst estimations and Contrarius’s contrarian conviction (say that five times fast!). Trading at a trailing P/E of 15.47 and a forward P/E of 22.83, the company currently has mixed feedback from analysts, with the majority recommending it as a Hold at the moment.
During the first quarter, Contrarius raised its stake in NVIDIA (NASDAQ: NVDA) by 327,217 shares to 6,113,119, according to the 13F. Meanwhile, the value of the holding has increased by 10.57% to $78.431 million. NVIDIA has a trailing EPS of $0.90. The P/E ratio for the previous 12 months is 15.50 with a forward ratio of 16.98. With a beta of 1.64, NVIDIA has shown a quarterly revenue growth rate on a year-to-year basis of 16.10%.
And last, but by no means least, the fund reduced its stake Google (NASDAQ: GOOG) from 80,126 to 60,212 shares last quarter, but still keeps the tech giant in its top five. The value of the holding fell by 15.63% to $47.820 million, in a move that can only be explained as profit-taking at its finest. Google has a P/E ratio of 25.99, with a forward rate estimated at 16.27. A beta of 1.16 is also notable, and Google has increased its revenue by 31.20% on a year-over-year basis, according to its latest quarterly financials.
While most pundits assume that the nature of these filings — specifically that they are issued at a 45-day delay — makes piggybacking impossible, our research has actually shown that the opposite is true; see what we mean here.
In short, each of the investments discussed above has its own bullish theses moving forward; Google’s not the cheapest tech giant out there, but it does have momentum—and a new streaming music service—on its side. NVIDIA and Apple, meanwhile, operate in this space with a bit more value, while Gannett and The New York Times are clear contrarian bets on two media stocks that Mr. Market generally hates.
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Meena Krishnamsetty has no position in any stocks mentioned. The Motley Fool recommends Apple, Google, and NVIDIA. The Motley Fool owns shares of Apple and Google. 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. Is this post wrong? Click here. Think you can do better? Join us and write your own!