Chris Davis (Trades, Portfolio)’ Davis Selected Advisors disclosed its equity portfolio for the first quarter earlier this week.
Taking a patient, long-term approach, the guru’s Tucson, Arizona-based firm seeks to invest in durable, well managed companies that can be purchased at value prices, preferably when they are out of favor.
Based on these criteria, 13F filings for the three months ended March 31 show Davis established one new position, exited nine stocks and added to or trimmed a number of other existing investments. His most notable trades included an addition to the Amazon.com Inc. (AMZN, Financial) stake as well as reductions to the Quest Diagnostics Inc. (DGX, Financial), Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial), Cigna Group (CI, Financial) and Alibaba Group Holding Ltd. (BABA, Financial) holdings.
Investors should be aware that 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but the reports can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Amazon
With an impact of 0.33% on the equity portfolio, Davis increased his Amazon (AMZN, Financial) position by 6.12%, buying 475,823 shares. The stock traded for an average price of $96.61 per share during the quarter.
The guru now holds 8.25 million shares, which account for 5.64% of the equity portfolio and is now the sixth-largest holding. GuruFocus estimates he has gained 170.23% on the long-held investment.
The Seattle-based e-commerce company has a $1.09 trillion market cap; its shares were trading around $105.93 on Tuesday with a price-earnings ratio of 252.21, a price-book ratio of 7.03 and a price-sales ratio of 2.08.
The GF Value Line suggests the stock is significantly undervalued currently based on its historical ratios, past financial performance and analysts’ future earnings projections.
At 93 out of 100, the GF Score indicates the company high outperformance potential on the back of solid ratings for profitability, growth, GF Value and momentum as well as a more moderate financial strength rank.
Of the many gurus invested in Amazon, Ken Fisher (Trades, Portfolio) has the largest stake with 0.50% of its outstanding shares. Baillie Gifford (Trades, Portfolio), Frank Sands (Trades, Portfolio), Dodge & Cox, Andreas Halvorsen (Trades, Portfolio), Al Gore (Trades, Portfolio)’s Generation Investment, the Harbor Capital Appreciation Fund (Trades, Portfolio) and Jim Simons (Trades, Portfolio)’ Renaissance Technologies, among many others, also have significant holdings.
Quest Diagnostics
The guru curbed the Quest Diagnostics (DGX, Financial) stake by 17.27%, shedding 317,071 shares. The transaction impacted the equity portfolio by -0.34%. Shares traded for an average price of $143.07 each during the quarter.
Davis now holds 1.52 million shares in total, which occupy 1.42% of the equity portfolio. GuruFocus found he has gained around 43.95% on the investment over its lifetime.
The clinical laboratory operator, which is headquartered in Secaucus, New Jersey, has a market cap of $14.92 billion; its shares were trading around $133.24 on Tuesday with a price-earnings ratio of 19.65, a price-book ratio of 2.47 and a price-sales ratio of 1.62.
According to the GF Value Line, the stock is fairly valued currently.
The GF Score of 87 means the company has good outperformance potential, driven by high ratings for profitability, growth and momentum and more moderate financial strength and GF Value ranks.
With a 1.36% stake, Davis is the company’s largest guru shareholder. Other guru investors include Jeremy Grantham (Trades, Portfolio), Simons’ firm, Steven Cohen (Trades, Portfolio), Ray Dalio (Trades, Portfolio)’s Bridgewater Associates, Robert Olstein (Trades, Portfolio), Jeff Auxier (Trades, Portfolio) and John Hussman (Trades, Portfolio).
Berkshire Hathaway
The investor trimmed the position in Berkshire Hathaway (BRK.A, Financial) by 3.46%, selling 73 Class A shares. The transaction had an impact of -0.23% on the equity portfolio. During the quarter, the stock traded for an average per-share price of $466,851.
Davis now holds a total of 2,036 shares, which make up 6.26% of the equity portfolio. As his fourth-largest holding, GuruFocus says he has gained around 101.49% on the investment thus far.
The Omaha, Nebraska-based insurance conglomerate, which is headed by Warren Buffett (Trades, Portfolio), has a $718.02 billion market cap; its shares were trading around $497,886 on Tuesday with a price-book ratio of 1.54 and price-sales ratio of 3.13.
Based on the GF Value Line, the stock appears to be modestly overvalued currently.
Further, the GF Score of 60 implies the company may have poor future performance potential, weighed down by low growth and GF Value ranks and middling marks for financial strength and profitability. The momentum rating is high, however.
Tom Russo (Trades, Portfolio) is the company’s largest guru shareholder with 0.18% of its outstanding shares. Tom Gayner (Trades, Portfolio), First Eagle Investment (Trades, Portfolio), Tweedy Browne (Trades, Portfolio), Ruane Cunniff (Trades, Portfolio), Francis Chou (Trades, Portfolio), Mario Gabelli (Trades, Portfolio) and several other gurus also have positions in Berkshire’s Class A stock.
Cigna Group
Davis reduced his holding of Cigna (CI, Financial) by 5.55%, dumping 102,042 shares. The transaction impacted the equity portfolio by -0.23%. The stock traded for an average price of $291.37 per share during the quarter.
The guru now holds 1.74 million shares, which represent 2.94% of the equity portfolio. GuruFocus data shows he has gained around 34.32% on the investment.
The health insurance company headquartered in Bloomfield, Connecticut has a market cap of $78.52 billion; its shares were trading around $265.37 on Tuesday with a price-earnings ratio of 12.10, a price-book ratio of 1.77 and a price-sales ratio of 0.44.
The GF Value Line suggests the stock is fairly valued currently.
The company also has good outperformance potential with a GF Score of 86. While it received high ratings for two of the criteria, the financial strength, GF Value and momentum ranks are more moderate.
Holding a 3.89% stake, Dodge & Cox is Cigna’s largest guru shareholder. Larry Robbins (Trades, Portfolio) also has a notable position.
Alibaba
The guru slashed his Alibaba (BABA, Financial) position by 59.08%, selling 361,763 shares. The transaction had an impact of -0.22% on the equity portfolio. During the quarter, shares traded for an average price of $100.17 each.
The investor now holds 250,591 shares, which reflect _% of the equity portfolio. Davis has lost an estimated 14.20% on the investment to date.
The Chinese e-commerce giant has a $211.37 billion market cap; its shares were trading around $81.69 on Tuesday with a price-earnings ratio of 46.05, a price-book ratio of 1.51 and a price-sales ratio of 1.71.
According to the GF Value Line, the stock is significantly undervalued currently.
The retail company has good outperformance potential based on its GF Score of 87. While its profitability, growth and financial strength got high ratings, the GF Value was more moderate and the momentum rank was low.
Of the gurus invested in Alibaba, David Herro (Trades, Portfolio) has the largest stake with 1.38% of its outstanding shares. PRIMECAP Management (Trades, Portfolio), Dodge & Cox, Philippe Laffont (Trades, Portfolio), Fisher, Gore’s firm, the iShares MSCI ACWI ex. U.S. ETF, Cohen, Ron Baron (Trades, Portfolio) and Sarah Ketterer (Trades, Portfolio) also have large holdings.
Additional trades and portfolio performance
During the quarter, Davis also entered a new position in Community Healthcare Trust Inc. (CHCT, Financial), cut back on the Meta Platforms Inc. (META, Financial) and Wells Fargo & Co. (WFC, Financial) holdings, boosted JD.com Inc. (JD, Financial) and Baidu Inc. (BIDU, Financial) and exited Raytheon Technologies Corp. (RTX, Financial).
The guru’s $15.13 billion equity portfolio, which is composed of 101 stocks, is most heavily invested in the financial services sector at 42.41%.
In 2022, the firm returned -8.91%, significantly outperforming the S&P 500 Index’s -18.11% return.
