Tom Gayner (Trades, Portfolio), the co-CEO of Markel Corp., disclosed his equity portfolio for the second quarter last week.
Concentrating on promising areas where Markel has good understanding and knowledge, the guru’s Virginia-based firm uses a value-oriented approach to stock picking. Gayner also maintains a margin of safety within the investment portfolio and believes that since a stock is part of a business, it is worth what the present value of future cash flows are.
Keeping these ideas in mind, 13F filings show the guru established three new positions during the three months ended June 30, sold out of three stocks and added to or trimmed a number of other existing holdings. His most notable trades included increased bets on Dollar General Corp. (DG, Financial) and LPL Financial Holdings Inc. (LPLA, Financial), a reduction of the SEI Investments Co. (SEIC, Financial) position and the divestment of ESAB Corp. (ESAB, Financial) and Marvell Technology Inc. (MRVL, Financial).
Investors should be aware 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 they 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.
Dollar General
The guru boosted the Dollar General (DG, Financial) investment by 82.36%, investing in 230,000 shares. The transaction had an impact of 0.47% on the equity portfolio. The stock traded for an average price of $197.94 per share during the quarter.
Gayner now holds 509,250 shares in total, accounting for 1.03% of the equity portfolio. GuruFocus estimates he has lost 22.38% on the investment so far.
The Goodlettsville, Tennessee-based company, which owns a chain of discount variety stores, has a $36.25 billion market cap; its shares were trading around $165.27 on Tuesday with a price-earnings ratio of 15.58, a price-book ratio of 6.11 and a price-sales ratio of 0.98.
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 83 out of 100, the GF Score indicates the company has good outperformance potential. While Dollar General received high ratings for profitability, growth and value, the financial strength rank is more moderate and momentum is low.
Of the gurus invested in Dollar General, Barrow, Hanley, Mewhinney & Strauss has the largest stake with 0.96% of outstanding shares. Jim Simons (Trades, Portfolio)’ Renaissance Technologies and Ray Dalio (Trades, Portfolio)’s Bridgewater Associates also have large positions.
LPL Financial
The investor increased the LPL Financial (LPLA, Financial) position by 545.95%, buying 107,389 shares. The transaction impacted the equity portfolio by 0.28%. Shares traded for an average price of $200.28 each during the quarter.
Gayner how holds 127,059 shares in total, which represent 0.33% of the equity portfolio. GuruFocus says he has gained 12.70% on the investment to date.
The financial services company, which is headquartered in San Diego, has a market cap of $17.61 billion; its shares were trading around $230.78 on Tuesday with a price-earnings ratio of 15.70, a price-book ratio of 8.45 and a price-sales ratio of 4.96.
According to the GF Value Line, the stock is significantly undervalued currently.
The GF Score of 78 implies the company is likely to have average performance going forward on the back of high ratings for value and momentum as well as middling marks for profitability, growth and financial strength.
With a 2.39% stake, Steve Mandel (Trades, Portfolio) is the company’s largest guru shareholder. The stock is also being held by First Pacific Advisors (Trades, Portfolio), Steven Romick (Trades, Portfolio), George Soros (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio), Ron Baron (Trades, Portfolio) and several other gurus.
SEI Investments
Gayner slashed the SEI Investments (SEIC, Financial) holding by 70.60%, selling 416,000 shares. The transaction impacted the equity portfolio by -0.30%. During the quarter, the stock traded for an average per-share price of $58.18.
He now holds a total of 173,200 shares, which occupy 0.12% of the equity portfolio. GuruFocus found he has gained around 39.63% on the long-held investment.
The Oaks, Pennsylvania-based investment management company has an $8.20 billion market cap; its shares were trading around $61.96 on Tuesday with a price-earnings ratio of 20.93, a price-book ratio of 4.05 and a price-sales ratio of 4.48.
Based on the GF Value Line, the stock appears to be fairly valued currently.
The GF Score of 93 means the company has high outperformance potential, driven by high ratings for four of the criteria as well as a more moderate value rank.
Chuck Royce (Trades, Portfolio) is the company’s largest guru shareholder with a 1.11% stake. Other guru investors are Simons’ firm, Dalio’s firm, Joel Greenblatt (Trades, Portfolio), Ken Fisher (Trades, Portfolio) and Caxton Associates (Trades, Portfolio).
ESAB
The guru exited the 348,356-share holding in ESAB (ESAB, Financial), impacting the equity portfolio by -0.26%. The stock traded for an average price of $60.62 per share during the quarter.
GuruFocus data shows he gained 24.88% on the investment over its lifetime.
The industrial company headquartered in Maryland, which manufactures welding and cutting equipment and consumables, has a market cap of $4.34 billion; its shares were trading around $72.02 on Tuesday with a price-earnings ratio of 20.88, a price-book ratio of 2.88 and a price-sales ratio of 1.61.
Since being spun off of Enovis in March of 2022, the stock has gained 44.04%.
The GF Score of 26 warns the company has poor performance potential. Having only received ratings for profitability and financial strength, however, its full prospects are not accurately reflected.
Holding a 3.67% stake, Diamond Hill Capital (Trades, Portfolio) is ESAB’s largest guru shareholder. The stock is also being held by Royce, Simons’ firm, PRIMECAP, Keeley-Teton Advisors, LLC (Trades, Portfolio), Greenblatt and Mario Gabelli (Trades, Portfolio).
Marvell Technology
The investor dumped all 160,000 shares of Marvell Technology (MRVL, Financial), which impacted the equity portfolio by -0.09%. During the quarter, shares traded for an average price of $48.50 each.
According to GuruFocus, he lost around 0.86% on the investment.
The Santa Clara, California-based semiconductor company has a $53.29 billion market cap; its shares were trading around $61.96 on Tuesday with a price-book ratio of 3.44 and a price-sales ratio of 9.17.
The GF Value Line suggests the stock is modestly undervalued currently.
Supported by high momentum and growth ratings and more moderate ranks for the other three criteria, the GF Score of 84 indicates the company has good outperformance potential.
Simons’ firm is the company’s largest guru shareholder with a 0.29% stake. Other top guru investors include Fisher, Stanley Druckenmiller (Trades, Portfolio), PRIMECAP, Steven Cohen (Trades, Portfolio), Baron, Jefferies Group (Trades, Portfolio) and Louis Moore Bacon (Trades, Portfolio).
Additional trades and portfolio composition
During the quarter, Gayner entered small positions in Anheuser-Busch InBev SA (BUD, Financial), Choice Hotels International Inc. (CHH, Financial) and Uber Technologies Inc. (UBER, Financial).
The guru’s $8.40 billion equity portfolio, which is composed of 131 stocks, is largely invested in the financial services sector.
