When picking stocks, Wallace Weitz (Trades, Portfolio), head of Weitz Investment Management, is known for combining Benjamin Graham's principles of price sensitivity and insistence on margin of safety with a conviction that qualitative factors that allow the company to control its future can be more important than statistical metrics like book value and earnings.
As of the end of the second quarter, the industrial sector had the second-smallest representation in his Omaha, Nebraska-based firm’s $1.86 billion 13F equity portfolio with a weight of 2.28%.
However, the industrials space may offer good value opportunities currently as the sector has gained around 8.51% year to date.
According to the 13F filing for the three months ended June 30, Weitz’s industrials holdings are Honeywell International Inc. (HON, Financial), Heico Corp. (HEI.A, Financial) and IDEX Corp. (IEX, 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.
Honeywell International
The investor left his Honeywell International (HON, Financial) holding alone for the second quarter at 11,500 shares. It accounts for 0.13% of the equity portfolio. GuruFocus estimates Weitz has gained 16.36% on the investment so far.
The Charlotte, North Carolina-based conglomerate, which operates in the areas of aerospace, building technologies, performance materials and safety and productivity solutions, has a $128.49 billion market cap; its shares were trading around $193.53 on Friday with a price-earnings ratio of 23.95, a price-book ratio of 7.45 and a price-sales ratio of 3.62.
The GF Value Line suggests the stock is modestly undervalued currently based on its historical ratios, past financial performance and analysts’ future earnings projections.
At 78 out of 100, the GF Score indicates the company is likely to have average performance going forward on the back of high ratings for profitability, value and momentum, middling marks for financial strength and a low growth rank.
Of the gurus invested in Honeywell, Diamond Hill Capital (Trades, Portfolio) has the largest stake with 0.17% of its outstanding shares. The Scotia Canadian Dividend Fund (Trades, Portfolio), Mairs and Power (Trades, Portfolio), Jims Simons’ Renaissance Technologies, Mario Gabelli (Trades, Portfolio) and PRIMECAP Management (Trades, Portfolio) also have notable positions in the stock.
Heico
Weitz left his Heico (HEI.A, Financial) position unchanged at 183,100 shares, occupying 1.38% of the equity portfolio. GuruFocus data shows he has gained around 47.88% on the investment to date.
The aerospace and electronics company, which is headquartered in Hollywood, Florida, has a market cap of $20.11 billion; its shares traded around $132.56 on Friday with a price-earnings ratio of 46.19, a price-book ratio of 6.28 and a price-sales ratio of 6.95.
According to the GF Value Line, the stock is modestly undervalued currently.
The GF Score of 90 implies the company has good outperformance potential, driven by high ratings for all five criteria.
With 0.28% of outstanding shares, Tom Gayner (Trades, Portfolio) is Heico’s largest guru shareholder. Other top guru investors include Ron Baron (Trades, Portfolio), Steven Cohen (Trades, Portfolio) and Simons’ firm.
IDEX
During the second quarter, the guru did not make any changes to the 66,800-share IDEX (IEX, Financial) investment. It makes up 0.77% of the equity portfolio. GuruFocus found he has gained about 34.60% on the investment.
The Northbrook, Illinois-based company, which manufactures fluidics systems, optics systems, fire and rescue equipment and other specialty engineered products, has a $16.16 billion market cap; its shares were trading around $213.71 on Friday with a price-earnings ratio of 27.65, a price-book ratio of 4.93 and a price-sales ratio of 4.87.
Based on the GF Value Line, the stock appears to be modestly undervalued currently.
Supported by high ratings for four of the criteria as well as a more moderate value rank, the GF Score is 91. As such, it has high outperformance potential.
Holding 0.55% of its outstanding shares, Ken Fisher (Trades, Portfolio) is the company’s largest guru shareholder. IDEX is also being held by Baron, PRIMECAP, Simons’ firm, Gabelli, Paul Tudor Jones (Trades, Portfolio) and many others.
