K.J. Harrison & Partners Inc – Portfolio Analysis 1Q-2014

June 16, 2014
K.J. Harrison & Partners INC manages $336,980,000 in AUM and concentrates its investments in the Financial (29.1% of portfolio) and Technology (20.3%) industries. In the last quarter ended in 03/31/2014, K.J. Harrison & Partners INC initiated positions in 25 companies while sold 10 core positions. The fund shows a positive return in the last 4 quarters of 15.44% explained by its concentration in the top 10 positions, which equal 24.39% of the portfolio. Let’s analyze key activity from K.J. Harrison & Partners INC last quarterly SEC 13F quarterly filling:
 

Top 5 Holdings

K.J. Harrison & Partners INC’s top five holdings are:

  • Cameco Corp. (CCJ)
  • Intel Corporation (INTC),
  • Microsoft Corporation (MSFT)
  • General Electric Co. (GE) and
  • JPMorgan Chase & Co. (JPM).

The fund is very bullish on Cameco Corp., allocating 2.9% of the portfolio. In the last quarter this top position increased by 12.6% and represents and market value of $9673000.0. The key metrics to analyze in a company are the Return on Equity (ROE) and Return on Assets (ROA). The first analyzes how much profitability the owners of the firm can extract from the core business while the second measures the return the business generates over its assets. Some investors compare both metrics to the cost of capital or WACC to evaluate if the company truly generates value for shareholders. We will focus on evaluating both the ROE and ROA. In the case of CCJ, it has a below than average ROE of 5.96% and ROA of 3.96%. Revenue growth has been 4.70% and EPS growth of -14.80%. Cameco Corp. has operating margins of 10.85% and net margin of 13.06%. It trades at 19.20x earnings and 3.20 earnings yield.

K.J. Harrison & Partners INC holds Intel Corporation and in the last quarter they increased the position by 19.5%. Intel Corporation has a double-digit operating margins of 23.32% and net profit margin of 18.25%. ROE is strong at 16.51% and ROA is 10.42%. The company has a double-digit 3 year revenue growth of 10.50% and EPS growth of -2.00%. It trades at 16.00x P/E and 8.10 earnings yield. The fund slightly decreased its position in Microsoft Corporation, a company that has double-digit ROE of 27.69% and high ROA of 15.35%. The company has grown top line at 9.50 and EPS at 7.10% in the past three years. In the last quarter K.J. Harrison & Partners slightly decreased the position by -8.5%.
The fourth position, General Electric Co. remained almost unchanged by 38.8%. GE has a below than average ROE of 10.00% and single-digit net profit margin of 8.94%. JPMorgan Chase & Co. is the fund’s fifth position, representing 2.4% of the portfolio. In the last quarter the fund reduced the position in this company. JPM has a not an ideal return on equity of 8.49% and operating margin of 26.82%.

Biggest New Buys

In the last quarterly filling, K.J. Harrison & Partners INC reported new positions in:

  • International Game Technology (IGT)
  • Telephone & Data Systems Inc. (TDS)
  • F5 Networks, Inc. (FFIV) and
  • Ocwen Financial Corp. (OCN).

International Game Technology has a ROE of 21.74%, which is higher than my desired threshold of 15% I look when analyze companies. The fund invested in $3412000.0 in this company. Telephone & Data Systems Inc. has an operating margin of 4.80% and K.J. Harrison & Partners allocated 0.3484% of its portfolio in this company. FFIV has a high P/E of 31.10 and 3 year revenue growth of 19.80%. This position represents 0.3466%. Ocwen Financial Corp. has double-digit operating margins of 16.45% and trades at 16.10x profits.

Major positions closed

The fund liquidated the entire position in the following stocks:

  • Anheuser-Busch InBev (BUD)
  • ADT CORP (ADT),
  • Masonite International CORP (DOOR) and
  • Canadian Natural Resources Limited (CNQ).

Anheuser-Busch InBev represented 1% of the previous portfolio while ADT, Masonite International and CNQ represented 0.6440%, 0.3872% and 0.2865% respectively. None of the liquidated positions were more than 5% of the previous portfolio which means that K.J. Harrison & Partners INC did not liquidate any major holding.

BTIM CORP. – Portfolio Analysis 03/31/2014

June 16, 2014

BTIM CORP. – Portfolio Analysis 03/31/2014

BTIM CORP. manages $6,732,129,000 in AUM and concentrates its investments in the TECHNOLOGY (20.0% of portfolio) and FINANCIAL (19.5%) industries. In the last quarter ended in 03/31/2014, BTIM CORP. initiated positions in 8 companies while selling 16 core positions. The fund shows a positive return in the last 4 quarters of 9.93% explained by its concentration in the top 10 positions, which equal 10.89% of the portfolio. Let’s analyze key activity from BTIM CORP. last quarterly 13F filling:

Top 5 Holdings

BTIM CORP.’s top five holdings are T. Rowe Price Group, Inc. (TROW), Exxon Mobil Corp. (XOM), W.W. Grainger, Inc. (GWW), Donaldson Company, Inc. (DCI) and Microsoft Corporation (MSFT). The fund is very bullish on T. Rowe Price Group, Inc., allocating 1.3% of the portfolio. In the last quarter this top position slightly increased by 1.1% and represents and market value of $86175000.0. The key metrics to analyze in a company are the Return on Equity (ROE) and Return on Assets (ROA). The first analyzes how much profitability the owners of the firm can extract from the core business while the second measures the return the business generates over its assets. Some investors compare both metrics to the cost of capital or WACC to evaluate if the company truly generates value for shareholders. We will focus on evaluating both the ROE and ROA. In the case of TROW, it has a strong ROE of 21.75% and ROA of 20.82%. Revenue growth has been 13.60% and EPS growth of 15.40%. T. Rowe Price Group, Inc. has operating margins of 47.00% and net margin of 30.07%. It trades at 20.10x earnings and 8.70 earnings yield. BTIM CORP. holds Exxon Mobil Corp. and in the last quarter they slightly decreased the position by -3.8%. Exxon Mobil Corp. has a double-digit operating margins of 13.17% and net profit margin of 7.43%. ROE is strong at 18.72% and ROA is 9.39%. The company has a single-digit 3 year revenue growth of 8.20% and EPS growth of 5.80%. It trades at 14.00x P/E and 12.30 earnings yield. The fund slightly increased its position in W.W. Grainger, Inc., a company that has double-digit ROE of 24.52% and high ROA of 15.13%. The company has grown top line at 10.30 and EPS at 16.80% in the past three years. In the last quarter BTIM CORP. slightly increased the position by 1.1%. The fourth position, Donaldson Company, Inc. slightly went up by -0.3%. DCI has a strong ROE of 22.80% and double-digit net profit margin of 10.15%. Microsoft Corporation is the fund’s fifth position, representing 1.1% of the portfolio. In the last quarter the fund increased the position in this company. MSFT has a very good return on equity of 27.69% and operating margin of 34.38%.

Biggest New Buys

In the last quarterly filling, BTIM CORP. reported new position in TUMI HOLDINGS, INC. (TUMI), Air Products & Chemicals Inc. (APD), Cyberonics Inc. (CYBX) and DIRECTV (DTV). TUMI HOLDINGS, INC. has a ROE of 14.83%, which is lower than my desired threshold of 15% I look when analyze companies. The fund invested in $35136000.0 in this company. Air Products & Chemicals Inc. has an operating margin of 13.01% and BTIM CORP. allocated 0.3423% of its portfolio in this company. CYBX has a high P/E of 33.10 and 3 year revenue growth of 15.80%. This position represents 0.3267%. DIRECTV has double-digit operating margins of 16.22% and trades at 16.30x profits.

Major positions closed

The fund liquidated the entire position in Roche Holding AG (RHHBY), SODASTREAM (SODA), RECKITT BENCKISER PLC SPONSORED (RBGPY) and NIC Inc. (EGOV). Roche Holding AG represented 0.5842% of the previous portfolio while SODASTREAM, RECKITT BENCKISER PLC SPONSORED and EGOV represented 0.4073%, 0.3523% and 0.3053% respectively. None of the liquidated positions were more than 5% of the previous portfolio which means that BTIM CORP. did not liquidate any major holding.

MU INVESTMENTS COMPANY ., LTD. – Portfolio Analysis 03/31/2014

June 16, 2014

MU INVESTMENTS COMPANY ., LTD. – Portfolio Analysis 03/31/2014

MU INVESTMENTS COMPANY ., LTD. manages $215,762,000 in AUM and concentrates its investments in the SERVICES (23.3% of portfolio) and TECHNOLOGY (18.5%) industries. In the last quarter ended in 03/31/2014, MU INVESTMENTS COMPANY ., LTD. initiated positions in 17 companies while selling 28 core positions. The fund shows a positive return in the last 4 quarters of 17.3% explained by its concentration in the top 10 positions, which equal 24.53% of the portfolio. Let’s analyze key activity from MU INVESTMENTS COMPANY ., LTD. last quarterly 13F filling:

Top 5 Holdings

MU INVESTMENTS COMPANY ., LTD.’s top five holdings are Apple Inc. (AAPL), Microsoft Corporation (MSFT), United Technologies Corp. (UTX), 3M Co. (MMM) and Oracle Corp. (ORCL). The fund is very bullish on Apple Inc., allocating 3.5% of the portfolio. In the last quarter this top position slightly decreased by -5.8% and represents and market value of $7471000.0. The key metrics to analyze in a company are the Return on Equity (ROE) and Return on Assets (ROA). The first analyzes how much profitability the owners of the firm can extract from the core business while the second measures the return the business generates over its assets. Some investors compare both metrics to the cost of capital or WACC to evaluate if the company truly generates value for shareholders. We will focus on evaluating both the ROE and ROA. In the case of AAPL, it has a strong ROE of 29.98% and ROA of 17.89%. Revenue growth has been 37.50% and EPS growth of 37.90%. Apple Inc. has operating margins of 28.67% and net margin of 21.67%. It trades at 2.20x earnings and 9.60 earnings yield. MU INVESTMENTS COMPANY ., LTD. holds Microsoft Corporation and in the last quarter they slightly decreased the position by -5.4%. Microsoft Corporation has a double-digit operating margins of 34.38% and net profit margin of 28.08%. ROE is strong at 27.69% and ROA is 15.35%. The company has a single-digit 3 year revenue growth of 9.50% and EPS growth of 7.10%. It trades at 15.50x P/E and 10.00 earnings yield. The fund slightly decreased its position in United Technologies Corp., a company that has double-digit ROE of 17.95% and weak ROA of 6.31%. The company has grown top line at 6.50 and EPS at 10.90% in the past three years. In the last quarter MU INVESTMENTS COMPANY ., LTD. slightly decreased the position by -3.4%. The fourth position, 3M Co. remained almost unchanged by -1.6%. MMM has a strong ROE of 26.62% and double-digit net profit margin of 15.09%. Oracle Corp. is the fund’s fifth position, representing 2.2% of the portfolio. In the last quarter the fund reduced the position in this company. ORCL has a very good return on equity of 24.47% and operating margin of 39.49%.

Biggest New Buys

In the last quarterly filling, MU INVESTMENTS COMPANY ., LTD. reported new position in MICHAEL KORS HOLDINGS LTD (KORS), THE PRICELINE GROUP INC COMMON (PCLN), Perrigo Co. (PRGO) and Constellation Brands Inc. (STZ). MICHAEL KORS HOLDINGS LTD has a ROE of 36.62%, which is higher than my desired threshold of 15% I look when analyze companies. The fund invested in $492000.0 in this company. THE PRICELINE GROUP INC COMMON has an operating margin of 35.51% and MU INVESTMENTS COMPANY ., LTD. allocated 0.1988% of its portfolio in this company. PRGO has a high P/E of 73.20 and 3 year revenue growth of 15.30%. This position represents 0.1831%. Constellation Brands Inc. has double-digit operating margins of 50.08% and trades at 8.40x profits.

Major positions closed

The fund liquidated the entire position in Scholastic Corporation (SCHL), Alcoa, Inc. (AA), HARRIS TEETER SUPERMARKETS INC (HTSI) and Greif, Inc. (GEF). Scholastic Corporation represented 0.2254% of the previous portfolio while Alcoa, Inc., HARRIS TEETER SUPERMARKETS INC and GEF represented 0.2107%, 0.1952% and 0.1892% respectively. None of the liquidated positions were more than 5% of the previous portfolio which means that MU INVESTMENTS COMPANY ., LTD. did not liquidate any major holding.

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