AFAM Capital’s John Buckingham (Trades, Portfolio) established 18 new holdings during the second quarter, four of which were in retailers.
Managing a portfolio of 192 holdings, Buckingham has 10.5% of his portfolio dedicated to consumer cyclical stocks and 3.2% allocated to consumer defensive stocks, according to GuruFocus data.
Buckingham initiated stakes in Walgreens Boots Alliance Inc. (WBA, Financial), The Kroger Co. (KR, Financial), Amazon.com Inc. (AMZN, Financial) and The Home Depot Inc. (HD, Financial).
Walgreens
Having previously sold out of Walgreens in the first quarter of 2014, Buckingham purchased 12,237 shares for an average price of $82.34 per share, giving it 0.12% portfolio space.
The drugstore chain has a market cap of $86.56 billion; its shares were trading around $80.89 on Friday with a price-earnings (P/E) ratio of 20.44, a price-book (P/B) ratio of 2.82 and a price-sales (P/S) ratio of 0.76.
The Peter Lynch chart below shows the stock is trading above its fair value.
The Deerfield, Illinois-based company reported its third-quarter results on June 29. The company’s EPS increased 5.9% to $1.07. Sales increased 2.1% to $30.1 billion. Walgreens also raised the lower end of its guidance by 8 cents for full-year EPS between $4.98 and $5.08.
GuruFocus ranked Walgreens’ financial strength 6 of 10 and its profitability and growth 7 of 10. The company’s trailing dividend yield is 1.83%, and its forward dividend yield is 1.97%. The dividend payout ratio is 38%.
The Vanguard Health Care Fund (Trades, Portfolio) is Walgreens’ largest shareholder among the gurus with 0.75% of outstanding shares. A total of 18 gurus own the stock.
Kroger
Buckingham bought 37,949 shares of Kroger for an average price of $28.41 per share, expanding the portfolio 0.11%.
The grocery store chain has a market cap of $20.51 billion; its shares were trading around $22.86 on Friday with a P/E ratio of 13.77, a P/B ratio of 3.44 and a P/S ratio of 0.19.
According to the Peter Lynch chart below, the stock is trading slightly below its fair value.
The Cincinnati-based grocer reported its first-quarter results on June 15, posting EPS of 32 cents. The company’s total sales for the quarter increased 4.9% to $36.3 billion. Excluding fuel, total sales grew 2.9% from the prior-year quarter. Kroger will report its earnings for the second quarter on Sept. 8.
GuruFocus ranked the company’s financial strength 5 of 10 and its profitability and growth 7 of 10. The company’s trailing dividend yield is 2.11%, and its forward dividend yield is 2.17%. The dividend payout ratio is 28%.
With 0.22% of outstanding shares, Joel Greenblatt (Trades, Portfolio) is the company’s largest guru shareholder. Pioneer Investments (Trades, Portfolio), Ray Dalio (Trades, Portfolio), Jeff Auxier (Trades, Portfolio), Ken Fisher (Trades, Portfolio), Caxton Associates (Trades, Portfolio), David Dreman (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) are also shareholders.
Amazon
Buckingham purchased 481 shares of Amazon for an average price of $954.78 per share, giving it a portfolio weight of 0.06%.
The e-commerce giant has a market cap of $461.44 billion; its shares were trading around $960.57 on Friday with a P/E ratio of 243.8, a P/B ratio of 19.86 and a P/S ratio of 3.13.
Based on the Peter Lynch chart below, the stock appears to be trading well above its fair value.
The Seattle-based company reported its second-quarter 2017 results on July 27. Revenue of $37.96 billion beat estimates of $37.18 billion, but EPS of 40 cents fell short of the expected $1.42 per share. Shares fell approximately 3% in after-hours trading as a result.
GuruFocus ranked the company’s financial strength 7 of 10 and its profitability and growth 8 of 10. The company does not pay a dividend.
With 0.41% of outstanding shares, Frank Sands (Trades, Portfolio) has the largest holding among the gurus. In all, 35 gurus have a position in the stock.
Home Depot
After exiting a position in Home Depot in the third quarter of 2013, Buckingham initiated a new holding of 2,000 shares. Paying an average of $153.3 per share, the trade expanded the portfolio 0.04%.
The home improvement store has a market cap of $178.94 billion; its shares were trading around $149.67 on Friday with a P/E ratio of 21.5, a P/B ratio of 50.34 and a P/S ratio of 1.86.
The Peter Lynch chart below shows the stock is trading above its fair value.
The Atlanta-based retailer reported its performance for the second quarter on Aug. 15. Revenue of $28.11 billion beat estimates of $27.84 billion and grew 6.2% from the year-ago quarter. EPS of $2.25 beat expectations of $2.22 per share.
GuruFocus ranked the company’s financial strength 6 of 10 and its profitability and growth 8 of 10. The company’s trailing dividend yield is 2.11% and its forward dividend yield is 2.38%. The dividend payout ratio is 44%.
Fisher is the company’s largest guru shareholder with 0.45% of outstanding shares. A total of 21 gurus are shareholders.
Other positions Buckingham established during the quarter include Regency Centers Corp. (REG, Financial), Verizon Communications Inc. (VZ, Financial), Kimco Realty Corp. (KIM, Financial), Deutsche Post AG (DPSGY, Financial) and Alphabet Inc. (GOOG, Financial) (GOOGL, Financial).
Disclosure: I do not own any stocks mentioned.
