David Winters Sells Stake in Canadian Natural Resources

GuruFocus.com

Sun, Jun 12, 2016, 1:04 PM

- By David Goodloe

David Winters (Trades, Portfolio)' top eight transactions in the first quarter were partial or complete sales of stakes in his portfolio. He made only one new purchase in the quarter, and his two largest reductions were in tobacco stocks.

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Wintersa largest deal of the first quarter was the divestiture of his stake in Canadian Natural Resources (CNQ), an oil and gas company based in Calgary, Alberta. The guru sold his 2,251,197-share stake for an average price of $21.93 per share. The divestiture had a -12.79% impact on Wintersa portfolio.

Canadian Natural Resourcesa leading shareholder among the gurus is T Rowe Price Equity Income Fund (Trades, Portfolio) with a stake of 9,330,500 shares. The stake is 0.85% of Canadian Natural Resourcesa outstanding shares and 1.18% of the guruas total assets.

Canadian Natural Resources has a forward P/E of 43.3, a P/B of 1.5 and a P/S of 3.3. GuruFocus gives Canadian Natural Resources a Financial Strength rating of 4/10 and a Profitability and Growth rating of 6/10 with an ROE of -1.77% that is higher than 76% of the companies in the Global Oil & Gas E&P industry and an ROA of -0.82% that is higher than 78% of the companies in that industry.

Canadian Natural Resources sold for $28.71 per share Friday. The DCF Calculator gives Canadian Natural Resources a fair value of $-3.88.

Winters trimmed his stake in Reynolds American Inc. (RAI), a tobacco company based in Winston-Salem, North Carolina, by nearly 20%. Winters sold 492,740 shares for an average price of $48.99 per share. The transaction had a -5.91% impact on Wintersa portfolio.

The remaining stake of 1,982,420 shares is 0.14% of Reynolds Americanas outstanding shares and 35.79% of Wintersa total assets. Barrow, Hanley, Mewhinney & Strauss is Reynolds Americanas leading shareholder among the gurus with a stake of 7,637,111 shares. The stake is 0.54% of Reynolds Americanas outstanding shares and 0.59% of the guruas total assets.

Reynolds American has a P/E of 10.6, a forward P/E of 19.8, a P/B of 3.5 and a P/S of 5.8. GuruFocus gives Reynolds American a Financial Strength rating of 5/10 and a Profitability and Growth rating of 8/10 with an ROE of 39.81% that is higher than 68% of the companies in the Global Tobacco industry and an ROA of 13.87% that is higher than 67% of the companies in that industry.

Reynolds American sold for $51.14 per share Friday. The DCF Calculator gives Reynolds American a fair value of $62.2 with a margin of safety of 18%.

Winters pared his stake in Altria Group Inc. (MO), a tobacco company based in Henrico County, Virginia, by 31% with the sale of 327,347 shares for an average price of $60.38 per share. The deal had a -4.96% impact on Wintersa portfolio.

The remaining stake of 728,441 shares is 0.04% of Altriaas outstanding shares and 16.38% of Wintersa total assets. Altriaas leading shareholder among the gurus is Barrow, Hanley, Mewhinney & Strauss with a stake of 19,975,752 shares. The stake is 1.02% of Altriaas outstanding shares and 1.91% of the guruas total assets.

Altria has a P/E of 23.8, a forward P/E of 25.9, a P/B of 47.1 and a P/S of 6.8. GuruFocus gives Altria a Financial Strength rating of 6/10 and a Profitability and Growth rating of 8/10 with an ROE of 196.40% that is higher than 94% of the companies in the Global Tobacco industry and an ROA of 16.52% that is higher than 71% of the companies in that industry.

Altria sold for $66.13 per share Friday. The DCF Calculator gives Altria a fair value of $29.75.

Winters reduced his position in Union Pacific Corp. (UNP), the Omaha, Nebraska-based operator of a freight-hauling railroad, by 26%, selling 54,970 shares for an average price of $77.26 per share. The transaction had a -1.12% impact on Wintersa portfolio.

The remaining stake of 155,426 shares is 0.02% of Union Pacificas outstanding shares and 4.47% of Wintersa total assets. Union Pacificas leading shareholder among the gurus is Dodge & Cox with a stake of 12,252,674 shares. The stake is 1.46% of Union Pacificas outstanding shares and 0.95% of Dodge & Coxas total assets.

Union Pacific has a P/E of 16.6, a forward P/E of 15.4, a P/B of 3.7 and a P/S of 3.7. GuruFocus gives Union Pacific a Financial Strength rating of 5/10 and a Profitability and Growth rating of 8/10 with an ROE of 22.15% that is higher than 90% of the companies in the Global Railroads industry and an ROA of 8.47% that is higher than 85% of the companies in that industry.

Union Pacific sold for $88.78 per share Friday. The DCF Calculator gives Union Pacific a fair value of $140.68 with a margin of safety of 37%.

The guru trimmed his holdings in both the GOOGL and GOOG stock components of Alphabet Inc., the Mountain View, California-based parent company of Google, in both cases by more than 21%.

Winters sold 5,315 shares of GOOGL for an average price of $736.08 per share. The deal had a -108% impact on his portfolio.

The remaining stake of 19,921 shares is 5.45% of Wintersa total assets. GOOGLas leading shareholder among the gurus is PRIMECAP Management (Trades, Portfolio) with a stake of 2,581,266 shares is 0.38% of GOOGLas outstanding shares and 2.04% of PRIMECAPas total assets.

Alphabet has a P/E of 30.9, a forward P/E of 18.8, a P/B of 4.1 and a P/S of 6.5. GuruFocus gives Alphabet a Financial Strength rating of 8/10 and a Profitability and Growth rating of 8/10 with an ROE of 14.23% that is higher than 68% of the companies in the Global Internet Content & Information industry and an ROA of 11.94% that is higher than 78% of the companies in that industry.

GOOGL sold for $733.19 per share Friday. The DCF Calculator gives GOOGL a fair value of $697.47.

Winters sold 5,325 shares of GOOG for an average price of $716.19 per share. That deal had a -1.05% impact on his portfolio.

The remaining stake of 20,003 shares is 5.35% of Wintersa total assets. GOOGas leading shareholder among the gurus is Dodge & Cox with a stake of 3,213,014 shares. The stake is 0.47% of GOOGas outstanding shares and 2.34% of Dodge & Coxas total assets.

GOOG sold for $719.41 per share Friday. The DCF Calculator also gives GOOG a fair value of $697.47.

Winters sold more than 15% of his stake in Coca-Cola Co. (KO), the Atlanta-based beverage company. The guru sold 57,231 shares for an average price of $43.47 per share. The transaction had a -0.64% impact on Wintersa portfolio.

The remaining stake of 318,485 shares is 0.01% of Coca-Colaas outstanding shares and 5.3% of Wintersa total assets. With a stake of 400 million shares, Warren Buffett (Trades, Portfolio) is Coca-Colaas leading shareholder among the gurus. The stake is 9.25% of Coca-Colaas outstanding shares and 14.43% of Buffettas total assets.

Coca-Cola has a P/E of 27.7, a forward P/E of 22, a P/B of 8 and a P/S of 4.6. GuruFocus gives Coca-Cola a Financial Strength rating of 6/10 and a Profitability and Growth rating of 7/10 with an ROE of 27.2% that is higher than 88% of the companies in the Global Beverages a Soft Drinks industry and an ROA of 7.93% that is higher than 67% of the companies in that industry.

Coca-Cola sold for $45.99 per share Friday. The DCF Calculator gives Coca-Cola a fair value of $18.93.

Winters sold his 19,199-share stake in Norfolk Southern Corp. (NSC), the Norfolk, Virginia-based parent company of the Norfolk Southern Railway, for an average price of $75.6 per share. The divestiture had a -0.42% impact on Wintersa portfolio.

Barrow, Hanley, Mewhinney & Strauss is Norfolk Southernas leading shareholder among the gurus with a stake of 3,132,264 shares. The stake is 1.06% of Norfolk Southernas outstanding shares and 0.4% of the guruas total assets.

Norfolk Southern has a P/E of 15.6, a forward P/E of 13.8, a P/B of 2 and a P/S of 2.5. GuruFocus gives Norfolk Southern a Financial Strength rating of 5/10 and a Profitability and Growth rating of 8/10 with an ROE of 13.38% that is higher than 76% of the companies in the Global Railroads industry and an ROA of 4.87% that is higher than 67% of the companies in that industry.