Gurus' Best-Loved Stocks in the Worst-Performing Sector of 2014
All sectors of the economy have so far gained this year with Utilities performing best, rising more than 15%. The worst-performing sector was Consumer Cyclical, which gained a mere 0.23%. Consumer Cyclical stocks consist of luxury goods and services that people generally indulge in only when the economy is good.
While value investors tend to gravitate toward beat-down sectors, few tracked by GuruFocus have flocked to Consumer Cyclical. These are the stocks that, according to the S&P 500 Screener, gurus like the most out of the sector: Ebay (EBAY), Discovery Communications (DISCA), Bed Bath & Beyond (BBBY) and Coach (COH).
Ebay (EBAY)
Thirteen gurus own shares of Ebay stock. Seth Klarman (Trades, Portfolio), Zeke Ashton (Trades, Portfolio) and Mark Hillman (Trades, Portfolio) all started new stakes, while Louis Moore Bacon (Trades, Portfolio) increased his position the most, by 85.4% to 123,763 or 0.15% of his portfolio.
Ebay Inc. was formed as a sole proprietorship in September 1995 and was incorporated in California in May 1996. Ebay Inc. has a market cap of $64.96 billion; its shares were traded at around $52.31 with and P/S ratio of 3.96. Ebay Inc. had an annual average earnings growth of 18.10% over the past 10 years. GuruFocus rated Ebay Inc. the business predictability rank of 4-star.
Discovery Communications (DISCA)
Six gurus hold shares of Discover Communications in their portfolios. Five started new positions in the second quarter, the largest of which were started by Frank Sands (Trades, Portfolio), Ray Dalio (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio). Jim Simons (Trades, Portfolio) made the greatest increase to his holding, raising it by 332% to 627,650 shares.
Discovery Communications Inc. was formed on Sept. 17, 2008, in connection with Discovery Holding Company and Advance/Newhouse Programming Partnership combining their respective ownership interests in Discovery Communications Holding LLC and exchanging those interests with and into Discovery. Discovery Communications Inc. has a market cap of $11.2 billion; its shares were traded at around $38.12 with a P/E ratio of 11.60 and P/S ratio of 2.27. Discovery Communications Inc. had an annual average earnings growth of 19.50% over the past five years.
Bed Bath & Beyond (BBBY)
Fifteen gurus hold shares of Bed Bath & Beyond, with five making new purchases, the largest of which were by Jim Simons (Trades, Portfolio), Meridian Funds (Trades, Portfolio) and Hotchkis & Wiley. The largest increase was made by First Pacific Advisors (Trades, Portfolio), who moved up their stake by 47% in the second quarter.