Mariko Gordon Gains 2 New Holdings in 2nd Quarter

Guru invests in golfing equipment company, RV manufacturer

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Aug 16, 2017
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Daruma Capital Management founder Mariko Gordon (Trades, Portfolio) gained two new holdings during the second quarter: Callaway Golf Co. (ELY, Financial) and Thor Industries Inc. (THO, Financial).

Managing a portfolio of 59 stocks valued at $1.677 billion, Gordon invests largely in the technology sector, which represents 24.4% of her holdings.

Callaway Golf

In her largest new purchase for the quarter, Gordon bought 3.8 million shares of Callaway Golf for an average price of $12.28 per share, giving it 2.91% portfolio space.

The golfing equipment manufacturer has a market cap of $1.19 billion; its shares were trading around $12.65 on Wednesday with a price-earnings (P/E) ratio of 6.93, a price-book (P/B) ratio of 1.84 and a price-sales (P/S) ratio of 1.27.

The Peter Lynch chart below shows the stock is trading below its fair value.

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The Carlsbad, California-based company reported its second-quarter results on Aug. 3. Net sales for the quarter were $305 million, up 24% from the comparable quarter of 2016. Guidance for full-year EPS was increased from the range of 31 cents to 37 cents to between 40 cents and 45 cents.

GuruFocus ranked Callaway Golf’s financial strength 8 of 10 and its profitability and growth 4 of 10. The company’s trailing dividend yield and forward dividend yield are both 0.31%. The dividend payout ratio is 2%.

With her purchase, Gordon became the company’s largest guru shareholder with 4.05% of outstanding shares. Jim Simons (Trades, Portfolio), Diamond Hill Capital (Trades, Portfolio), Steven Cohen (Trades, Portfolio), Chuck Royce (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) are also shareholders.

Thor Industries

Gordon purchased 34,284 shares of Thor Industries for an average price of $96.81 per share, expanding the portfolio 0.21%.

The recreational vehicles manufacturer has a market cap of $5.55 billion; its shares were trading around $105.55 on Wednesday with a P/E ratio of 16.5, a P/B ratio of 3.77 and a P/S ratio of 0.84.

According to the Peter Lynch chart below, the stock is trading above its fair value.

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The Elkhart, Indiana-based company released its results for the third quarter of 2017 on June 5. The company posted record revenues of $2.02 billion, up 56.9% from the prior-year quarter. Diluted EPS of $2.11 increased 41.6% from $1.49 a year ago.

GuruFocus ranked Thor’s financial strength 7 of 10 and its profitability and growth 7 of 10. The company’s trailing dividend yield is 1.25% and its forward dividend yield is 1.24%. The dividend payout ratio is 20%.

Among the gurus invested in Thor, Royce has the largest holding with 1.75% of outstanding shares. A total of 11 gurus own the stock.

Positions Gordon added to during the quarter include OraSure Technologies Inc. (OSUR, Financial), Red Robin Gourmet Burgers Inc. (RRGB, Financial), Pros Holdings Inc. (PRO, Financial), Planet Fitness Inc. (PLNT, Financial), Newpark Resources Inc. (NR, Financial), Ring Energy Inc. (REI, Financial), Xperi Corp. (XPER, Financial) and NN Inc. (NNBR, Financial).

Disclosure: I do not own any stocks mentioned.