Robert Olstein's Firm Buys 4 Stocks in the 1st Quarter

Firm’s top new buys include Facebook and Buffett’s conglomerate Continue reading... Read More...

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Olstein Capital Management, the firm co-founded by Robert Olstein (Trades, Portfolio), disclosed this week that it established four new positions during the first quarter: Facebook Inc. (NASDAQ:FB), Berkshire Hathaway Inc. (NYSE:BRK.A)(NYSE:BRK.B), Hologic Inc. (NASDAQ:HOLX) and Automatic Data Processing Inc. (NASDAQ:ADP).” data-reactid=”12″>Olstein Capital Management, the firm co-founded by Robert Olstein (Trades, Portfolio), disclosed this week that it established four new positions during the first quarter: Facebook Inc. (NASDAQ:FB), Berkshire Hathaway Inc. (NYSE:BRK.A)(NYSE:BRK.B), Hologic Inc. (NASDAQ:HOLX) and Automatic Data Processing Inc. (NASDAQ:ADP).

The firm selects stocks using a “defense first” approach: Olstein peruses the company’s financial statements to access financial strength and downside risk. The firm seeks companies that generate more cash flow than necessary to sustain the business, avoid aggressive accounting practices and demonstrate fundamentals that show high financial strength.

As of quarter-end, the firm’s $455 million equity portfolio contains 101 stocks with a turnover ratio of 19%. The top three sectors in terms of weight are industrials, financial services and technology, with weights of 19.62%, 17.66% and 15.49%.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Facebook” data-reactid=”33″>Facebook

The firm purchased 30,400 shares of Facebook, giving the position 1.11% weight in the equity portfolio. Shares averaged $196.62 during the first quarter.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="GuruFocus ranks the Menlo Park, California-based social media giant's financial strength 8 out of 10 on the back of robust interest coverage, a strong Altman Z-Score of 13.11 and debt ratios that are outperforming over 60% of global competitors.” data-reactid=”46″>GuruFocus ranks the Menlo Park, California-based social media giant’s financial strength 8 out of 10 on the back of robust interest coverage, a strong Altman Z-Score of 13.11 and debt ratios that are outperforming over 60% of global competitors.

Gurus with large holdings in Facebook include Chase Coleman (Trades, Portfolio)’s Tiger Global Management and Andreas Halvorsen (Trades, Portfolio).

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Berkshire Hathaway” data-reactid=”70″>Berkshire Hathaway

The firm purchased 25,000 Class B shares of Berkshire Hathaway, giving the position 1% weight in the equity portfolio. Shares averaged $213.25 during the first quarter.

The Omaha, Nebraska-based conglomerate seeks “good companies at fair prices” according to co-managers Warren Buffett (Trades, Portfolio) and Charlie Munger (Trades, Portfolio)’s four-criterion investing approach: understandable business, high economic moat, competent management and attractive share prices.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Hologic” data-reactid=”84″>Hologic

The firm purchased 90,000 shares of Hologic, giving the holding 0.69% weight in the equity portfolio. Shares averaged $47.87 during the first quarter.

The Marlborough, Massachusetts-based company manufactures proprietary products for women’s health. GuruFocus ranks the company’s profitability 6 out of 10 on several positive investing signs, which include a high Piotroski F-Score of 7 and a net profit margin that outperforms 81.13% of global competitors.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Automatic Data Processing” data-reactid=”102″>Automatic Data Processing

The firm purchased 18,000 shares of Automatic Data Processing, giving the holding 0.54% weight in the equity portfolio. Shares averaged $161.83 during the first quarter.

ADP provides a wide range of staffing and employment services, including payroll processing and benefits administration. GuruFocus ranks the company’s profitability 8 out of 10 on several positive investing signs, which include consistent revenue growth and an operating margin that has increased approximately 3.10% per year on average over the past five years and is outperforming over 90% of global competitors.