– By James Li
Generation Investment Management, the firm founded by Al Gore (Trades, Portfolio) and David Blood, disclosed this week that its top five trades for the third quarter included a new position in Cisco Systems Inc. (NASDAQ:CSCO), position boosts in Analog Devices Inc. (NASDAQ:ADI) and Becton, Dickinson & Co. (NYSE:BDX) and position reductions in Alphabet Inc. (NASDAQ:GOOG) and Varian Medical Systems Inc. (NYSE:VAR).
Gore, a former Vice President of the United States, co-founded the London-based firm in 2004. The firm focuses on a long-term investment perspective, focusing on sustainability within markets with companies that strategically manage environmental, social and corporate governance factors.
Generation selects stocks using a bottom-up, fundamental analysis investing strategy. As of third quarter-end, the firm’s $18.84 billion equity portfolio contains 42 stocks, with three new positions and a turnover ratio of 12%. The top three sectors in terms of weight are technology, health care and industrials, representing 41.17%, 30.76% and 7.80% of the equity portfolio.
Generation purchased 18,434,739 shares of Cisco, giving the stake 3.85% weight in the equity portfolio. Shares averaged $43.58 during the third quarter; the stock is modestly undervalued based on its price-to-GF Value ratio of 0.87.
GuruFocus ranks the San Jose, California-based hardware company’s profitability 9 out of 10 on several positive investing signs, which include a five-star business predictability rank, a high Piotroski F-score of 8 and an operating margin that has increased approximately 3.70% per year on average over the past five years.
Other gurus with holdings in Cisco include Dodge & Cox, Ken Fisher (Trades, Portfolio) and PRIMECAP Management (Trades, Portfolio).
Generation purchased 3,051,184 shares of Analog Devices, increasing the position 109.13% and the equity portfolio 1.89%. Shares averaged $117.13 during the third quarter.
GuruFocus ranks the Norwood, Massachusetts-based semiconductor company’s profitability 8 out of 10 on the back of profit margins expanding over the past five years and outperforming over 90% of global competitors.
Becton, Dickinson & Co.
The firm purchased 987,408 shares of Becton, Dickinson & Co., increasing the holding 38.26% and the equity portfolio 1.22%. Shares averaged $251.49 during the third quarter.
GuruFocus ranks the New Jersey-based surgical products distributor’s profitability 8 out of 10 on the back of a four-star business predictability rank and profit margins outperforming over 62% of global competitors.
Generation sold 356,005 Class C shares of Alphabet, trimming the position 39.54% and the equity portfolio 2.90%. Shares averaged $1,525.89 during the third quarter.
GuruFocus ranks the Mountain View, California-based online media giant’s profitability 9 out of 10 on several positive investing signs, which include a four-star business predictability rank and a net profit margin that outperforms over 80% of global competitors.
The firm sold 1,958,623 shares of Varian, trimming the stake 59.95% and the equity portfolio 1.38%. Shares averaged $156.93 during the third quarter.
GuruFocus ranks the Palo Alto, California-based radiation technology designer’s profitability 7 out of 10 on the back of profit margins outperforming over 70% of global competitors.
Disclosure: No positions.
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This article first appeared on GuruFocus.