FPA Capital Adds to Avnet Position

GuruFocus.com
0

- By Kyle Ferguson

FPA Capital Fund (Trades, Portfolio), an investment firm that seeks long-term growth through the careful selection of common stocks and select fixed income securities, added 100,040 shares of Avnet (AVT) to its portfolio. The trade had a 0.91% impact on FPA Capital Fund's portfolio.


Avnet has a market cap of $5.95 billion, a price-earnings (P/E) ratio of 13.77, an enterprise value of $7.46 billion, a price-book (P/B) ratio of 1.23, a price-sales (P/S) ratio of 0.27 and a quick ratio of 2.12.

Avnet was incorporated in New York on July 22, 1955. The company along with its subsidiaries is a value-added distributor of electronic components, enterprise computer and storage products, IT solutions and services and embedded systems.

According to GuruFocus Avnet has a 6/10 financial strength rating with a cash-debt ratio of 0.44, an equity-asset ratio of 0.43 and a Piotroski F-Score of 5 indicating the company's financial situation is typical for a stable company.

Avnet also has a 6 of 10 profitability and growth rating with an operating margin of 3.04%, a net margin of 1.90%, a return on equity (ROE) of 9.45%, revenue growth (three years) of 2.70% and a return on capital (ROC Joel Greenblatt ( Trades , Portfolio )) of 14.16%.

GuruFocus has detected one severe warning sign to which investors should pay attention.

  • Avnet's operating margin has been in a five-year decline. The average rate of decline per year is 3%.



Since the first quarter of 2011, FPA Capital has gained an estimated 23% return with its investment in Avnet.

Below is a Peter Lynch chart that shows Avnet is trading below its intrinsic value

Disclosure: The author does not own any shares of this company.

Start a free seven-day trial of Premium Membership to GuruFocus.

This article first appeared on GuruFocus.


Advertisement

Recommended Stories