According to current portfolio statistics, a Premium feature of GuruFocus, the top-performing stocks in Kahn Brothers (Trades, Portfolio)’ portfolio during 2021 included IDT Corp. (IDT, Financial), MBIA Inc. (MBI, Financial), Patterson-UTI Energy Inc. (PTEN, Financial), Assured Guaranty Ltd. (AGO, Financial) and Pfizer Inc. (PFE, Financial).
Founded by the late Irving Kahn, the firm invests in out-of-favor stocks using bottom-up stock picking with a Benjamin Graham-style approach. The firm identifies stocks one at a time based on assets, operating performance and long-term fundamental business prospects.
As of December 2021, the firm’s $728 million equity portfolio contains 43 stocks with a quarterly turnover ratio of 2%. The top three sectors in terms of weight are financial services, health care and energy, representing 37.91%, 34.29% and 15.39% of the equity portfolio.
IDT
The firm owns 472,349 shares of IDT (IDT, Financial), giving the position 2.87% weight in the equity portfolio.
Shares of IDT traded around $36.53, up approximately 149.13% over the past year. The stock is significantly overvalued based on Wednesday’s price-to-GF Value ratio of 4.37.
GuruFocus ranks the Newark, New Jersey-based telecommunication service company’s financial strength 6 out of 10 on the back of a Beneish M-score that signals possible earnings manipulation despite the company having a high Piotroski F-score of 8, a strong Altman Z-score of 4.87 and debt ratios that are outperforming more than 85% of global competitors.
Other gurus with holdings in IDT include Jim Simons (Trades, Portfolio)’ Renaissance Technologies and Jeremy Grantham (Trades, Portfolio)’s GMO.
MBIA
The firm owns 4,978,900 shares of MBIA (MBI, Financial), giving the stake 10.8% weight in the equity portfolio.
Shares of MBIA traded around $13.48, up approximately 87.25% over the past 12 months. The stock is modestly overvalued based on Wednesday’s price-to-GF Value ratio of 1.19.
According to GuruFocus, the Purchase, New York-based financial guaranty insurance company’s cash-to-debt ratio underperforms over 90% of global competitors, suggesting low financial strength.
Patterson-UTI
The firm owns 5,956,377 shares of Patterson-UTI (PTEN, Financial), giving the holding 6.91% equity portfolio weight.
Shares of Patterson-UTI traded around $10.07, up approximately 66.93% over the past year. The stock is significantly overvalued based on Wednesday’s price-to-GF Value ratio of 1.81.
GuruFocus ranks the Houston-based energy company’s financial strength 4 out of 10 on the back of a weak Altman Z-score of 1.08 and debt ratios that are underperforming more than 55% of global competitors.
Assured Guaranty
The firm owns 1,435,845 shares of Assured Guaranty (AGO, Financial), giving the position 9.9% equity portfolio weight.
Shares of Assured Guaranty traded around $51.87, up approximately 43.62% over the past year. The stock is modestly overvalued based on Wednesday’s price-to-GF Value ratio of 1.23.
GuruFocus ranks the insurance company’s financial strength 3 out of 10 on the back of interest coverage and debt ratios underperforming more than 82% of global competitors.
Pfizer
The firm owns 1,017,928 shares of Pfizer (PFE, Financial), giving the stake 8.26% equity portfolio weight.
Shares of Pfizer traded around $52.63, up approximately 45.12% during the past 12 months. The stock is modestly undervalued based on Wednesday’s price-to-GF Value ratio of 0.83.
GuruFocus ranks the New York-based drug manufacturer’s profitability 7 out of 10 on the back of three-year revenue and earnings decline rates underperforming more than 75% of global competitors despite profit margins and returns outperforming over 87% of global drug manufacturers.
