The Harbor Capital Appreciation Fund (Trades, Portfolio) disclosed its equity portfolio for the third quarter of 2023 last week.
Part of Chicago-based Harbor Funds, the fund, which was previously managed by the late Spiros Segalas, primarily invests in companies with market caps of at least $1 billion at the time of purchase. The portfolio managers focus on companies that have strong balance sheets and earnings performance, good sales momentum and growth outlook, a history of high profitability, a unique market position and a capable, committed management team.
The NPORT-P filing showed the fund established four new positions, sold out of seven stocks and added to or curbed a number of other existing investments during the three months ended July 31. Notable trades included a new holding in MongoDB Inc. (MDB, Financial), additions to the Meta Platforms Inc. (META, Financial) and Advanced Micro Devices Inc. (AMD, Financial) bets and the divestment of SLB (SLB, Financial) and T-Mobile US Inc. (TMUS, Financial).
Investors should be aware that, just like 13F reports, NPORT-P reports do not provide a complete picture of a guru’s holdings to the public. Filed by certain mutual funds after each quarter’s end, they collect a wide variety of information on the fund for the SEC’s reference, but in general, the only information made public is in regard to long equity positions. Unlike 13Fs, they do require some disclosure for long equity positions in foreign stocks. Despite their limitations, even these limited filings can provide valuable information.
MongoDB
The fund invested in 598,694 shares of MongoDB (MDB, Financial), allocating 0.99% of the equity portfolio to the holding. The stock traded for an average price of $350.47 per share during the quarter.
The New York-based software company, which develops and provides commercial support for its NoSQL database, has a $23.52 billion market cap; its shares were trading around $329.72 on Thursday with a price-book ratio of 26.57 and a price-sales ratio of 15.49.
The GF Value Line suggests the stock is significantly undervalued based on its historical ratios, past financial performance and analysts’ future earnings projections.
At 77 out of 100, the GF Score indicates the company is likely to have average performance going forward. While it received high ratings for growth and value, the financial strength and momentum ranks are more moderate and profitability is low.
Of the gurus invested in MongoDB, Harbor Capital has the largest holding with 0.84% of its outstanding shares. The stock is also being held by Jim Simons (Trades, Portfolio)’ Renaissance Technologies, PRIMECAP Management (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio) and several other gurus.
Meta Platforms
Harbor Capital upped its Meta Platforms (META, Financial) stake by 103.52%, picking up 1.44 million shares. The transaction had an impact of 1.79% on the equity portfolio. Shares traded for an average price of $274.06 each during the quarter.
It now holds 2.82 million shares in total, which occupy 3.51% of the equity portfolio as its sixth-largest holding. GuruFocus estimates the fund has gained 61.83% on the investment so far.
The social media company formerly known as Facebook, which is headquartered in Menlo Park, California, has a market cap of $774.91 billion; its shares traded around $301.15 on Thursday with a price-earnings ratio of 35.10, a price-book ratio of 5.78 and a price-sales ratio of 6.57.
According to the GF Value Line, the stock is modestly undervalued currently.
Supported by high ranks for profitability, growth, financial strength and value as well as a low momentum rating, the GF Score is 90. This implies the company has good outperformance potential.
With a 0.33% stake, Chase Coleman (Trades, Portfolio) is Meta’s largest guru shareholder. Other top guru investors include First Eagle Investment (Trades, Portfolio), Chris Davis (Trades, Portfolio), Philippe Laffont (Trades, Portfolio), Ken Fisher (Trades, Portfolio), Dodge & Cox and Simons’ firm.
Advanced Micro Devices
The fund increased its Advanced Micro Devices (AMD, Financial) stake by 77.50%, adding 2.86 million shares. The transaction impacted the equity portfolio by 1.28%. During the quarter, the stock traded for an average per-share price of $111.40.
Harbor Capital now holds 6.56 million shares of Advanced Micro Devices, which make up 2.93% of the equity portfolio as its ninth-largest position. GuruFocus found it has gained around 7.16% on the investment to date.
The Santa Clara, California-based semiconductor company has a $165.33 billion market cap; its shares were trading around $102.33 on Thursday with a price-book ratio of 3 and a price-sales ratio of 7.64.
Based on the GF Value Line, the stock appears to be modestly undervalued currently.
The GF Score of 92 means the company has high outperformance potential, driven by solid ratings for four of the criteria as well as a more moderate value rank.
Fisher is Advanced Micro Devices’ largest guru shareholder with a 1.67% stake. Laffont, Baillie Gifford (Trades, Portfolio), David Tepper (Trades, Portfolio) and Daniel Loeb (Trades, Portfolio) also have notable holdings.
SLB
Impacting the equity portfolio by -1.60%, Harbor Capital sold out of its 7.26 billion-share stake in SLB (SLB, Financial). The stock traded for an average price of $49.28 per share during the quarter.
GuruFocus data shows the fund gained 7.67% on the investment over its lifetime.
The oilfield services company headquartered in Houston has a market cap of $79.08 billion; its shares traded for an average price of $55.65 on Thursday with a price-earnings ratio of 20.31, a price-book ratio of 4.25 and a price-sales ratio of 2.53.
The GF Value Line suggests the stock, while undervalued, is a possible value trap currently. As such, potential investors should do thorough research before making a decision.
The GF Score of 71 indicates the company is likely to have average performance going forward on the back of high value and momentum ratings, middling marks for profitability and financial strength and a low growth rank.
Holding a 1.92% stake, First Eagle is SLB’s largest guru shareholder. Fisher and Hotchkis & Wiley also have large positions.
T-Mobile US
With an impact of -1.25% on the equity portfolio, the fund exited its 1.95 million-share position in T-Mobile (TMUS, Financial). During the quarter, shares traded for an average price of $137.65 each.
GuruFocus says Harbor Capital lost 4.04% on the investment.
The Bellevue, Washington-based telecom company has a $162.50 billion market cap; its shares were trading around $138.13 on Thursday with a price-earnings ratio of 27.52, a price-book ratio of 2.48 and a price-sales ratio of 2.15.
According to the GF Value Line, the stock is fairly valued currently.
The company is likely to have average performance going forward based on its GF Score of 78. While it received high ratings for growth and profitability, the other three ranks are more moderate.
Dodge & Cox is T-Mobile’s largest guru shareholder with a 0.98% stake. Warren Buffett (Trades, Portfolio), Steven Cohen (Trades, Portfolio) and Stanley Druckenmiller (Trades, Portfolio) also have significant holdings.
Additional trades and portfolio performance
During the quarter, the fund also reduced its holding of UnitedHealth Group Inc. (UNH, Financial), sold out of Thermo Fisher Scientific Inc. (TMO, Financial) and established positions in Micron Technology Inc. (MU, Financial), Argenx SE (ARGX, Financial) and Mobileye Global Inc. (MBLY, Financial).
The fund’s $25.67 billion equity portfolio, which is composed of 53 stocks, is heavily invested in the technology and consumer cyclical sectors.
The Harbor Capital Appreciation Fund (Trades, Portfolio) posted a return of -37.94% in 2022, underperforming the S&P 500's -18.11% return.
