Overview of PRIMECAP Management (Trades, Portfolio)'s Recent Stock Transaction
PRIMECAP Management (Trades, Portfolio), a notable investment firm, has recently altered its investment in Flex Ltd (FLEX, Financial), a leading contract manufacturing company. On December 31, 2023, the firm reduced its holdings by 961,130 shares, which resulted in a 2.08% change in the number of shares owned. This transaction had a minor impact of -0.02% on PRIMECAP Management (Trades, Portfolio)'s portfolio, with the trade executed at a price of $22.1565 per share. Following this transaction, the firm's total share count in Flex Ltd stands at 45,139,254, making up 0.84% of its portfolio and representing a 10.42% ownership stake in the company.
Profile of PRIMECAP Management (Trades, Portfolio)
Founded in 1983 and based in Pasadena, CA, PRIMECAP Management (Trades, Portfolio) Company is an independent investment management firm that specializes in managing US-focused equity portfolios for institutions and mutual funds. The firm's investment approach is grounded in four key principles: individual decision-making, a commitment to fundamental research, a long-term investment horizon, and a focus on value. PRIMECAP Management (Trades, Portfolio) employs a multi-counselor investment model, allowing each portfolio manager to independently manage a portion of the fund. The firm's investment philosophy centers on identifying undervalued stocks with the potential to outperform the market over a three to five-year period, often starting with companies and industries that are currently out of favor.
Flex Ltd Company Overview
Flex Ltd, headquartered in Singapore, went public on September 28, 1987. The company operates through various segments, including Flex Agility Solutions (FAS), Flex Reliability Solutions (FRS), and Nextracker, offering comprehensive electronics design, manufacturing, and product management services. Flex Ltd has a global presence with significant operations in China, Mexico, the United States, Brazil, Malaysia, Hungary, and other countries. The company caters to a diverse range of market segments, from automotive and health solutions to consumer devices and solar tracker technologies.
Transaction Specifics and Portfolio Impact
The recent sale of Flex Ltd shares by PRIMECAP Management (Trades, Portfolio) has slightly adjusted the firm's portfolio composition. Despite the reduction, Flex Ltd remains a significant holding, with the firm's stake valued at approximately $999,999,999, based on the trade price. This position indicates a substantial level of confidence in Flex Ltd's future prospects within PRIMECAP Management (Trades, Portfolio)'s investment strategy.
Flex Ltd Stock Analysis
As of the latest data, Flex Ltd's stock price stands at $27.11, with a market capitalization of $11.42 billion. The company's price-to-earnings (P/E) ratio is 16.14, indicating profitability, but the stock is currently deemed Significantly Overvalued according to the GF Valuation. Flex Ltd has a GF Score of 79/100, suggesting a strong potential for future performance. The stock's ranks in profitability, growth, and momentum are 9/10, 7/10, and 9/10, respectively, while the GF Value Rank is at the lower end with 1/10.
Market Context and Performance
Since the trade date, Flex Ltd's stock price has increased by 22.36%, and the year-to-date price change ratio stands at 23%. The stock has experienced a significant appreciation of 1,956.27% since its IPO. Flex Ltd's financial health is reflected in its cash to debt ratio of 0.70 and an interest coverage ratio of 6.15, indicating the company's ability to manage its debt obligations effectively.
Sector and Industry Perspective
PRIMECAP Management (Trades, Portfolio)'s top sectors include Technology and Healthcare, with leading holdings such as Amgen Inc (AMGN, Financial) and Eli Lilly and Co (LLY, Financial). Flex Ltd, classified within the Hardware industry, operates in a competitive landscape where innovation and efficient production are key to maintaining market position.
Other Notable Investors
Several other investment gurus also hold stakes in Flex Ltd, including Richard Pzena (Trades, Portfolio), Jefferies Group (Trades, Portfolio), and First Eagle Investment (Trades, Portfolio). Brandes Investment currently holds the largest guru shareholder position in Flex Ltd, although the exact share percentage is not disclosed.
Transaction Analysis
The reduction in PRIMECAP Management (Trades, Portfolio)'s holdings of Flex Ltd shares represents a strategic move within its portfolio. While the firm has decreased its position, the remaining stake suggests a continued belief in the company's value proposition. The transaction aligns with PRIMECAP Management (Trades, Portfolio)'s philosophy of patience and long-term value recognition, even as market dynamics fluctuate.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
