January 28, 2023

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First Eagle Evaporates Linde P


First Eagle Investment
(Trades, Portfolio) released this week its fourth-quarter portfolio, revealing that its top trades included the near-selling out of its stake in Linde PLC (LIN, Financial), reductions to its holdings of Nutrien Ltd. (NTR, Financial) and Schlumberger Ltd. (SLB, Financial) and boosts to its holdings of Alibaba Group Holding Ltd. (BABA, Financial) and The Scotts Miracle Gro Co. (SMG, Financial).

The New York-based firm invests based on the conviction that absolute long-term performance more efficiently preserves capital than competing against short-term movement of indexes. First Eagle employs bottom-up stock picking and a rigorous, fundamental investment approach.

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As of December 2021, the firm’s $38.99 billion equity portfolio contains 312 stocks, with 28 new positions and a quarterly turnover ratio of 3%. The top four sectors in terms of weight are technology, financial services, basic materials and communication services, representing 18.02%, 15.94%, 13.45% and 10.03% of the equity portfolio.

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Linde

The firm sold 1,811,977 shares of Linde (LIN, Financial), slicing 99.63% of the position and 1.36% of its equity portfolio.

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Shares of Linde averaged $324.66 during the fourth quarter; the stock is modestly overvalued based on Friday’s price-to-GF Value ratio of 1.18.

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GuruFocus ranks the U.K.-based industrial gas supplier’s profitability 8 out of 10 on several positive investing signs, which include a three-star business predictability rank, a high Piotroski F-score of 8 and profit margins that outperform more than 72% of global competitors.

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Gurus with holdings in Linde include Dodge & Cox and
Diamond Hill Capital
(Trades, Portfolio).

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Nutrien

The firm sold 5,492,985 shares of Nutrien (NTR, Financial), curbing 32.62% of the stake and 0.91% of its equity portfolio.

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Shares of Nutrien averaged $70.11 during the fourth quarter; the stock is modestly overvalued based on Friday’s price-to-GF Value ratio of 1.14.

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GuruFocus ranks the Saskatoon, Saskatchewan-based agriculture company’s profitability 8 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7, a three-year revenue growth rate that outperforms over 90% of global competitors, and profit margins that outperform over 65% of global agriculture companies.

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Schlumberger

The firm sold 4,036,475 shares of Schlumberger (SLB, Financial), chopping 13.08% of the position and 0.31% of its equity portfolio.

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Shares of Schlumberger averaged $31.49 during the fourth quarter; the stock is significantly overvalued based on Friday’s price-to-GF Value ratio of 1.57.

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GuruFocus ranks the Houston-based oil and gas supplier’s profitability 6 out of 10 on the back of profit margins and returns outperforming more than 64% of global competitors.

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Alibaba

The firm purchased 1,818,338 shares of Alibaba (BABA, Financial), boosting the position by 78.68% and its equity portfolio by 0.54%.

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Shares of Alibaba averaged $145.10 during the fourth quarter; the stock is significantly undervalued based on Friday’s price-to-GF Value ratio of 0.32.

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GuruFocus ranks the Chinese e-commerce giant’s profitability 8 out of 10 on several positive investing signs, which include a three-star business predictability rank and profit margins and returns that outperform more than 70% of global competitors.

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Gurus with holdings in Alibaba include
Charlie Munger
(Trades, Portfolio)’s Daily Journal Corp. (DJCO, Financial) and
Ken Fisher
(Trades, Portfolio)’s Fisher Investments.

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Scots Miracle Gro

The firm purchased 723,672 shares of Scots Miracle Gro (SMG, Financial), growing the position by 159.39% and its equity portfolio by 0.29%.

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Shares of Scots Miracle Gro averaged $155.09 during the fourth quarter; the stock is modestly undervalued based on Friday’s price-to-GF Value ratio of 0.82.

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GuruFocus ranks the Marysville, Ohio-based gardening company’s profitability 8 out of 10 on several positive investing signs, which include profit margins outperforming more than 68% of global competitors and three-year revenue and earnings growth rates topping more than 88% of global agriculture companies.

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