Now vs. Then
Last October, Stephen Jones and Tom Villalta, managers of the Jones Villalta Opportunity Fund (JVOFX), discussed three companies they expected to overcome negative public perception and post strong growth.
Multi-line insurance services company Hartford Financial Services (NYSE: HIG) provides a range of insurance products as well as investment services. Hartford’s third-quarter earnings per share of $0.05 missed analyst estimates of $0.22 by a wide margin. The company’s shares have declined 22.8 percent since last year.
Shares of Transocean (NYSE: RIG) have lost 21.4 percent since recommendation last year. Transocean owns the world’s largest offshore drilling fleet, but its reputation suffered due to its involvement in last year’s BP oil spill in the Gulf of Mexico. Although the company secured another $1.4 billion worth of contracts during the third quarter, it also reported a net loss of $71 million.
The industry leader in data storage, EMC (NYSE: EMC) continues to navigate a difficult corporate spending environment. The company posted solid third-quarter results with an 18 percent year-over-year increase in revenue and a 27 percent rise in net income. The company’s shares have gained 19.4 percent since recommendation last year.
The fund still holds all three names and believes they possess more value than current share prices suggest. The managers also think these companies are firmly positioned to withstand economic headwinds. The fund recently added shares of another beaten-down name, Hewlett-Packard (NYSE: HPQ), which they believe has solid fundamentals and will continue to generate strong free cash flow.
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