Manager John Ballard, who has a fundamental buy and hold portfolio, scooped up some DreamWorks Animation SKG Inc. (NASDAQ:DWA) stock this week. With a recent decline in revenue and the much anticipated release of its final movie of the Shrek franchise underperforming expectations, DWA has slipped out of investor favor over the past month resulting in a more than 29% drop in stock price over the past quarter. But it is notable that, before falling out of favor, the company was at a 5-year high, up over 24% from 2005. The company has announced its plans to follow up its popular How to Train Your Dragon movie with a sequel which could prove very profitable for the company in the future.
With a value approach to investing in his portfolio, manager Czar Reyes bought Coventry Health Care Inc. (NYSE:CVH) this week. Coventry Health Care has a low price to earnings ratio compared to competitors as well as a low price to book ratio. Although their stock price has declined over 53% during the past 5 years, the healthcare industry is one that can generally sustain market downturns and has consistent income as it is not a cyclical business and is not generally at the receiving end of waning consumer interest. Coventry has had an impressive first quarter which has raised their financial forecast in analyst’s eyes. This positive income potential and low stock price combine to make this an understandable purchase for a value investor.
