Alan Fournier’s Firm Plunges Into Intel in 1st Quarter


Alan Fournier
(Trades, Portfolio), leader of Pennant Investors, disclosed this month that his firm’s top four trades during the first quarter included a new position in Intel Corp. (INTC, Financial), the closure of its positions in SPDR Gold Shares ETF (GLD, Financial) and Bruker Corp. (BRKR, Financial) and a reduction to its stake in Micron Technology Inc. (MU, Financial).

Prior to founding the Summit, New Jersey-based firm, Fournier managed global equity securities at


David Tepper
(Trades, Portfolio)’s Appaloosa Management. The Pennant fund manager converted his firm into a family office in 2019 following several years of unsatisfactory returns.

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As of March 31, the firm’s $362 million equity portfolio contains 21 stocks, with three new positions and a turnover ratio of 14%. The firm’s top three sectors are communication services, technology and consumer cyclical, with portfolio weights of 35.33%, 30.91% and 20.48%, respectively.

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Intel

Pennant purchased 690,000 shares of Intel (

INTC, Financial), giving the position a 12.18% weight in the equity portfolio. Shares averaged $59.63 during the first quarter. The stock is fairly valued based on Wednesday’s price-to-GF-Value ratio of 0.91.

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GuruFocus ranks the Santa Clara, California-based semiconductor giant’s profitability 9 out of 10 on several positive investing signs, which include a 3.5-star business predictability rank and an operating margin that has increased approximately 4.7% per year on average over the past five years and is outperforming over 93% of global competitors.

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Gurus with large holdings in Intel include


PRIMECAP Management
(Trades, Portfolio),
Ken Fisher
(Trades, Portfolio)’s Fisher Investments,
Seth Klarman
(Trades, Portfolio)’s Baupost Group and
Chris Davis
(Trades, Portfolio)’ Davis Select Advisors.

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SPDR Gold Trust

The firm sold 101,000 shares of the SPDR Gold Trust (

GLD, Financial), or 5.79% of the equity portfolio. Shares averaged $168.06 during the first quarter.

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According to the State Street Global Advisor’s website, the SPDR Gold Trust seeks to track the performance of gold bullion prices.

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Bruker

The firm sold 146,250 shares of Bruker (

BRKR, Financial), trimming the equity portfolio by 2.55%. Shares averaged $60.09 during the first quarter. The stock is significantly overvalued based on Wednesday’s price-to-GF-Value ratio of 1.48.

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GuruFocus ranks the Billerica, Massachusetts-based medical instrument company’s profitability 8 out of 10 on the back of expanding operating margins and returns that outperform over 77% of global competitors.

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Micron Technology

Pennant sold 93,000 shares of Micron Technology (

MU, Financial), reducing the position by 15.35% and the equity portfolio by 2.25%. Shares averaged $84.89 during the first quarter; the stock is significantly overvalued based on Wednesday’s price-to-GF-Value ratio of 1.57.

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GuruFocus ranks the Boise, Idaho-based semiconductor company’s profitability 8 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7 and and an operating margin that outperforms more than 70% of global competitors.

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Disclosure: Long Intel.

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