John W. Rogers’ Interview: Explains Why He is Bullish on KKR & Co. L.P. (KKR), First American Financial Corp (FAF) & Dun & Bradstreet Corp (DNB)

John W. Rogers, the manager of Ariel Investments is one of the most notorious stock pickers in the investment world. He launched his fund after working for over two years as a stockbroker at William Blair & Company, LLC. Currently, Ariel Investments has around $9 billion in assets under management and returned over 22% over the past year. In a recent interview on CNBC, Mr. Rogers has discussed three stocks he is bullish on: KKR & Co. L.P. (NYSE:KKR)First American Financial Corp (NYSE:FAF) and Dun & Bradstreet Corp (NYSE:DNB).

KKR & Co. L.P. (NYSE:KKR)

KKR & Co. L.P. (NYSE:KKR) currently represents the largest holding in Ariel’s portfolio, Mr. Rogers stated, also pointing out that they consider the stock being “extraordinarily cheap.” However, in its latest 13F filing, Ariel Investment revealed holding over 6.5 million shares, with an aggregate value of $149.5 million, the position being only the 14th largest in terms of value.

“People are underestimating the power they [KKR] have to gather assets and grow their assets over the next 3-5 years. Great management team, strong balance sheet, it’s a wonderful franchise,” the CEO of Ariel Investment said.

Mr. Rogers also stated that KKR & Co. L.P. (NYSE:KKR)’s recent acquisition of KKR Financial Holdings (KFN) was a good move and Ariel Investments, as a large shareholder of KKR, has spent time discussing with the management of KKR about this merger. Mr. Rogers considers that this merger (that took place at the end of April) will strenghten KKR & Co. L.P. (NYSE:KKR)’s balance sheet in the long-term run and the market has not “understood the power of the merger.”

Another hedge fund betting on KKR & Co. L.P. (NYSE:KKR) is GMT Capital, run by Thomas E. Claugus, which held 4.95 million shares of the company in its equity portfolio at the end of March. Robert Joseph Caruso‘s Select Equity Group has more than doubled its holding to 4.76 million shares during the first three months of the year.

Another pick of Mr. Rogers, First American Financial Corp (NYSE:FAF), is one of the largest title insurance companies in the U.S. and in his view, the company will gain on the U.S. housing recovery, and is well-positioned to benefit from the 1.5 million new homes in the country. At the same time, with the interest rates staying low, and mortgage rates declining, people will need to refinance their mortgages and for that they will need title insurance.

“With the stock at 13 times earnings it’s a real bargain, it does not reflect this current environment for the housing recovery,” John Rogers said.

In the latest 13F filing, First American Financial Corp (NYSE:FAF) was the second-largest holding in terms of value in Ariel Investment’s equity portfolio, the fund reporting ownership of over 9.60 million shares, valued at $254.96 million, the position amassing over 3% of the total equity portfolio. Another shareholder bullish on the stock is Ralph V. Whitworth‘s Relational Investors, which initiated a stake in the company during the first quarter, holding some 2.67 million shares of First American Financial Corp (NYSE:FAF) as of the end of March.

In Dun & Bradstreet Corp (NYSE:DNB), Ariel Investments disclosed a $87.12 million stake, which contained some 876,900 shares as of the end of March. About this company, the CEO of the fund said that it is a “perennial, wonderful brand.”  Dun & Bradstreet Corp (NYSE:DNB) is engaged in providing commercial information and insight on business, helping its customers to make investment decisions based on several factors such as the credit risk of a business.

“Credit information is more important than ever, we’ve learned that during the financial crisis. You need to understand who is financially strong and companies like DNB are very well positioned to benefit from that,” Mr. Rogers also said.

Cliff Asness‘ Aqr Capital Management is another shareholder of Dun & Bradstreet Corp (NYSE:DNB), doubling its stake during the first quarter to around 431,800 shares. Ken Griffin‘s Citadel Investment Group and Robert Pohly‘s Samlyn Capital have initiated stakes in Dun & Bradstreet Corp (NYSE:DNB) during the first three months, currently holding approximately 310,300 shares and 352,200 shares respectively.

Watch the full video below:

Disclosure: none

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Top 6 Things You Can Do To Increase Your Productivity

Top 9 Trending Smartphones in 2013

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!