$13 billion market cap integrated circuits manufacturer Analog Devices, Inc. (NASDAQ:ADI) was another of Cantillon’s top picks. Analog’s business has been slightly weaker than a year ago, and again the earnings multiples aren’t particularly attractive: the stock carries trailing and forward P/Es of 20 and 16, respectively. Renaissance Technologies, whose success since inception has made founder Jim Simons a billionaire, owned 3.7 million shares of the stock at the end of September (research more stocks Renaissance owned).
Cantillon’s fifth largest 13F holding was Colgate-Palmolive Company (NYSE:CL) as von Mueffling and his team kept their holdings about flat at 1.9 million shares. Paul Ruddock and Steve Heinz’s Lansdowne Partners roughly doubled the size of their own position in Colgate between July and September and had 3 million shares at the end of the third quarter. Colgate trades at 18 times expected earnings for 2013, which again seems high even for a consumer staples stock with a low correlation to market indices. Neither revenue nor earnings changed by more than 2% between Q3 2011 and Q3 2012, and so we don’t think that it makes sense to buy the stock at the current price.
Disclosure: I own no shares of any stocks mentioned in this article.