Brandes Investment recently disclosed its portfolio updates for the first quarter of 2021, which ended on March 31st.
Charles Brandes (Trades, Portfolio) in 1974 and based in San Diego, California, Brandes Investment is a firm investing firm seeking to buy securities that are not favorably traded at discounts on their intrinsic value (based on total potential return) and then hold them until the market recognizes their true value.
Based on its investment criteria, the company’s biggest selling for the quarter was Baidu Inc (BIDU, Financial) and Cemex SAB de CV (CX, Financial), while its most popular purchase was OneMain Holdings Inc (OMF, Financial) and Chesapeake Energy Corp (CHK, Financial).
The firm sold its 362,268-share stake to Baidu Inc (BIDU, Financial), affecting the equity portfolio by -2.05%. During the quarter, the shares traded at an average price of $ 261.90.
Baidu is a Chinese giant and technology giant that specializes in artificial intelligence, Internet services, search engines and related products. It has access to the largest domestic addressable population of Internet users in the world.
On May 26, Baidu shares traded at around $ 194.88 for a market cap of $ 67.72 billion and a earnings -to -price ratio of 9.32. According to the GuruFocus Value chart, the stock is “modestly overvalued.”
The company has a financial strength rating of 6 out of 10 and a profitability rating of 8 out of 10. A Piotroski F-Score of 6 out of 9 and Altman Z-Score of 2.97 indicate that the company is likely to not experience liquidity issues. The three -year revenue growth rate is 9.9%, while the three -year Ebitda growth rate is 13.2%.
Cemex SAB de CV
The firm reduced its investment in Cemex SAB de CV (CX, Financial) of 14,744,726 shares, or 30.96%, left the remaining holding of 32,875,161 shares. The trade had a -1.97% impact on the equity portfolio. The shares traded at an average price of $ 6.47 during the quarter.
Cemex is a multinational building materials company headquartered in San Pedro, Mexico. It manufactures, distributes and markets cement, ready -made concrete, composite and other materials in more than 50 countries.
On May 26, Cemex shares shares of approximately $ 8.01 for a market cap of $ 11.80 billion. According to Peter Lynch’s chart, the stock is trading above both its intrinsic value and this median valuation.
The company has a financial strength rating of 5 out of 10 and a profitability rating of 5 out of 10. An interest coverage ratio of 1.75 and an Altman Z-Score of 0.87 indicate potential liquidity issues. . The return on invested capital (ROIC) continues to be lower than the weighted average cost of capital (WACC), indicating that growth is not profitable.
OneMain Holdings Inc.
The firm established a new position of 744,281 shares in OneMain Holdings Inc (OMF, Financial), with a 0.95% impact on the equity portfolio. During the quarter, the shares traded at an average price of $ 51.65.
Headquartered in Evansville, Indiana, OneMain Holdings is a financial services holding company that owns and operates the largest personal installment loan company in the U.S. It makes emergency loans to those with nonprime credit score that does not qualify for a loan from a bank or credit union
On May 26, OneMain Holdings shares shares of approximately $ 55.79 for a market cap of $ 7.50 billion and a earnings-to-price ratio of 6.76. According to the GuruFocus Value chart, the stock is “massively overvalued.”
The company has a financial strength rating of 3 out of 10 and a profitability rating of 5 out of 10. The cash-debt ratio of 0.08 is lower than 76% of its industry peers, but Piotroski An F-Score of 8 out of 9 suggests a strong balance sheet. The return on equity of 18.79% and return on assets of 3.22% exceeds 82% of other companies in the industry.
Chesapeake Energy Corp.
The firm also invested in 680,593 shares of Chesapeake Energy Corp. (CHK, Financial), affecting the equity portfolio by 0.69%. The shares were traded at an average price of $ 44.03 during the quarter.
Based in Oklahoma City, Oklahoma, Chesapeake Energy is an American hydrocarbon exploration and development company. The company emerged from Chapter 11 losses last February, canceling the previous shares under a restructuring agreement and issuing new shares.
On May 26, Chesapeake Energy shares nearly $ 52.80 for a market cap of $ 5.17 billion. The shares have gained 17% since the company emerged from losses in early February.
The company has a financial strength rating of 3 out of 10 and a profitability rating of 3 out of 10. Clearly there are issues with getting unmanageable debt levels given the recent bankruptcy, and the current ratio. that 0.82 indicates that the company’s balance is on thin ice. The operating margin of -3.80% and net margin of -186.83% indicate that the company needs to improve its profitability quickly if it wants to stay in business.
As of the end of the quarter, the company held 160 common stock positions worth a total of $ 4.23 billion. It established 21 new positions, sold 13 holdings and added to or reduced several other positions for a 7%shift.
The leading holder is UBS Group AG (UBS, Financial) with 6.42% of the equity portfolio, Embraer SA (ERJ, Financial) with 5.77% and Cemex with 5.59%. In terms of sector valuation, the firm is most invested in the financial services, healthcare and industries.
Disclosure: The author has no ownership in any of the aforementioned stocks. The mention of stocks in this article does not at any point constitute an investment recommendation. Portfolio updates only reflect common stock positions according to regulatory filing for the room in question and may not include changes made after the end of the quarter.
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