Renowned investor Mohnish Pabrai (Trades, Portfolio), who is the managing partner of Pabrai Investment Funds, released his equity portfolio for the second quarter earlier this week.
As a result of not being able to find good opportunities in the U.S. market, the value-focused guru, who runs an extremely concentrated portfolio of discounted, out-of-favor stocks, told GuruFocus in a 2019 interview that he moved the vast majority of his portfolio into India, Turkey and South Korea. The U.S.-based portfolio, which is currently valued at $73 million, represents a small fraction of the California-based firm’s assets under management.
According to the 13F filing for the three months ended June 30, Pabrai entered new positions in Alpha Metallurgical Resources Inc. (AMR, Financial) and Consol Energy Inc. (CEIX, Financial) and divested of the Micron Technology Inc. (MU, Financial), Brookfield Corp. (MN) and Seritage Growth Properties (SRG, Financial) holdings.
Investors should be aware 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Alpha Metallurgical Resources
The guru invested in 362,649 shares of Alpha Metallurgical Resources (AMR, Financial), allocating 81.20% of the equity portfolio to the position. The stock traded for an average price of $152.95 per share during the quarter.
Formerly known as Contura Energy, the Bristol, Tennessee-based company, which operates metallurgical coal mines, has a $2.54 billion market cap; its shares were trading around $185.74 on Friday with a price-earnings ratio of 3.27, a price-book ratio of 1.65 and a price-sales ratio of 0.86.
The GF Value Line suggests the stock is modestly overvalued currently based on its historical ratios, past financial performance and analysts’ future earnings projections.
At 68 out of 100, the GF Score indicates the company has poor performance potential. While it received high ratings for financial strength and profitability, the growth and momentum ranks are more moderate and value is low.
Of the gurus invested in Alpha Metallurgical Resources, Jim Simons (Trades, Portfolio)’ Renaissance Technologies has the largest holding with 4.08% of its outstanding shares. Joel Greenblatt (Trades, Portfolio), Caxton Associates (Trades, Portfolio) and Azvalor Managers FI (Trades, Portfolio) also own the stock.
Consol Energy
Pabrai picked up 203,474 shares of Consol Energy (CEIX, Financial), dedicating 18.80% of the equity portfolio to the holding. Shares traded for an average price of $60.97 each during the quarter.
The bituminous thermal coal producer headquartered in Canonsburg, Pennsylvania has a market cap of $2.56 billion; its shares were trading around $79.93 on Friday with a price-earnings ratio of 3.78, a price-book ratio of 2.11 and a price-sales ratio of 1.16.
According to the GF Value Line, the stock is significantly overvalued currently.
The GF Score of 59 warns that the company has poor performance potential on the back of high ratings for momentum and financial strength, middling marks for profitability and a low value rank. It did not receive a growth rank.
With an 8.01% stake, David Einhorn (Trades, Portfolio) is Consol Energy’s largest guru shareholder. Other top guru investors include Steven Cohen (Trades, Portfolio), Greenblatt and Chuck Royce (Trades, Portfolio).
Micron Technology
The investor dumped all 1.59 million shares of Micron Technology Inc. (MU, Financial), which impacted the equity portfolio by -79.22%. During the quarter, the stock traded for an average per-share price of $64.22.
GuruFocus estimates Pabrai gained 50.56% on the investment, which was previously his largest holding.
The semiconductor company based in Boise, Idaho has a $70.50 billion market cap; its shares were trading around $64.37 on Friday with a price-book ratio of 1.55 and a price-sales ratio of 3.89.
Based on the GF Value Line, the stock appears to be significantly overvalued currently.
The GF Score of 76 implies the company’s future performance is likely to be average, driven by high ratings for profitability, growth and momentum, middling marks for financial strength and a low value rank.
PRIMECAP Management (Trades, Portfolio) is the company’s largest guru shareholder with a 3.56% stake. Micron is also being held by Li Lu (Trades, Portfolio), Ruane Cunniff (Trades, Portfolio), Simons’ firm, Prem Watsa (Trades, Portfolio), Andreas Halvorsen (Trades, Portfolio), Hotchkis & Wiley, the Parnassus Value Equity Fund (Trades, Portfolio), Daniel Loeb (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio) and Charles Brandes (Trades, Portfolio), among others.
Brookfield
Pabrai exited his 772,579-share investment in Brookfield (BN, Financial). The transaction had an impact of -20.76% on the equity portfolio. The stock traded for an average price of $31.81 per share during the quarter.
GuruFocus data shows he lost around 14.36% on the investment over its lifetime.
The Canadian investment management company, which oversees $725 billion in assets as of 2022, has a market cap of $53.86 billion; its shares were trading around $34.35 on Friday with a price-earnings ratio of 85.88, a price-book ratio of 1.32 and a price-sales ratio of 0.57.
The GF Value Line suggests the stock is modestly undervalued currently.
Supported by high ratings for four of the criteria and a low financial strength rank, the GF Score of 89 means the company has good outperformance potential.
Holding a 1.17% stake, Chuck Akre (Trades, Portfolio) is Brookfield’s largest guru shareholder. Tom Gayner (Trades, Portfolio), Ron Baron (Trades, Portfolio), Murray Stahl (Trades, Portfolio), Jefferies Group (Trades, Portfolio) and Simons’ firm also have notable holdings.
Seritage Growth Properties
The guru sold his 3,375 remaining shares of Seritage Growth Properties (SRG, Financial), impacting the equity portfolio by -0.02%. During the quarter, shares traded for an average price of $7.99 each.
GuruFocus found Pabrai gained 13.19% on the investment.
Headquartered in New York, the real estate investment trust has a $499.93 million market cap; its shares were trading around $8.90 on Friday with a price-book ratio of 0.79 and a price-sales ratio of 6.03.
According to the GF Value Line, the stock is significantly overvalued currently.
Further, the GF Score of 49 warns the REIT has poor performance potential. Although it raked in a high momentum rank, its financial strength rank is more moderate and the other three criteria are low.
Hotchkis & Wiley is Seritage’s largest guru shareholder with an 8.08% stake. Other top investors are Mario Gabelli (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio), Caxton Associates (Trades, Portfolio) and Cohen.
Portfolio composition
Now that the guru’s U.S. equity portfolio is now only made up of two stocks, the basic materials sector has the largest representation, followed by energy.
