Charles Brandes

Charles Brandes

Last Update: 08-11-2016

Number of Stocks: 190
Number of New Stocks: 26

Total Value: $6,546 Mil
Q/Q Turnover: 4%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Charles Brandes Watch

  • John Rogers Continues to Buy Morgan Stanley, Ansys

    John Rogers (Trades, Portfolio) is the founder of Ariel Investment LLC, which he started in 1983. In both fourth quarter 2015 and first quarter 2016 the guru bought shares in the following stocks:


    HSBC Holdings PLC (HSBC)

      


  • Charles Brandes Continues to Buy Avon, Higher One Holdings

    Charles Brandes (Trades, Portfolio) is the chairman of Brandes Investment Partners, the firm he started in 1974. In both fourth quarter 2015 and first quarter 2016, the guru bought shares in the following stocks:


    Endeavour Silver Corp. (EXK)

      


  • Honda Approaches Its 10-Year P/B Ratio Low

    Honda Motor Co. Ltd. (NYSE:HMC) is traded at a P/B ratio of 0.80, close to its 10-year low of 0.72. The company is owned by eight gurus.


    Honda has a market cap of $47.89 billion; its shares were traded around $26.57 with a P/E ratio of 17.38 and P/S ratio of 0.39. The trailing 12-month dividend yield of Honda stock is 2.89%. Honda's forward dividend yield is 3.25%. Honda had an annual average earnings growth of 3.90% over the past 10 years. GuruFocus rated Honda the business predictability rank of 2.5-star.

      


  • Brandes Investments Comments on Chesapeake

    The uncertainty with Chesapeake (NYSE:CHK) is (and has been) the natural gas price. We believe that supply and demand warrant a much higher price than the current sub-$2 per mmBtu level (currently even lower in Pennsylvania where Chesapeake has a significant percentage of its acreage), likely in the $4-$6 range in the medium to long term. At the current natural gas price, producers are cutting capex significantly, which could ultimately impact the supply of natural gas. The path of natural gas prices is uncertain with a lag between capex cuts and changes to production levels. At higher long-term price levels we believe that Chesapeake’s enterprise value would be substantially more than what was valued by the market.


    However, as Chesapeake built out its acreage, it utilized a significant amount of debt, making it one of the more leveraged oil and natural gas companies today. As a result, while we think it likely has access to liquidity to survive the depressed natural-gas price environment for the next year or two, we cannot rule out that the management and board will choose to preemptively file for reorganization under the bankruptcy code in order to restructure the company and reduce the substantial debt burden.

      


  • Brandes Investments Comments on Total

    We purchased France-based Total (NYSE:TOT), a vertically integrated oil company operating at all levels within the oil & gas industry, including exploration & production as well as refining & marketing. We had owned Total in the past and sold it in 2014 after the company had several positive developments. However, over the past year the stock declined significantly with the fall in oil prices and has traded near book value. We believe the company has positive attributes, including:


    • Solid fundamentals: While the market is concerned about the fall in oil prices, we see a strong company with industry-
    •   


  • Brandes Investments Comments on Express Scripts

    Express Scripts (NASDAQ:ESRX) declined 20% during the quarter due to a dispute with its largest client, health insurer Anthem (which accounts for 15%-20% of Express Scripts’ sales), as Anthem believes that Express Scripts needs to pass on larger drug cost savings to its customers. Under the existing contract, Anthem is entitled to a good-faith repricing of the contract terms, the deadline for which was December 15, 2015. As the deadline has passed and Express Scripts still has not provided Anthem with an offer that Anthem deems acceptable, Anthem has recently decided to take legal action against Express Scripts. Express Scripts’ CEO stated the company intends to resolve the dispute and keep Anthem as a customer.


    We believe the market has over-reacted to the dispute as the current valuation prices in more than a complete loss of the Anthem contract. While there are multiple possibilities, we believe the most likely outcome is a renegotiation to extend the contract, likely at a lower margin but with increased volumes due to Anthem’s acquisition of Cigna. However there is a risk that Anthem switches to another vendor or brings the business in-house, although it lacks scale relative to peers. Given that the market seems to have priced in the worst-case outcome, we continue to believe that Express Scripts offers an attractive margin of safety.

      


  • Brandes Investments Comments on Credit Suisse

    Credit Suisse (NYSE:CS) declined over 30% during the quarter as the market remained concerned about the company’s restructuring/turnaround and the possible negative effect on financial results over the next year. Nonetheless, we continue to believe Credit Suisse has an economically attractive business model and is significantly discounted at its current valuation of 0.7x tangible book value. Accordingly, we increased our allocation during the quarter.


    From Brandes' Global Equity Fund first quarter 2016 commentary.

      


  • Brandes Investments Comments on Citigroup

    Citigroup (NYSE:C) has energy-loan exposure of less than 4% of total loans, and is, in our view, positioned to benefit from an eventual increase in interest rates. At its current valuation (as of March 31) of just 60% of book value and 7.7x earnings on depressed net interest margins, we believe the stock offers a compelling investment opportunity.


    From Brandes' Global Equity Fund first quarter 2016 commentary.

      


  • Brandes Global Equity Fund 1st Quarter Commentary

    Equity markets worldwide closed a volatile first quarter of 2016 with mixed performance. After posting losses through mid-February, many markets recovered, fueled by a rebound in oil prices and data pointing to the U.S. economy’s relative strength. Federal Reserve officials gave upbeat assessments of the economy while scaling back the number of rate increases expected this year, citing risks posed by global economic and financial developments.

      


  • Charles Brandes Sells Out Stake in OmniVision Technologies

    Guru Charles Brandes (Trades, Portfolio) sold out his 1,622,993-share stake in Omnivision Technologies (NASDAQ:OVTI) for an average price of $28.16 per share in the first quarter.


    Brandes netted a 13.43% return on investment (ROI) after he increased his stake by fivefold during the third quarter of 2015.

      


  • Brandes Funds Comments on Publicis

    Publicis (XPAR:PUB) is the world’s third-largest global ad agency holding company, with many valuable brands such as Saatchi & Saatchi, Leo Burnett, Razorfish, ZenithOptimedia, and Starcom MediaVest. Publicis has historically been a well-run company with a sound balance sheet and industry-leading margins.


    In our view, the business model of ad agencies has attractive economics given their variable cost structure, industry consolidation, and exposure to long-term ad spending and global gross domestic product growth. While the industry as a whole appears to be valued somewhat fully by the market, Publicis has been the recent exception due to concerns over slowing organic growth, a handful of recent account losses and its acquisition of Sapient (its largest acquisition to date), which was seen as expensive.

      


  • Brandes Funds Comments on Credit Suisse

    Credit Suisse (NYSE:CS) saw its shares fall over 30% in the quarter as the market remained concerned about the company’s restructuring and its negative effect on financial results over the next year. Nonetheless, we continue to believe Credit Suisse has an economically attractive business model and is significantly discounted at its valuation of 0.7x tangible book value as of March 31.


    From Brandes International Equity Fund first quarter 2016 commentary.

      


  • Brandes Funds Comments on Barclays

    Barclays (LSE:BARC) declined as it announced a dividend cut and a rationalization of some of its businesses in efforts to focus on its core U.K. and U.S. markets and improve its capital position. Trading at 50% of tangible book value at quarter end, Barclays offers, in our opinion, an attractive risk/reward tradeoff as we believe it should see the benefits of its restructuring over the next couple of years.


    From Brandes International Equity Fund first quarter 2016 commentary.

      


  • Brandes International Equity Fund Q1 Commentary

    Market Overview

      


  • Brandes Funds Comments on Embraer

    Brazilian regional jet manufacturer Embraer (NYSE:ERJ) also weighed on returns as the real’s appreciation presented a headwind for the company, which derives the majority of its sales outside Brazil. Moreover, Embraer’s 2015 earnings indicated margin compression and the company issued guidance that was lower than market expectations. Pressure on the defense segment also hurt performance.


    The margin compression was not surprising to us given the product transition that is underway in Embraer’s commercial aircraft division. With regard to the defense segment, we see the issue astemporary as it is driven by a cut in the Brazilian defense budget and we believe Embraer will generate more defense revenue from abroad over the longer term. Accordingly, it is our view that the long-term investment thesis for Embraer remains compelling.

      


  • The Investors’ Dilemma: Why 2016 May Be a Turning Point - Brandes Investment Funds

    Many institutional investors ostensibly support the idea of focusing on long-term horizons. “Short-termism” suggests speculation, with exposure to the randomness of volatile markets. For institutions, the investors’ dilemma is that their obligations are long term but regulatory and behavioral pressures increasingly exert short-term influences on their decisions. Institutional funds and their investment managers are stewards of the capital entrusted to them, with liabilities that may have a multi-decade or even a multi-generational time horizon. They must maintain a long-term perspective.

      


  • Avon's Price Looks Attractive Enough

    Avon Products Inc. (NYSE:AVP) is a $1.64 billion market cap company, which is the world's leading direct marketer of cosmetics, toiletries, fashion jewelry and fragrances, with about 6 million sales representatives worldwide.


    Strategic alternatives

      


  • Charles Brandes Trims Stake in South American Petroleum Company

    Charles Brandes (Trades, Portfolio) of Brandes Investment bought more than two dozen new stakes in the first quarter, but most were comparatively small investments in companies serving primarily the Northern Hemisphere. His largest transaction was his reduction of a South American stake.


    Brandes sold more than 37% of his stake in Petroleo Brasileiro SA Petrobras (NYSE:PBR.A), a Brazilian petroleum company. The guru sold 22,297,024 shares for an average price of $3 per share. The transaction had a -1.15% impact on Brandes’ portfolio.

      


  • Brandes Emerging Markets Value Fund 1st Quarter Commentary

    Market Overview

      


  • Guru Stocks With Low PS Ratio, Wide Margin of Safety

    According to GuruFocus' All-in-One Screener, the following are companies with a market cap above $5 billion that are trading with a very low P/S ratio.


    Telecom Italia SpA (TI) is trading at about $12 with a P/S ratio of 1 and an estimated forward P/E multiple of 11.68. The company has a market cap of $22.45 billion and over the last 10 years, the stock has dropped by 61%. During the last 52 weeks, the price has been as high as $14.18 and as low as $8.89.

      


  • Charles Brandes' Top Buys During the 4th Quarter

    Charles Brandes (Trades, Portfolio), chairman of Brandes Investment Partners, increased his stakes in many stocks in the fourth quarter.


    He raised his stake in Credit Suisse Group AG (CS) by 121.44%. The deal had an impact of 0.52% on the portfolio.

      


  • Charles Brandes Bets on Aaron's, Small-Cap ETF

    Charles Brandes (Trades, Portfolio) is the portfolio manager for the US Equity and Global Equity strategies at Brandes Investment Partners, the firm he founded in 1974. During the fourth quarter, he initiated new positions in 13 new stocks, according to data reported by GuruFocus Real Time Picks.

    Aaron’s Inc. (NYSE:AAN)  


  • Brandes Makes a Variety of Reductions in 4th Quarter

    Charles Brandes (Trades, Portfolio), chairman of Brandes Investment Partners, reduced 89 stakes in his portfolio in the fourth quarter. His most noteworthy reductions crisscrossed the globe and spanned an investing spectrum that included several in oil and gas companies but also touched on banking and financial services and technology stocks.


    Brandes made his most significant fourth-quarter reduction in his stake in Embraer SA (NYSE:ERJ), a Brazilian aerospace and defense company. Brandes trimmed his stake by more than 8%, selling 980,533 shares for an average price of $29.38 per share. The transaction had a -0.37% impact on Brandes’ portfolio.

      


  • Brandes Investment Trust Comments on MediaTek

    Fund activity was relatively light in the quarter. The emerging markets investment committee initiated a position in Taiwanese semiconductor company MediaTek. MediaTek (TRE:2454) is the world’s second-largest supplier of mobile phone-related semiconductors. The company has benefited significantly over the past few years due in large part to its strong relationships with smartphone vendors in China, where growth has been significant.


    MediaTek competes in a difficult market environment, with relatively low barriers to entry and low customer stickiness. In addition, it is unlikely that MediaTek’s core end market (i.e. Chinese smartphones) can sustain the growth it has delivered in recent years, potentially keeping future returns from being as strong as they have been.

      


  • Brandes Investment Trust Comments on Cemex

    Holdings in Mexico hurt returns in the fourth quarter, notably cement company Cemex (NYSE:CX). With the majority of Cemex’s debt denominated in U.S. dollars, concerns about the impact of rising U.S. interest rates have added to investor worries over intensifying competition in the company’s home market. Although leverage remains a key concern for Cemex, it is not, in our opinion, as big of a risk as it was a few years ago. We have been encouraged by the initiatives the company’s management has taken in terming out debt maturities, locking in lower interest rates, successfully negotiating with key creditors, and minimizing shareholder dilution. Moreover, while rising U.S. rates may be a near-term concern, we view Cemex primarily as a U.S.-dollar denominated business and believe the company has the ability to preserve its long-term earnings power by potentially increasing its prices to offset the impact of any foreign-currency devaluations.


    Brandes Emerging Markets Value Fund fourth quarter commentary.

      


  • Brandes Investment Trust Comments on Adecoagro

    Another positive contributor to returns was Adecoagro (NYSE:AGRO), a Latin American agricultural company with assets in Argentina, Brazil and Uruguay. Adecoagro’s shares, which performed well throughout 2015, benefited in the fourth quarter from a December announcement by the recently elected Argentinian president, Mauricio Macri, that he would sign a decree to lower export taxes on soybeans, corn and wheat.


    Brandes Emerging Markets Value Fund fourth quarter commentary.

      


  • Brandes Investment Trust Comments on APR Energy

    APR (LSE:APR)’s share price increased following the company’s announcement in October that it had agreed to a buyout by a group of investment firms for approximately £175 million. The company supplies interim power plants, mainly in emerging-market countries, and has faced a difficulty in recent years after being forced to exit previously profitable markets.


    Brandes Emerging Markets Value Fund fourth quarter commentary.

      


  • Brandes Investment Trust Comments on Reliance Infrastructure

    Reliance Infrastructure (BOM:500390) performed well after announcing a number of divestment initiatives intended to reduce debt, including the sale of a stake in its Mumbai -based power-transmission business. Additionally, the company has short- listed a number of potential buyers for its cement assets and has been in talks to monetize 11 revenue-generating road projects. These moves should allow Reliance Infrastructure to increase its focus on the defense sector.


    Brandes Emerging Markets Value Fund fourth quarter commentary.

      


  • Brandes Emerging Markets Value Fund 4th Quarter Commentary

    Market Overview

      


  • 10 Fund Managers Are Totally Wrong on GlaxoSmithKline

    There are four big positions by guru investors in GlaxoSmithKline (GSK)  starting with Ken Fisher (Trades, Portfolio) who owns 11.5 million shares, John Rogers (Trades, Portfolio) taking 1.4 million shares, Charles Brandes (Trades, Portfolio) with 4.6 million shares and ending with HOTCHKIS & WILEY at 12.4 million shares.


      


  • Charles Brandes Ups Several Stakes for Consecutive Quarters

    Charles Brandes (Trades, Portfolio) is the founder and chairman of Brandes Investment Partners. He manages multiple portfolios including U.S. Equity and Global Equity. The following stocks are the holdings Brandes increased over the past two quarters.


    Citizens Financial Group Inc. (CFG)

      


  • Brandes Investment Trust Comments on Otsuka Kagu

    Established in 1969, Otsuka Kagu (TSE:8186) is one of Japan’s largest furniture retailers and operates in a fairly fragmented industry. The majority of the company’s sales are generated in the Kanto region, which includes the greater Tokyo metropolitan area. The population in this region has grown over the last two decades as aging baby boomers have been attracted to the conveniences the city offers.

      


  • Brandes Investment Trust Comments on Gedeon Richter

    Gedeon Richter (LSE:0QFP) is a manufacturer of both branded and generic pharmaceutical products. In recent years, the company has been transitioning its business model to become more of a “specialty pharma” with a stronger emphasis on branded drugs, an area that requires more research & development (R&D) effort but historically has been more profitable.


    We began purchasing Gedeon Richter in the first half of 2014. At the time, geopolitical concerns in Russia, Ukraine and other member countries of the Commonwealth of Independent States (CIS), which collectively accounted for over 40% of Gedeon Richter’s revenue, appeared to be overly discounted in the company’s share price. We took comfort in Gedeon Richter’s long history of local operations in the region, including local manufacturing in Russia, which should support its foothold there. Moreover, we believed the market underappreciated the prospects offered by Gedeon Richter’s women’s health division, its diversified exposure to regions with secular growth potential, as well as its R&D optionality.

      


  • Brandes Investment Trust Comments on Unilever

    One of the world’s largest consumer product companies, Unilever (NYSE:UL) maintains a leadership position in many food, household and personal care categories. We initially purchased the shares when many questioned the company’s ability to sustain revenue growth. Despite market concerns, we saw a solid business in Unilever that generated strong free cash flow while trading at a discount to our estimate of its intrinsic value. Recently, the market started to show some appreciation for Unilever’s strengths and potential for operating-margin improvement, driving its shares to trade at high multiples of earnings compared to levels seen over the past decade. We exited our position when the shares rose toward our estimate of their true worth,.


    From the Brandes Global Equity Income Fund letter for the year ended Sept. 30, 2015.

      


  • Brandes Investment Trust Comments on Schneider Electric

    Schneider (XPAR:SU)’s key businesses include operations in low-voltage and building automation, discrete and process automation, critical power and cooling, and medium voltage and grid automation. Given that emerging markets make up nearly 45% of Schneider’s sales, some may be worried that potentially slowing economic growth in many developing countries would negatively affect the company’s businesses, especially those which are construction-driven. Additionally, the company has a penchant for mergers and acquisitions, which can carry risks of overpayment as well as integration and execution uncertainties.



    We believe these risks are more than fully reflected in Schneider’s share price. Among other positive attributes, Schneider has generated high returns on incremental capital and possesses a reasonably healthy balance sheet with strong free cash flow.

      


  • Brandes Investment Trust Comments on Leucadia

    Leucadia (NYSE:LUK) is a diversified holding company with interests in various businesses, ranging from investment banking, asset management, and commercial mortgage banking & servicing to beef processing and oil & gas exploration. Despite a market capitalization in excess of $5 billion, Leucadia has lacked coverage by Wall Street research analysts.



    We believe Leucadia has a number of positive attributes. The company is conservatively capitalized and traded at less than its reported book value. Additionally, Leucadia has a history of being strategic and value oriented, and we appreciate that management’s significant ownership aligns its incentives with shareholder interests. These factors led us to conclude that the shares were trading at an attractive discount to our estimate of the company’s intrinsic value.

      


  • Brandes Investment Trust Comments on Emerson Electric

    Emerson Electric (NYSE:EMR) is another high-quality company with a strong competitive position, conservative balance sheet and attractive long-term returns on capital. Similar to Schneider’s case, over the last few years, the market has become concerned about Emerson’s exposure to emerging markets. Investors also seem worried about the cyclicality of its process automation business, particularly its high exposure to the oil & gas end market.



    Despite the negative sentiment, we believe Emerson is well positioned to continue generating value in each of its business segments, which have attractive long-term growth prospects based on our analysis. While concerns surrounding Emerson’s oil & gas exposure and the cyclicality of the process automation business are warranted, we feel that its shares are overly discounted at the company’s current valuation.

      


  • Brandes Investment Trust Comments on Toyota

    Automaker Toyota (NYSE:TM) was sold in the second quarter of 2015.We initially purchased Toyota in 2010 as the company suffered from news of unintended acceleration in some of its vehicles and the resulting recall, causing its stock to trade at a significant discount compared to its history and its peers. Toyota also faced major challenges from low automobile demand in its major markets and a strong yen, which made cars exported from Japan less competitive.



    Over the past several years, Toyota has managed to address the recall issue, which led to improved investor sentiment. Additionally, the weakening yen, combined with a strong recovery in automobile demand in many markets, especially in the United States, drove up Toyota’s share price significantly over the last year. We decided to divest our position after Toyota’s shares appreciated to our estimate of the company’s long-term intrinsic value.

      


  • Brandes Global Equity Fund Annual Letter 2015

    Dear Fellow Investor,


    Market-moving headlines sent global equity markets lower and volatility higher in the last 12 months amid a string of concerns that have kept uncertainties afloat.

      


  • Brandes Investment Trust Comments on Schneider Electric

    Schneider (XPAR:SU) provides electrical products and systems addressing a wide range of industrial, commercial and consumer markets. Key businesses include operations in low-voltage and building automation, discrete and process automation, critical power and cooling, and medium voltage and grid automation. Schneider’s revenues are fairly diversified, with 28% generated in Western Europe, 28% in Asia Pacific, 25% in North America and 19% in the rest of the world.


    The market appears to underappreciate Schneider’s potential. Given that emerging markets make up nearly 45% of the company’s sales, some may be worried that potentially slowing economic growth in many developing countries would negatively affect Schneider’s businesses, especially those which are construction-driven. Additionally, the company has shown a penchant for mergers and acquisitions, which can carry risks of overpayment as well as integration and execution uncertainties.

      


  • Brandes Investment Trust Comments on Petrobras

    Among the names above, Petrobras hurt returns the most. The company’s shares continued to suffer as a result of a number of factors, including the economic situation in Brazil, a corruption scandal and a recent debt downgrade. While we recognize that the risks to our investment continue to be elevated given Petrobras’ levered balance sheet, high incremental funding needs over the next five years, current low oil price and the uncertain political environment in Brazil, we believe the risk/reward tradeoff remains attractive at the company’s current valuation. Over the longer term, we see a number of reasons for optimism, including:




  • Brandes International Equity Fund Annual Letter 2015

    Dear Fellow Investor,

      


  • 5 Guru Picks in Volatile Biotech Industry

    Biotech and pharmaceutical stocks made some of the biggest headlines this year, as 2015 saw massive waves of M&A activity, including the Pfizer (NYSE:PFE) and Allergan (NYSE:AGN) merger, the second-largest deal of all time valued at $160 billion. Other companies found themselves in the spotlight for less than desirable reasons, such as Valeant Pharmaceuticals (NYSE:VRX), whose stock has tanked in the past several months.


    Using GuruFocus’ All-in-One Screener, there are several stocks in the industry held by a wide number of gurus that may be worth more research, even in the often volatile pharmaceutical sector.

      


  • Charles Brandes' Holdings With High Yields

    Charles Brandes (Trades, Portfolio) is the chairman of Brandes Investment Partners. He started the firm in 1974 and manages multiple portfolios including U.S. Equity and Global Equity. Here is a look at his holdings with high yields.


    Mobile TeleSystems PJSC (MBT)

      


  • Brandes Investment Trust Comments on Companhia de Saneamento Basico de Estado de São Paulo

    During the quarter, we also took advantage of the decline in Brazilian equities to selectively add to a number of our positions there, including in government-owned water utility Companhia de Saneamento Basico de Estado de São Paulo (Sabesp) (NYSE:SBS).


    Sabesp provides public water and sewage services to a broad range of customers in São Paulo, Brazil’s richest and most populous state. São Paulo has recently been grappling with the worst drought in 80 years. Water levels in the Cantareira system of reservoirs, which normally supplies roughly half of the 20 million residents, have fallen to just 5% of capacity. In our view, the necessary cutbacks on water deliveries will result in Sabesp earning below its regulated rate of return. This will likely continue until the drought is over or the company is able to supplement the state’s water supply. While the investment committee cannot predict the weather, we feel that Sabesp remains an attractive investment opportunity that merits a continued inclusion in the Fund.

      


  • Brandes Investment Trust Comments on Chemical Works of Gedeon Richter

    Other major Fund activity included the full sale of Chemical Works of Gedeon Richter (BUD:RICHTER), a Hungary-based manufacturer of both branded and generic pharmaceutical products. In recent years, the company has been transitioning its business model to become more of a “specialty pharma” with a stronger emphasis on branded drugs, an area that requires more research & development (R&D) effort but historically has been more profitable.


    We began purchasing Gedeon Richter during the first half of 2014. At the time, geopolitical concerns in Russia, Ukraine and other member countries of the Commonwealth of Independent States (CIS), which collectively accounted for over 40% of Gedeon Richter’s revenue, appeared to be overly discounted for in the company’s share price. We took comfort in Gedeon Richter’s long history of local operations in the region, including local manufacturing in Russia, which should support its foothold there. Moreover, we believed the market underappreciated the prospects offered by Gedeon Richter’s women’s health division, its diversified exposure to regions with positive secular growth potential, as well as its R&D optionality.

      


  • Brandes Investment Trust Comments on Sociedad Quimica y Minera de Chile

    In the third quarter, the emerging markets investment committee initiated a position in Sociedad Quimica y Minera de Chile (NYSE:SQM). Founded in 1968 and headquartered in Santiago, Chile, SQM produces and distributes specialty plant nutrition solutions, potassium fertilizers, industrial chemicals, iodine and its derivatives, as well as lithium and its derivatives.


    For much of 2014 and 2015, SQM’s reputation has been marred by governance concerns. In March 2015, Canada-based PotashCorp withdrew its board members after clashing with controller Julio Ponce over the handling of a tax probe and allegations of payments to politicians by SQM.

      


  • Brandes Investment Trust Comments on Yue Yuen

    Additionally, the Fund benefited from its position in Hong Kong-based Yue Yuen (HKSE:00551), whose share price increased after it announced strong results for the first half of 2015. Yue Yuen is the world’s largest manufacturer of athletic and casual footwear, operating as an original equipment manufacturer (OEM) and original design manufacturer (ODM) for major brands such as Nike, Adidas, Reebok, Asics, New Balance and Puma.

      


  • Brandes Investment Trust Comments on O2 Czech Republic

    During the period, O2 Czech Republic (LSE:O2CZ) contributed positively to performance. The telecommunication services company finalized the spin- off of its infrastructure assets into a new entity in early June and its share price moved higher in the third quarter as its majority owner, PPF, continued its buyout of the company. In August, PPF disclosed that it owned nearly 85% of O2 Czech Republic and confirmed that it would not attempt to raise its stake above 90%.

      


  • Brandes Investment Trust Comments on Panamanian Copa Holdings

    Another major performance detractor during the quarter was Indonesian telecommunication services provider XL Axiata (OTCPK:PTXKY). In March 2015, the company announced a new business strategy which included a shift in focus from customer volume to service quality. Effectively, the company raised the price of starter SIM packs while aiming to upgrade its data services—a move which may stifle volume in the near term but could potentially boost longer-term profitability. Since the announcement, the market has reacted negatively to the fact that XL Axiata’s 2015 revenue and EBITDA will likely remain stagnant compared to last year as the company seeks to clean up its subscriber base and attempts to reprice. We view the company’s action as a bold but sensible strategy to generate greater long-term value.

      


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