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

  • 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.

      


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