Charles Brandes

Charles Brandes

Last Update: 05-12-2016

Number of Stocks: 187
Number of New Stocks: 29

Total Value: $6,992 Mil
Q/Q Turnover: 7%

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

Charles Brandes Watch

  • 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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