Mohnish Pabrai calls himself a “shameless cloner”, as he attributes his success to following Warren Buffett. But he must be much more than that because he does not own any stocks Berkshire Hathaway owns besides he owns Berkshire Hathaway itself, and he has achieved more than 28% a year since 1999.
Over the part months Mohnish Pabrai has been consistently buying Venezuela oil company Harvest Natural Resources, Inc. (HNR) at prices around $9.8, and most recently at $9.4. GuruFocus has been reporting this in the section of Real Time Picks to Premium Members. As of latest, Mohnish Pabrai owns more than 5.3 million shares of HNR in his funds, representing more than 14% of the company’s total shares outstanding. Today Venezuela's National Assembly approved the conversion of Harvest Natural Resources Inc.'s operations in that country to a new structure under which Venezuela would take a controlling stake. Following this announcement, HNR shares rises more than 37 percent to close at $13.50.
Mohnish Pabrai is the largest institutional shareholder of Harvest Natural Resources, Inc., and HNR is one of the largest holdings of Pabrai Funds, representing about 12% of the total portfolio of Pabrai Funds. The 37% of HNR share price surge alone contributed about 5% of gain to the total portfolio of Pabrai Funds. No wonder why he can achieve 28% a year.
At price of $13.5, is HNR still undervalued? Maybe, as GuruFocus users have voted for a fair value of $25. Will Mr. Pabrai think so? We don’t know. However, GuruFocus will continue monitor his actions on HNR closely and report them with very little delay in “Real Time Picks” to Premium Members. Free members will get a quarterly update.
By the way, this is the first article that GuruFocus comments about Mr. Pabrai and we would like to give a little more background. We are very proud that Mr. Pabrai lists GuruFocus as one of his favorite sources for generating investment ideas in his new book, The Dhandho Investor. Evidently Mr. Pabrai is one of the earliest registered users of GuruFocus, his user ID of 48. For your information, if you register today, you will have a user ID of around 20,000.
Mr. Pabrai has been rewarded very handsomely over the years by finding bargains. Premium Members, if you followed Mr. Pabrai and bought HNR, most probably you already made much more than the $249/year membership fee you have paid. We are very proud of that. “Real Time Picks” is just one of the Premium Tools we offer to Premium Members, currently it also lists other most recent purchases of Mr. Pabrai. It also lists the recent significant trades of outstanding Gurus Arnold Van Den Berg, David Winters, David Einhorn and others. Today we updated some bargain purchases that spin-off Guru John Keeley made in May.
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