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Mohnish Pabrai Buys CompuCredit Corp., Ternium S.A., Adds to Fairfax Financial Holdings Ltd, Sells Freightcar America Inc.

Mohnish Pabrai, known for his philosophy of "Heads I win, tails I don't lose much", the author of The Dhandho Investor, buys CompuCredit Corp., Ternium S.A., sells Freightcar America Inc. during the 3-months ended 06/30/2007, according to the most recent filings of his investment company, Pabrai Mohnish. Mohnish Pabrai owns 15 stocks with a total value of $469 million. These are the details of the buys and sells.

New Purchases: CCRT, TX,

Added Positions: BRK-B, FFH,

Reduced Positions: BRK-A, LEA, MDC, PNCL, SGU,

Sold Out: RAIL,

Added: Berkshirehathaway Inc. Cl B (BRK-B)

Mohnish Pabrai added to his holdings in Property & Casualty Insurance company Berkshirehathaway Inc. Cl B by 396.93%. His purchase prices were between $3578 and $3668, with an estimated average price of $3626.6. The impact to his portfolio due to this purchase was 9.43%. His holdings were 15,385 shares as of 06/30/2007.

No business summary available for BRK-B. BerkshireHathaway Inc. CL B has a market cap of $ billion, its shares were traded at around $3639 with .

Added: Fairfax Financial Holdings Ltd (FFH)

Mohnish Pabrai added to his holdings in Property & Casualty Insurance company Fairfax Financial Holdings Ltd by 25.57%. His purchase prices were between $192.61 and $228.61, with an estimated average price of $211. The impact to his portfolio due to this purchase was 2.47%. His holdings were 297,090 shares as of 06/30/2007.

Fairfax Financial Holdings Limited, through its subsidiaries, engages in property and casualty insurance and reinsurance, investment management, and insurance claims management activities. Fairfax Financial Holdings Ltd has a market cap of $3.36 billion, its shares were traded at around $193 with with P/E ratio of 52.43 and P/S ratio of 0.54.

New Purchase: CompuCredit Corp. (CCRT)

Mohnish Pabrai initiated holdings in Consumer Finance company CompuCredit Corp.. His purchase prices were between $33.15 and $37.88, with an estimated average price of $35.3. The impact to his portfolio due to this purchase was 12.02%. His holdings were 1,611,501 shares as of 06/30/2007.

CompuCredit Corporation provides credit and related financial services and products to underserved and un-banked consumers. It operates through four segments: Credit Cards; Investments in Previously Charged-Off Receivables; Retail Micro-Loans; etc. CompuCredit Corp. has a market cap of $1.12 billion, its shares were traded at around $23.12 with with P/E ratio of 32.41 and P/S ratio of 1.55.

New Purchase: Ternium S.a. (TX)

Mohnish Pabrai initiated holdings in Steel company Ternium S.a.. His purchase prices were between $25.58 and $31, with an estimated average price of $27.5. The impact to his portfolio due to this purchase was 10.59%. His holdings were 1,642,434 shares as of 06/30/2007.

Ternium S.A., through its subsidiaries, engages in the manufacture and distribution of flat and long steel products. It operates in three segments: Flat Steel Products, Long Steel Products, and Others. Ternium S.A. has a market cap of $5.75 billion, its shares were traded at around $28.97 with with P/E ratio of 6.72 and P/S ratio of 0.82.

Reduced: Pinnacle Airlines Corp. (PNCL)

Mohnish Pabrai reduced to his holdings in Airlines company Pinnacle Airlines Corp. by 34.17%. His sale prices were between $16.76 and $18.95, with an estimated average price of $17.8. The impact to his portfolio due to this sale was 4.1%. Mohnish Pabrai still held 1,378,538 shares as of 06/30/2007.

Pinnacle Airlines Corp., through its subsidiaries, operates as a regional airline that provides airline capacity to Northwest Airlines Corporation (Northwest) in the United States. Pinnacle Airlines Corp. has a market cap of $344.59 billion, its shares were traded at around $16.71 with with P/E ratio of 5.53 and P/S ratio of 0.44.

Reduced: MDC Holdings Inc. (MDC)

Mohnish Pabrai reduced to his holdings in Home Construction company Mdc Holdings Inc. by 56.42%. His sale prices were between $48.35 and $53.45, with an estimated average price of $50.9. The impact to his portfolio due to this sale was 0.93%. Mohnish Pabrai still held 140,901 shares as of 06/30/2007.

M.D.C. Holdings, Inc., through its subsidiaries, engages in building and financing homes in the United States. The company has two segments, Homebuilding, and Financial Services and Other. MDC Holdings Inc. has a market cap of $2.05 billion, its shares were traded at around $45.8 with with P/S ratio of 0.54.

Reduced: Star Gas Partners LP (SGU)

Mohnish Pabrai reduced to his holdings in Gas Distribution company Star Gas Partners Lp by 38.01%. His sale prices were between $4 and $4.83, with an estimated average price of $4.4. The impact to his portfolio due to this sale was 0.5%. Mohnish Pabrai still held 724,476 shares as of 06/30/2007.

Star Gas Partners, L.P. operates as a home heating oil distributor and services provider in the United States. It sells home heating oil; installs, maintains, and repairs heating and air conditioning equipment; and markets other petroleum products. Star Gas Partners LP has a market cap of $309.92 billion, its shares were traded at around $4.05 with with P/S ratio of 0.25.

Reduced: Berkshirehathaway Inc. Cl A (BRK-A)

Mohnish Pabrai reduced to his holdings in Property & Casualty Insurance company Berkshirehathaway Inc. Cl A by 96.06%. His sale prices were between $107400 and $110000, with an estimated average price of $109090. The impact to his portfolio due to this sale was 0.06%. Mohnish Pabrai still held 5 shares as of 06/30/2007.

Berkshire Hathaway, Inc. and its subsidiaries primarily engage in the insurance and reinsurance of property and casualty risks business. It provides automobile, multi line, and credit and income protection insurance; excess-of-loss reinsurance etc. BerkshireHathaway Inc. has a market cap of $172.65 billion, its shares were traded at around $111500 with with P/E ratio of 14.27 and P/S ratio of 1.54.

Reduced: Lear Corp. (LEA)

Mohnish Pabrai reduced to his holdings in Auto Parts company Lear Corp. by 98.83%. His sale prices were between $35.65 and $37.6, with an estimated average price of $36.3. The impact to his portfolio due to this sale was 0.03%. Mohnish Pabrai still held 7,001 shares as of 06/30/2007.

Lear Corporation and its subsidiaries engage in the design, manufacture, and sale of automotive seat, electrical distribution, and electronic products in the United States. Lear Corp. has a market cap of $2.34 billion, its shares were traded at around $30.37 with with P/S ratio of 0.14.

Sold Out: Freightcar America Inc. (RAIL)

Mohnish Pabrai sold out his holdings in Commercial Vehicles & Trucks company Freightcar America Inc.. His sale prices were between $45.36 and $51.56, with an estimated average price of $48.6. The impact to his portfolio due to this sale was less than 0.01%.

FreightCar America, Inc. engages in manufacturing, rebuilding, repairing, selling, and leasing freight cars used for hauling coal, other bulk commodities, steel and other metals, forest products, and automobiles in North America. FreightCar America Inc. has a market cap of $526.11 billion, its shares were traded at around $43.65 with with P/E ratio of 5.17 and P/S ratio of 0.41.


Rating: 3.4/5 (38 votes)

Comments

DaveinHackensack
DaveinHackensack - 7 years ago
Why isn't Alloy, Inc. (ALOY) listed among Pabrai's holdings? It's on the 13F: http://sec.gov/Archives/edgar/data/1173334/000095013707012316/c17848e13fvhr.txt
Myth465
Myth465 - 7 years ago
Great deal, I bought TX 2 months ago and it is my largest position. I also sold RAIL a few weeks ago. Hopefully great minds think a like.
gurufocus
Gurufocus premium member - 7 years ago
Davein, it is not Alloy, Inc. It is Universal Stainless & Alloy, Inc. (USAP), which is listed.

We have multiple steps to verify the accuracy of data.
DaveinHackensack
DaveinHackensack - 7 years ago
OK, thanks. I looked at the form again and see I misread it.
freehling
Freehling - 7 years ago
Anybody have any insight as to why he'd sell BRKA but buy BRKB? Presumably they represent the same value.
Bernard2222
Bernard2222 - 7 years ago
This is just a guess but I believe Pabrai sees Berkshire as a good place to put his capital while waiting for better opportunities to come up. Now that some stocks are becoming cheaper, perhaps he prefers owning class B stocks since they are more liquid and it would be easier for him to jump on an opportunity if he sees one in the near future.
freehling
Freehling - 7 years ago
That makes a lot of sense. Thanks.
crni
Crni - 7 years ago
In his book, Dhandho investor, he also gives an example of BRK arbitrage. BRK-A can be converted to 30 BRK-B at any time. Sometimes there are small price discrepancies between the two that allow to take 1% or so easily.
yhlbb
Yhlbb - 7 years ago
I am looking at the form 13F. How did gurufocus figure out his purchase prices of BRK-B?

gurufocus: "His purchase prices were between $3578 and $3668, with an estimated average price of $3626.6."

13F: BRK-B, value: $55,463,000, share: 15,385 ($55,463,000/15,385 = 3605).

Did I miss something?
lzou
Lzou - 7 years ago
Is CCRT a risky bet? Who know more details about this one?
musto
Musto - 7 years ago
There was a very interesting article about fairfax and it's ceo prem vatsa in either forbes or fortune about 3 months ago. This is a guy who talks like web, tries to act like web, but

unfortunately is light years behind him.

The article highlihted some of his questionably dealings among his subsidiaries.

I would be concerned to trust my hard earned money with a guy like him.

I don't what pabrai sees in him.

gurufocus
Gurufocus premium member - 7 years ago
Yhlbb: what Pabrai reported in 13F is the value based on the price of 06/30. Our prices are the average of the monthly trading price. We believe ours is more reasonable.
rhooper
Rhooper - 7 years ago
It has FCF growing around 20% over the last five years.

It has about 1/3rd of its mkt cap in cash.

DCF price is ~$70 at current ratio of mkt cap/FCF (2.34) assuming FCF growth is zero for next 10 years.

At first glance, this seems like a good buy.
AlbertaSunwapta
AlbertaSunwapta - 7 years ago
musto Wrote:

-------------------------------------------------------

> ...This is a guy who

> talks like web, tries to act like web, but

> unfortunately is light years behind him.

> The article highlihted some of his questionably

> dealings among his subsidiaries.

> I would be concerned to trust my hard earned money

> with a guy like him.

> I don't what pabrai sees in him.

>

Check out some of the others that have invested in Fairfax Financial over the years. Cundill, Markel, Fairholme... Markel is an insurance company so you'd think they'd be capable of a very complete analysis and isn't Fairholme a concentrated portfolio - so I'd hope they'd dig deep before investing as well. One thing though - I can't ever recall BRK taking a position in Fairfax Financial - even when it traded at what seemed like a fire sale price.

Interestingly, shortly after Buffett warned about derrivatives, I seem to recall Watsa warning about loan quality going into securitized ABSs, etc. Maybe Buffett put him in the right mindset. Nonetheless, Watsa's fears seem to be coming to some fruition.

AlbertaSunwapta
AlbertaSunwapta - 7 years ago
Further to Fairfax Financial's Prem Watsa, everyone really should read his comments about securitized loans - I found it in his 2003 Annual Report on pgs 15-16. Sounds bang on to me - yet everyone is saying that "crisis" wasn't predicted.

http://www.fairfax.ca/Assets/Downloads/040305ceo.pdf

musto
Musto - 6 years ago
Watsa's record on macro calls are not very impressive.

He lost a bundle with his puts during the Nasdaq heydays.

realbleps
Realbleps - 6 years ago
does anyone have a copy of the pabrai 2006 meeting transcript.. if so pls fwd to my email address ...REALBLEPS@HOTMAIL.COM
hameed
Hameed - 6 years ago
How come there is no mention of his holdings in Delta Financial Corp? DFC
AlbertaSunwapta
AlbertaSunwapta - 6 years ago
Yes - Fairfax Financial's bets that the high tech boom would bust were premature (as were Loews). A pity as I'd bought both hoping to profit from the eventual blowoff. (Myself - I bet against the Japanese mkt in 1989 and sold way too early. It's essentially a market timing game even on the seemingly sure things like bust following boom.)

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