Grantham is bullish on emerging markets. He predicts a 5.9% annual return over seven years in stocks in the class, compared to a negative 1.1% annual real return for U.S. large, and 3.7% for U.S. high quality stocks, according to the GMO 7-Year Asset Class Return Forecasts as of March 31, 2013.
Also, of the $75 billion GMO has put into equities, the U.S. equity portfolio has a value of only $37.5 billion.
The Top 5 New Holdings
Copano Energy LLC (NASDAQ:CPNO)
In fifth place, GMO bought 556,549 shares of Copano Energy LLC (NASDAQ:CPNO), a 0.06% portfolio weighting, in the first quarter.
Copano Energy LLC was formed in August 2001 and incorporated in the state of Delaware to acquire entities operating under the Copano name since 1992, and to serve as a holding company for its operating subsidiaries. Copano Energy LLC has a market cap of $3.18 billion; its shares were traded around $40.21 with a P/E ratio of 167.50 and P/S ratio of 2.08. The dividend yield of Copano Energy LLC stocks is 5.72%.
CTC Media Inc. (NASDAQ:CTCM)
GMO bought 2,550,585 shares of CTC Media Inc. for $10 per share on average in the first quarter as its fourth largest new position. It has a 0.08% portfolio weighting and equals 1.6% of the company’s outstanding shares. Shares have since gained 14% from his average purchase price.
CTC Media Inc. was incorporated in 1989 and commenced television operations in May 1994, initially broadcasting from its first owned-and-operated station. CTC Media Inc. has a market cap of $1.8 billion; its shares were traded around $11.51 with a P/E ratio of 20.60 and P/S ratio of 2.30. The dividend yield of CTC Media Inc. stocks is 4.70%.
Virgin Media Inc. (NASDAQ:VMED)
Virgin Media was GMO’s third largest new addition, at 659,487 shares purchased for $42 per share on average. The price increased 18% from the average purchase price.
Virgin Media Inc. is engaged in the entertainment and communications business, being a quad-play provider of broadband Internet, television, mobile telephony and fixed line telephony services that offer a variety of entertainment and communications services to residential and commercial customers throughout the U.S.
Virgin Media Inc. has a market cap of $13.82 billion; its shares were traded around $51.09 with a P/E ratio of 3.60 and P/S ratio of 2.60. The dividend yield of Virgin Media Inc. stocks is 0.30%. Virgin Media Inc. had an annual average earnings growth of 31.8% over the past 10 years.
GMO purchased 2,055,900 shares of its second largest new buy, Russian search company Yandex, for $24 per share on average, a 13% portfolio weighting. Yandex shares have since gained 11% from the average purchase price.
Yandex NV was incorporated in Netherlands. It is an Internet company in Russia operating search engines. Yandex NV has a market cap of $32.05 billion; its shares were traded around $26.63 with a P/E ratio of 30.5 and P/S ratio of 9.
iShares MSCI Emerging Markets Indx ETF (EEM)
Consistent with his outlook for emerging markets, Grantham purchased 4,636,445 shares of iShares MSCI Emerging Markets Indx at $44 per share on average, making it his largest new holding. The ETF price has since declined 1% from his average purchase price.
iShares MSCI Emerging Markets Indx (ETF) has a market cap of $41.04 billion; its shares were traded around $43.38. The dividend yield of iShares MSCI Emerging Markets Indx (ETF) stocks is 1.90%.
See further portfolio updates of Jeremy Gratham here. Also check out the Undervalued Stocks, Top Growth Companies and High Yield stocks of Jeremy Grantham.