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Charles Brandes' Top 5 Holdings

August 09, 2013 | About:
Monica Wolfe

Monica Wolfe

133 followers
A disciple of value investing Guru Benjamin Graham, Charles Brandes founded Brandes Investment Partners in 1974. Brandes' funds continue to perform well, with both the Global Equity fund and the International Equity fund producing double digit returns over the past year.

Over the second quarter, Brandes bought 11 new stocks bringing his total number of stocks held to 169. The guru’s portfolio is currently valued at over $7.9 billion.



The following five companies represent Charles Brandes ’ top five holdings.

TE Connectivity (TEL)

Charles Brandes’ largest holding comes from TE Connectivity where the guru holds 5.4% of his total portfolio. The guru holds 9,546,231 shares of TE, representing 2.27% of the company’s shares outstanding.

During the second quarter Brandes reduced his position in TE Connectivity by -18.75%. The guru sold 2,202,757 shares of the company’s stock at an average price of $43.79, which was at the time of the sell the company’s 10-year high in price. Since his reduction, the share price is trading up an additional 15.6%.

Brandes’ holding history as of the second quarter:



TE Connectivity designs and manufactures products involved in electronic connections for industries including automotive, energy and industrial, broadband communications, consumer devices, health care and aerospace and defense.

TE Connectivity’s historical revenue and net income:

1376069848587.png

The company’s third quarter results:

· Adjusted EPS were $0.88, up 11% over the prior year.

· Net sales were $3.45 billion.

· FCF of $431 million, and $1.1 billion for the fiscal year to date.

· Returned $314 million to shareholders through dividends and share repurchases

The Peter Lynch chart shows that TE currently appears to be overvalued:

1376069895052.png

TE Connectivity has a market cap of $20.94 billion. Its shares are currently trading at around $50.64 with a P/E ratio of 16.70, a P/S ratio of 1.60 and a P/B ratio of 2.70.

America Movil, S.A.B. de C.V. (AMX)

Brandes’ second largest holding is in America Movil. The guru currently holds 16,201,670 shares, representing 0.43% of the company’s shares outstanding and 4.4% of his total portfolio.

During the second quarter Brandes made a slight increase in his holdings. The guru upped his position 5.13% by adding 790,699 shares to his stake. He bought these shares at an average price of $20.46 per share. Since his buy, the share price has increased approximately 1.8%.

Brandes’ holding history as of the second quarter:



America Movil, based in Mexico, is the largest provider of wireless communications services in Latin America based on subscribers. The company offers services in 18 countries, maintains more than 263 million mobile customers and holds the capability of coverage for a combined population of 847 million.

America Movil’s historical revenue and net income:

1376069266076.png

The company’s second quarter financials reported:

· Revenues were up 1.6% to 194.8 billion pesos.

· EBITDA was 65 billion pesos

· Net income was 14.2 billion pesos, up 7.9% from the year before.

· Share buybacks of 46.2 billion pesos and the acquisition of ownership interests in various companies which totaled 16.7 billion pesos.

The Peter Lynch chart shows that America Movil appears to be undervalued:

1376069292977.png

America Movil has a market cap of $79.93 billion. Its shares are currently trading at around $21.08 with a P/E ratio of 11.90, a P/S ratio of 1.30 and a P/B ratio of 4.00. The company had an annual average earnings growth of 33% over the past ten years.

GuruFocus rated America Movil the business predictability rank of 3.5-star.

Tim Holding Company (TSU)

Charles Brandes’ third largest position is in the Tim Holding Company where he maintains 4.3% of his total portfolio. The guru currently owns 18,609,217 shares of Tim Holding, representing 3.85% of the company’s shares outstanding.

During the second quarter, Brandes increased his position by 14.69%. The guru purchased a total of 2,383,416 shares at an average price of $20.08 per share. Since his increase, the share price is trading up 1.8%.

Brandes’ holding history as of the second quarter:



Tim is the largest company in Brazil that offers mobile cellular service throughout the Brazilian territory, by means of its subsidiaries TIM Celular S.A. and TIM Nordeste S.A. The company is the largest GSM (Global System for Mobile communications) operator of the country, in terms of clients and revenues.

Tim Holding’s historical revenue and net income:

1376068195126.png

The company’s second quarter results highlighted:

· Organic total revenues increased 9.7% year over year, reaching R$4.99 billion.

· Net service revenues grew by 3.1% from last year.

· EBITDA reached R$1.26 billion, representing a 4.4% year over year increase

· Net income grew by 17.9% to R$405.8 million.

The Peter Lynch chart shows that Tim Holding Company appears to be undervalued:

1376068455102.png

Tim Holding has a market cap of $9.98 billion. Its shares are currently trading at around $20.63 with a P/E ratio of 8.00, a P/S ratio of 0.60 and a P/B ratio of 1.50. The company has seen an annual average earnings growth of 16% over the past five years.

Microsoft Corporation (MSFT)

Another one of Brandes’ top holdings comes from Microsoft Corporation. The guru holds 8,488,452 shares of Microsoft, representing a meager 0.10% of the company’s shares outstanding and 3.7% of his total portfolio.

Brandes’ reduced his position in the software company by -11.31% during the second quarter. The guru sold a total of 1,082,705 shares valued at $32.76 per share. Since his sell, the price per share has increased a minor 0.1%.

Brandes’ holding history of Microsoft as of June 30:



Microsoft develops, manufactures, licenses and supports a wide range of software products and services for many different types of computing devices.

Microsoft’s historical revenue and net income:

1376067496547.png

The company’s fourth quarter and fiscal year 2013 results reported:

· Quarterly revenue of $19.9 billion

· Net income of $4.97 billion, or $0.59 per share.

· For FY13, Revenue was $77.85 billion

· Operating income was $26.76 billion, or $2.58 per diluted share.

The Peter Lynch chart shows that Microsoft currently appears to be undervalued:

1376067531956.png

Microsoft has a market cap of $273.14 billion. Its shares are currently trading at around $32.79 with a P/E ratio of 12.70, a P/S ratio of 3.60 and a P/B ratio of 3.50. The company has a dividend yield fo 2.70%. The company has also seen average earnings growth of 14.3% over the past ten years.

GuruFocus rated Microsoft the business predictability rank of 3.5-star.

Petroleo Brasileiro SA Petrobras (PBR.A)

Brandes’ fifth largest holding is in Petroleo Brasileiro SA Petrobras, where he made a notable increase to his holdings over the second quarter. The guru now owns 16,905,454 shares of Petrobras, representing 0.26% of the company’s shares outstanding and 3.3% of his total portfolio.

During the second quarter, Brandes upped his position in Petrobras by 41.11%. The guru added 4,925,493 shares to his stake at an average cost of $18.22 per share. Since his increase the price per share has dropped -19.4%.

Brandes’ holding history as of the second quarter:



It is an integrated oil and gas company in Brazil and in Latin America who is the supplier of crude oil and oil products. Its activities comprise five business segments: Exploration and Production, Supply, Distribution, Gas and Energy and International.

Petrobras’ historical revenue and net income:

1376067035232.png

The company is set to release its second quarter financial results Aug. 12.

According to the Peter Lynch Chart Petrobras appears to be undervalued:

1376067364609.png

Petroleo Brasileiro SA Petrobras has a market cap of $97.38 billion. Its shares are currently trading at around $14.93 with a P/E ratio of 10.20 and a P/S ratio of 0.60. The company has seen an annual average earnings growth of 9.8% over the past 10 years.

You can check out Charles Brandes’ second quarter portfolio here.

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Rating: 3.4/5 (5 votes)

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