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Jeremy Grantham – 2Q Reductions in a ‘Dangerous Year’

August 22, 2013 | About:
Sally Jones

Sally Jones

49 followers
Guru Jeremy Grantham is the co-founder and chief investment strategist of Grantham Mayo van Otterloo, referred to as GMO, a Boston-based asset management firm with offices around the world. Grantham is a highly knowledgeable investor across a spectrum of markets. Last year Grantham, a British investor, commented on 2013 as “a dangerous year” in an interview with Forbes, saying: “History is quite clear. There has been, on average, no money made in year one and two after a Presidential election going back to 1932, after you adjust for inflation. All the money is made in year three with an adequate return in year four. In general they stimulate in year 3 to create a wealth effect in year four and it works and everyone is happy. You can’t do that every year. At some point you have to address a budget that is way out of balance.

Jeremy Grantham’s portfolio currently lists 647 stocks, with 94 of them new, with a total portfolio value of $3.83 billion, and a quarter-over-quarter turnover of 9%. GMO’s top three investment sectors are weighted with consumer defensive at 25.2%, healthcare at 23.7% and energy at 5.7%.

With numerous trades in second quarter, here are six of Guru Grantham’s high percentage reductions, as of June 30, 2013:

J.C. Penney Co. Inc. (JCP): Reduced

Down 46% over 12 months, J.C. Penney Co. Inc.has a market cap of $2.91billion; its shares were traded at around $13.20. The P/B ratio is 1.00.

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Guru Action: As of June 30, 2013, Grantham reduced his position by 61.82%, selling 88,100 shares at an average price of $16.83, taking a loss of 21.4%.

He has averaged a loss of 54% on 480,612 shares bought at an average price of $28.44 per share. On shares sold, he averaged a loss of 53% on 426,212 shares sold at an average price of $28.07 per share.

His current shares remaining: 54,400.

Dean Foods Company (DF): Reduced

Up 12% over 12 months, Dean Foods Companyhas a market cap of $1.83 billion; its shares were traded at around $9.73. The P/B ratio is 2.70.

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Guru Action: As of June 30, 2013, Grantham reduced his position by 27.22%, selling 10,465 shares at an average price of $10.16, taking a loss of 4.9%.

He has averaged a gain of 20% on 321,840 shares bought at an average price of $8.07 per share. On shares sold, he averaged a gain of 18% on 313,663 shares sold at an average price of $8.18 per share.

His current shares remaining: 27,977.

Mechel OAO (MTL): Reduced

Down 51% over 12 months, steel company Mechel OAOhas a market cap of $1.28 billion; its shares were traded at around $3.07. The P/B ratio is 0.50.

Tracking historical revenue versus net income:

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Guru Action: As of June 30, 2013, Grantham reduced his position by 40.71%, selling 12,100 shares at an average price of $3.65, for a loss of 15.9%.

He has averaged a loss of 79% on 6,675,710 shares bought at an average price of $14.48 per share. On shares sold, he averaged a loss of 79% on 6,658,090 shares sold at an average price of $14.72 per share.

His current shares remaining: 17,620.

CYS Investments Inc. (CYS): Reduced

Down 51% over 12 months, CYS Investments, a residential REIT company,has a market cap of $1.18 billion; its shares were traded at around $6.85. The P/B ratio is 0.70.

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Guru Action: As of June 30, 2013, Grantham reduced his position by 31.46%, selling 32,862 shares at an average price of $11.26, for a loss of 39.2%.

He has averaged a loss of 47% on 104,462 shares bought at an average price of $12.82 per share. On shares sold, he averaged a loss of 39% on 32,862 shares sold at an average price of $11.26 per share.

His current shares remaining: 71,600.

Cemex, S.A.B. de C.V. (CV): Reduced

Up 59% over 12 months, building materials company Cemex, S.A.B. de C.V.has a market cap of $13.29 billion; its shares were traded at around $12.15. The P/B ratio is 3.70.
1377196547044.png

Guru Action: As of June 30, 2013, Grantham reduced his position by 61.41%, selling 94,017 shares at an average price of $11.25, for a gain of 7.8%.

He has averaged a gain of 98% on 465,229 shares bought at an average price of $6.12 per share. On shares sold, he averaged a gain of 24% on 409,761 shares sold at an average price of $9.80 per share.

His current shares remaining: 55,468.

Grantham’s history of high gains:

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Computer Sciences Co. (CSC): Reduced

Up 57% over 12 months, the information technology servicesprovider Computer Sciences Co.has a market cap of $7.6 billion; its shares were traded at around $51.57. The P/B ratio is 2.60.

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Guru Action: As of June 30, 2013, Jeremy Grantham reduced his position by 32.29%, selling 7,944 shares at an average price of $45.73, for a gain of 12.4%.

He has averaged a gain of 51% on 231,700 shares bought at an average price of $33.93 per share. On shares sold, he averaged a gain of 26% on 671,752 shares sold at an average price of $40.77 per share.

His current shares remaining: 16,656.

Here is the complete portfolio of Jeremy Grantham.



Be sure to read:

1. Jeremy Grantham's Undervalued Stocks

2. Jeremy Grantham's Top Growth Companies

3. Jeremy Grantham's High Yield stocks

4. Stocks that Jeremy Grantham keeps buying

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About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

Rating: 3.7/5 (7 votes)

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