Sarah Ketterer Buys Stake in United Continental Holdings

Guru adds to stakes in Johnson & Johnson, Delta Air Lines

Sep 09, 2015

Sarah Ketterer (Trades, Portfolio) is probably best described as a hands-on CEO at Causeway Capital Management, where she handles investment research in global financials and healthcare. She could also be described as a big-picture person, focusing on global equities as she does. In most quarters, her buying and selling tends to be pretty balanced, but, while she did sell some of her holdings in the second quarter, most of her activity involved buying new stakes and contributing to old ones.

Ketterer’s top second-quarter transactions were acquisitions of new stakes in United Continental Holdings Inc. (UAL, Financial), PPL Corp. (PPL, Financial) and American Express Co. (AXP, Financial).

Ketterer bought a 1,889,402-share stake in United Continental Holdings, a Chicago-based publicly traded airline holding company that owns United Air Lines, for an average price of $58.03 per share. The deal had a 2.93% impact on Ketterer’s portfolio.

United CEO Jeff Smisek stepped down earlier this week in the wake of a federal investigation into the relationship between United, the Port Authority of New York and New Jersey.

Ketterer purchased a 3,229,890-share stake in PPL, an Allentown, Pa., energy company, for an average price of $31.17 per share. The transaction had a 2.78% impact on Ketterer’s portfolio.

PPL has a market cap of $19.93 billion and an enterprise value of $39.18 billion. It has a P/E of 18.5, a Price/Book of 2.0 and a Price/Sales of 1.7. HOTCHKIS & WILEY, First Eagle Investment (Trades, Portfolio), John Hussman (Trades, Portfolio), David Dreman (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) have shares of PPL in their portfolios.

Ketterer acquired a 638,037-share stake in American Express, a Manhattan-based financial services corporation, for an average price of $79.32 per share. The purchase had a 1.45% impact on Ketterer’s portfolio.

Ketterer bought stakes in four other companies in the second quarter – UBS Group AG (UBS, Financial), Credicorp Ltd. (BAP, Financial), Ambev SA (ABEV) and Vedanta Ltd. (VEDL, Financial).

Ketterer added to 58 existing stakes in the second quarter. Most of the additions were modest, but a few stand out – WisdomTree India Earnings Fund (ETF) [EPI], Johnson & Johnson (JNJ, Financial), SM Energy Co. (SM, Financial) and Delta Air Lines Inc. (DAL, Financial).

Wisdom Tree Earnings Fund is made of companies incorporated and traded in India that are profitable and eligible for purchase. Ketterer added 2,631,800 shares to her stake, paying an average price of $21.99 per share. The deal had a 1.43% impact on Ketterer’s portfolio.

Ketterer is Wisdom Tree Earnings Fund’s leading shareholder among the gurus. Jeremy Grantham (Trades, Portfolio) and John Keeley (Trades, Portfolio) also have shares in Wisdom Tree Earnings Fund in their portfolios.

Ketterer acquired 352,882 shares in Johnson & Johnson, a New Jersey-based medical devices and pharmaceutical company, for an average price of $100.15 per share. The purchase had a 1.01% impact on Ketterer’s portfolio.

Ketterer purchased 672,114 shares of SM Energy, a Denver-based oil and gas exploration and production company, for an average price of $52.75 per share. The transaction had a 0.91% impact on Ketterer’s portfolio.

SM Energy has a market cap of $2.36 billion and an enterprise value of $4.86 billion. It has a P/E of 5.5, a Price/Book of 1.1 and a Price/Sales of 1.1. Ketterer is SM Energy’s leading shareholder among the gurus; Columbia Wanger (Trades, Portfolio), First Pacific Advisors (Trades, Portfolio), Paul Singer (Trades, Portfolio), Steven Cohen (Trades, Portfolio), Kyle Bass (Trades, Portfolio), Jim Simons (Trades, Portfolio), FPA Capital Fund (Trades, Portfolio), Arnold Schneider (Trades, Portfolio), Ron Baron (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) also have shares of SM Energy in their portfolios.

Ketterer bought 674,108 shares of Delta Air Lines, an Atlanta-based air carrier, for an average price of $43.73 per share. The deal had a 0.81% impact on Ketterer’s portfolio.

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