Automaker Toyota (NYSE:TM) was sold in the second quarter of 2015.We initially purchased Toyota in 2010 as the company suffered from news of unintended acceleration in some of its vehicles and the resulting recall, causing its stock to trade at a significant discount compared to its history and its peers. Toyota also faced major challenges from low automobile demand in its major markets and a strong yen, which made cars exported from Japan less competitive.
Over the past several years, Toyota has managed to address the recall issue, which led to improved investor sentiment. Additionally, the weakening yen, combined with a strong recovery in automobile demand in many markets, especially in the United States, drove up Toyota’s share price significantly over the last year. We decided to divest our position after Toyota’s shares appreciated to our estimate of the company’s long-term intrinsic value.
From the Brandes Global Equity Fund letter for the year ended. Sept. 30, 2015.
