Charles Brandes (Trades, Portfolio)’ Brandes Investment Partners made two substantial sales on Dec. 29, reducing its stakes in Telecom Italia SpA (TI, Financial) and Invacare Corp. (IVC, Financial).
The value firm, which is headquartered in San Diego and has $31.2 billion in managed assets, warned in a letter in December that most markets were “likely at a frothy point of the cycle” based on traditional valuations.
“While we are surprised that the current cycle of value-stock underperformance has lasted so long, we are mindful that cycles can both last longer and turn quicker than most people expect—quite possibly when they least expect it,” the firm wrote. “Those of us who recall the peak of the tech bubble in early 2000 may view the market’s subsequent decline at that time as a reminder of how failing to adhere to long-term strategic asset-allocation targets can significantly hurt investors’ financial goals.”
Brandes’ sale of Telecom italia was its second in two quarters. The firm cut 33.1% on Dec. 29, leaving it with 3.52 million shares. In its previous sale, which took place in the third quarter, it reduced the position by 21.4%.
Telecom Italia is a long-term holding for Brandes, which established the position more than five years ago, and the firm has intermittently bought and sold shares of the company over the years. After the Dec. 29 sale, it represented 1% of the portfolio.
Telecom Italia is a telecommunications company located in Italy and Brazil with a market capitalization of $18 billion.
Brandes has enjoyed a total estimated gain of 30% on its trades with Invacare Corp. and came close to closing the position on Dec. 29, when it sold 82.3% of the holding to keep only 225,773 shares. The sale followed a third-quarter reduction of 16.7% and second quarter reduction of 24.1%. Brandes began the position in the fourth quarter of 2014 and had been mostly a buyer in the years leading up to the recent sales. The holding represents about 0.41% of Brandes’ stock portfolio.
Invacare makes wheelchairs, adjustable beds, patient transfer devices and other mobility-enhancing products. Its market cap is $572.99 million.
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