Jeremy Grantham

Jeremy Grantham

Last Update: 2014-08-13

Number of Stocks: 488
Number of New Stocks: 46

Total Value: $36,825 Mil
Q/Q Turnover: 10%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Jeremy Grantham' s Profile & Performance

Profile

Jeremy Grantham is the Chairman of the Board of Grantham Mayo Van Otterloo, a Boston based asset management firm. He is regarded as a highly knowledgeable investor in various stock, bond, and commodity markets. Grantham started one of the world's first index funds in the early 1970s. As of early 2009, GMO reported on its web site that it managed more than US $85 billion.

Grantham, Mayo, Van Otterloo & Co. LLC
40 ROWES WHARF
BOSTON MA 02110
617-330-7500

Web Page:http://www.gmo.com

Investing Philosophy

Grantham has built much of his investing reputation over his long career by correctly identifying speculative market "bubbles" as they were happening and steering clients' assets clear of impending crashes. Grantham avoided investing in Japanese equities and real estate in the late eighties, as well as technology stocks during the internet bubble in the late nineties.

Most recently, Grantham began warning about the overvaluation of equity and credit markets in 2006, well before the start of the present crisis.

Total Holding History

Performance of GMO US Intrin.Val. III (GMVUX)

YearReturn (%)S&P500 (%)Excess Gain (%)
201214.415.4-1.0
201110.382.088.3
201011.5915.06-3.5
3-Year Cumulative40.9 (12.1%/year)35.5 (10.7%/year)5.4 (1.4%/year)
200920.526.46-6.0
2008-33.8-373.2
5-Year Cumulative12.4 (2.4%/year)8 (1.5%/year)4.4 (0.9%/year)
2007-3.875.61-9.5
200613.515.79-2.3
20055.984.911.1
200412.76120.8
200329.6828.71.0
10-Year Cumulative90.1 (6.6%/year)99.7 (7.2%/year)-9.6 (-0.6%/year)
2002-15.75-22.16.4
20013.31-11.915.2
200010.67-9.119.8
0000.0

Top Ranked Articles

Ira sohn Investment Conference Notes
Greetings. Yesterday (May 26, 2010) was the 2010 Ira Sohn Investment Conference. The conference is run by Doug Hirsch and Dan Nir and it remembers Ira Sohn, who died of cancer after a brief Wall Street career. The proceeds go to help pediatric cancer treatment centers including, The Tomorrows Children Fund at Hackensack Medical Center and NY Presbyterian Hospital/Weill Cornell Medical Center. You can get more information at http://www.irasohnconference.com/ Read more...
Buffett Indicator and Shiller P/E Both Imply Long Term Negative Market Returns; 2014 Market Valuation
What a great year it was! The market was up 30%, the best year since the go-go years of 1990s.The good news is that our account balance is higher, investors are more bullish. The bad news is that we will see lower future returns. Read more...
Jeremy Grantham Speaks
In an extended interview, Jeremy Grantham, chairman of Grantham Mayo Van Otterloo (GMO), talks to Maria Bartiromo about the markets, the economy, and his investment strategy. Read more...
Stock Market Valuation: October 1, 2011
I started this monthly market valuation series in December 2009. The motivation for the article was that I was getting tired of hearing that the market was overvalued because P/E TTM was 87. This was ridiculous because earnings were deflated by the worst economic crash since the great depression. However, the question was how to value the market from a purely quantitative methodology, while ignoring all the outside noise and macro predictions of where the economy is headed. I looked for several different metrics to evaluate the market which over time have proven to be effective and decided to look at all the metrics, instead of just focusing on the last 12 months of earnings. Read more...
Market Valuations and Expected Returns – Feb. 5, 2014
The U.S. stock market had an excellent 2013. The performance of all three major U.S. stock indexes was the best since the financial crisis in 2008. The S&P 500 and the Dow Jones Industrial Average continually hit historical highs. Yet the real reason for the bull market is nothing less than QE. Though some investors think the fundamentals of the U.S. economy continued to improve, for most Wall Street analysts, the Fed’s $85 billion monthly debt purchase plan is the real driving force behind the bull market. Read more...
» More Jeremy Grantham Articles

Commentaries and Stories

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Why Should You Sell Freeport-McMoRan? Jeremy Grantham,Leon Cooperman - Why Should You Sell Freeport-McMoRan?
In this article, let´s consider Freeport-McMoRan Inc. (FCX), a $37.81 billion market cap, which has a trailing P/E ratio that indicates that the stock is relatively undervalued. More...

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T-Mobile Has a Remarkable Wireless Spectrum
In this article, let's take a look at T-Mobile US, Inc. (TMUS), a $23.59 billion market cap company, which offers digital wireless services in the U.S. under the T-Mobile and MetroPCS brands. More...

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British American Tobacco's ROE Is Really Attractive
In this article, let´s see one of the most important financial ratios applying to stockholders, the best measure of performance for a firm's management, the Return on Equity (ROE), and we are going to analyze it in the case of British American Tobacco plc (BTI). More...

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Why Ralph Lauren Should Be In Your Portfolio?
In this article, let's take a look at Ralph Lauren Corporation (RL), a $13.87 billion market cap company, which designs, markets and distributes men's and women's apparel, accessories, fine watches and jewelry as well as other premium lifestyle products. More...

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Peter Lynch Versus Dividend Discount Model: Why Lexmark Is a Sell?
Lexmark International Inc. (LXK), a $2.98 billion market cap company, has a P/E ratio that indicates that the stock is relatively undervalued (11.9x versus 31.8x of industry mean). More...

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What´s ConocoPhillips' Future?
In this article, let's take a look at ConocoPhillips (COP), which is the largest independent oil and gas exploration and production (E&P) companies in the world. In the U.S. is the largest independent exploration and production firm, doubling its closest competitor in terms of production volumes. Let's explore some reasons more closely to see if they are valid enough to invest in this stock. More...

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George Soros Reveals His Largest Stake
Hedge funds filled their form 13-F, which is a quarterly report of equity holdings by filed institutional investment managers with at least $100 million in equity assets under management, as required by the United States Securities and Exchange Commission (SEC). In this article, let´s concentrate in one particular hedge fund and try to see the principal holdings in its portfolio. I will look into Soros Fund Management LLC.The fund reported its equity portfolio, as at the end of March. The total value of the portfolio amounted to $9.3 billion, up from $8.8 billion disclosed at the end of the previous quarter. Consequently, the fund's total return was 6.4% in the last quarter. The filing revealed that at the end of June, the fund added 150 new positions to its equity portfolio and sold out 65 positions. The top ten portfolio holdings as of the end of the quarter represented 25.62%. The largest changes from previous 13-F´s fillings are in the health care and financial sectors.In this article, let´s see Teva Pharmaceutical Industries Limited (TEVA) in which the fund holds the largest stake in terms of market value. The fund disclosed a $544.8 million stake with over 10.31 million shares.Drivers of ProfitabilityA $2 billion cost-saving plan as well as the company’s remaining $4 billion branded drug portfolio will continue to support the firm's profitability.Further, Teva focuses on innovation; it has numerous innovative drug products in development. Although we know it is very difficult to develop another key product such as Copaxone, maybe these new innovative drugs can lower the huge dependence on it. Copaxone has become the world's leading MS treatment and contributes nearly to half the operating profit.Growth OpportunitiesThe company is the largest pharmaceutical manufacturer with vertically integrated operations. In emerging markets, it has the scale and resources to help minimize the threat of low-cost producers. It has access and complex manufacturing capabilities, including respiratory and biosimilar drugs, that should help maintain the long-term growth opportunities on those markets. Talking about growing opportunities, the joint venture with Procter & Gamble (PG) in branded over-the-counter drugs also creates a space for growth.Acquisition of LabrysA few days ago, Teva announced the acquisition of Labrys which brings to Teva LBR-101, a fully humanized monoclonal antibody that binds to calcitonin gene-related peptide, which is currently in Phase IIb clinical trials for prevention of chronic and episodic migraine.Cash to InvestorsA company characteristic is that demonstrate its commitment to return cash to investor in the form of dividends. The Board of Directors, at its meeting on April 29, 2014, declared a cash dividend for the first quarter of 2014 of NIS 1.21 per share (approximately 30 cents according to the actual rate of exchange). The current dividend yield is 2.1%, which is considered good to protect the purchasing power.Return on EquityNow, let´s compare the best measure of performance for a firm's management: the return on equity. The ROE is useful for comparing the profitability of a company to that of other firms in the same industry. Ticker Company ROE (%) TEVA Teva Pharmaceutical 5.62 ACT Actavis PLC -7.87 SNYNF Sanofi 6.53 AGN Allergan Inc. 15.24   Industry Mean 7 The company has a current ratio of 5.62% which is higher than the one exhibit by Actavis PLC (ACT), but below the Sanofi´s ROE and industry mean. In general, analysts consider ROE ratios in the 15-20% range as representing attractive levels for investment, so the ROE of Allergan Inc. (AGN) looks very attractive. It is very important to understand this metric before investing and it is important to look at the trend in ROE over time.Relative ValuationIn terms of valuation, the stock sells at a trailing P/E of 33.7x, trading at a discount compared to an average of 40.5x for the industry. To use another metric, its price-to-book ratio of 2x indicates a discount versus the industry average of 3.2x while the price-to-sales ratio of 2.3x is below the industry average of 3.57x. These metrics indicate that the stock is relatively undervalued and seems to be an attractive investment relative to its peers.As we can see in the next chart, the stock price has an interesting upward trend in the five-year period. The share price is more than 30 percent higher year to date, though it is up only marginally from a month ago.Final CommentAs outlined in this article, Teva should benefit from the $2 billion cost-savings plan, its plan to expansion into key emerging markets and the development of innovative products as well as strategic acquisitions.For these reasons, I would advise fundamental investors should consider adding this stock to their long-term portfolios.Other hedge fund gurus have also been active in the company. Paul Tudor Jones (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), John Keeley (Trades, Portfolio) and Ken Heebner (Trades, Portfolio) have bought the stock in the first quarter of 2014.Disclosure: Omar Venerio holds no position in any stocks or funds mentioned. More...

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Jeremy Grantham's GMO Q2 Letter - 'Summer Essays'
1 Bubbles Again: Setting Up for a Deal Frenzy Despite a shocking 2.9% setback in first quarter GDP (quarterly decline at annualized rate), the extent of which was forecast by no one, and despite a substantial decline in NIPA corporate earnings, the market has climbed slowly but steadily in recent months. Market volatility has declined to very low levels despite these setbacks and despite Middle Eastern problems. (The negative January Rule this year has, for that matter, also been ineffective so far.) So, all is apparently well, as we have arrived within three months of the dreaded (by bears) Presidential third year. Accordingly, my recent forecast of a fully-fledged bubble, our definition of which requires at least 2250 on the S&P, remains in effect. More...

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No Semiconductor Company Has Been Able to Beat Linear Technology's Profitability
According to the Semiconductor Industry Association (SIA), worldwide sales of semiconductors reached $26.34 billion for the month of April 2014, an increase of 11.5% from the April 2013 with sales of $23.62 billion. The good news is that it is expected that this trend continue during the 2014 and 2015. More...

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Market Valuations and Expected Returns - July 2, 2014 John Hussman,Jeremy Grantham - Market Valuations And Expected Returns - July 2, 2014
In January 2014, the stock market benchmark S&P 500 lost 3.36% after the excellent 2013. The enthusiasm went back as the market gained 4.31% over February. In March, it went up only 0.69%. In April, it was about even for the whole month. In May, the market gained 2.10% and in June, the market benchmark S&P 500 went up 1.91%. The market continuously hit the record high. The close price of S&P 500 was 1973.32 on July 1, 2014. More...

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Pall Corporation Offers Long-Term Growth Potential
In this article let's take a look at Pall Corporation (PLL), the global leader in filtration, separation and purification technologies. So let´s take a look at this Zacks Rank #2 (Buy) and try to analyze long-term drivers. More...

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Top Hedge Fund Gurus Hold IBM, Should You Too?
In this article, let´s concentrate in International Business Machines Corp. (IBM), a major player in the hardware, software and services markets and has been Oracle (ORCL) ´s database rival. This giant has evolved from being a computer hardware vendor to a system, services and software company that focuses on integrated solutions. More...

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Beware of Sideways Markets (Are We There Yet?) Charlie Munger,Jeremy Grantham - Beware Of Sideways Markets (Are We There Yet?)
In early May I had the pleasure of attending and speaking at the Value Investing Congress in Las Vegas. The last time I had spoken there, it was May 2008 and the market was just coming off its top.  The Standard & Poor’s 500 index was trading at 18 times trailing earnings. Profit margins were at a modern-day high. They subsequently collapsed but came back to set an even higher high. If you normalize profits for high margins and look at ten-year trailing earnings, in 2008 stocks were trading 66 percent above their average. They were at 30 times ten-year trailing earnings. More...

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GMO May 2014 Seven Year Asset Forecast
<p style=" margin: 12px auto 6px auto; font-family: Helvetica,Arial,Sans-serif; font-style: normal; font-variant: normal; font-weight: normal; font-size: 14px; line-height: normal; font-size-adjust: none; font-stretch: normal; -x-system-font: none; display: block;"> GMO 7 Yr Asset Class Forecast May 14 More...

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Market Valuations and Expected Returns - June 5, 2014 John Hussman,Jeremy Grantham - Market Valuations And Expected Returns - June 5, 2014
In January 2014, the stock market benchmark S&P 500 lost 3.36% after the excellent 2013. The enthusiasm went back as the market gained 4.31% over February. In March, it went up only 0.69%. In April, it was about even for the whole month. And in May, the market gained 2.10%. More...

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Top 10 Guru-Held Stocks of the First Quarter PRIMECAP Management,Jeremy Grantham - Top 10 Guru-Held Stocks Of The First Quarter
Using the GuruFocus Aggregated Portfolio Screener you can filter results to see what companies maintain the highest amount of guru ownership. By using this screener, we filtered down to see which companies were held by the highest number of gurus. The following ten companies come from a variety of industries, are based actually all based out of the United States and are held by the largest number of gurus as of the close of the first quarter More...

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Top 5 New Buys of GMO's Jeremy Grantham Jeremy Grantham - Top 5 New Buys Of GMO's Jeremy Grantham
Jeremy Grantham (Trades, Portfolio) is one of the founders of GMO, a firm that invests according to a conservative, value-oriented philosophy. As of Sept. 30, 2013, GMO oversees $112 billion in client assets. Its U.S. Equity fund returned 10.80% since inception in 1989, against its blended benchmark’s 10.24%. More...

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April 2014 GMO 7-Year Asset Class Forecast - What to Buy, What to Avoid
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These Leading Indicators Support Jeremy Grantham’s Market Call Jeremy Grantham,John Hussman - These Leading Indicators Support Jeremy Grantham’s Market Call
With the bull market being in its fifth year, the overall stock market is becoming expensive according to historic market valuations. The markets tend to follow cycles, and a bull market cannot go on forever without any setbacks. Jeremy Grantham (Trades, Portfolio) of GMO LLC, with an educated guess, thinks that the market will likely be positive over the next couple of years and have a large correction. Grantham states that it could drop by half using standard deviations and mean reversion. According to his latest newsletter, here are Grantham’s best guesses as to what will happen over the next two years: More...

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Jeremy Grantham First Quarter 2014 Letter

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