Cobas Asset Management recently released its portfolio updates for the second quarter of 2020, which ended on July 30.
Under the management of Chairman and Chief Investment Officer Francisco Garcia Parames (Trades, Portfolio), the asset management company seeks to follow Warren Buffett (Trades, Portfolio)’s value investing strategies, focusing on undervalued assets that show high potential for long-term growth. The firm invests mostly in European companies, but it holds some positions in the United States and Asia as well.
Based on its investing criteria, the firm’s top buys for the second quarter were in G-III Apparel Group Ltd. (GIII, Financial), Affiliated Managers Group Inc. (AMG, Financial), Golar LNG Partners LP (GMLP, Financial), Golar LNG Ltd. (GLNG, Financial) and Mylan NV (MYL, Financial).
G-III Apparel Group
The firm added 412,894 shares to its investment in G-III Apparel Group, increasing the holding by 1789.59% for a total of 435,966 shares. The trade had a 1.05% impact on the equity portfolio. During the quarter, shares traded for an average price of $10.96.
G-III Apparel is a New York-based American clothing company that holds a portfolio of world-renowned brands, including Calvin Klein, DKNY, Guess, Tommy Hilfiger and Andrew Marc, among others.
On Aug. 4, shares of G-III Apparel traded around $9.74 for a market cap of $468.03 million and a price-earnings ratio of 5.08.
GuruFocus gives the company a financial strength rating of 5 out of 10 and a profitability rating of 7 out of 10. The cash-debt ratio of 0.52 is slightly above the industry median of 0.45, while the Altman Z-Score indicates the company is not likely to go bankrupt. Revenue and Ebitda have grown steadily in recent years, with a three-year revenue growth rate of 8.7% and a three-year Ebitda growth rate of 26.9%.
Affiliated Managers Group
Cobas purchased an additional 61,180 shares of Affiliated Managers Group, increasing the position by 110.33% to 116,634 shares and impacting the equity portfolio by 0.87%. Shares traded for an average price of $67.40 during the quarter.
Based in West Palm Beach, Florida, Affiliated Managers Group is an asset management company that owns stakes in a diverse selection of asset management, hedge fund and specialized private equity firms.
On Aug. 4, shares of Affiliated Managers Group traded around $68.11 for a market cap of $3.17 billion and a price-earnings ratio of 27.35.
GuruFocus gives the company a financial strength rating of 5 out of 10 and a profitability rating of 7 out of 10. The cash-debt ratio of 0.36 and Altman Z-Score indicate the company could potentially face liquidity issues in the next two years. The return on invested capital is in line with the weighted average cost of capital, indicating the company is generating roughly as much funds as it invests.
Golar LNG Partners
The firm established a new stake of 1,555,122 shares in Golar LNG Partners, impacting the equity portfolio by 0.77%. During the quarter, shares traded for an average price of $2.53.
Golar LNG Partners is a liquified natural gas shipping company based in Bermuda. It owns and operates both LNG carriers and floating storage regasification units and is structured as a master limited partnership, thus offering a more stable yield to investors.
On Aug. 4, shares of Golar LNG Partners traded around $2.61 for a market cap of $180.89 million. The company posted a net loss for the most recent quarter.
GuruFocus gives the company a financial strength rating of 3 out of 10 and a profitability rating of 7 out of 10. The interest coverage ratio of 1.78 and Altman Z-Score of 0.29 indicate that the company is at a considerable risk of bankruptcy if it cannot secure additional liquidity. Both revenue and net income have been declining in recent years.
Golar LNG
The firm boosted its largest holding, Golar LNG Ltd., by 10.46% (or 479,608 shares) for a total of 5,064,457 shares. The trade had a 0.66% impact on the equity portfolio. Shares traded for an average price of $6.93 during the quarter.
Like Golar LNG Partners, Golar LNG Ltd. also owns and operates LNG storage and carrier infrastructure in Bermuda and nearby areas, particularly Brazil. It is structed as a limited company.
On Aug. 4, shares of Golar LNG traded around $7.90 for a market cap of $771.71 million. The company posted a net loss for the most recent quarter.
GuruFocus gives the company a financial strength rating of 3 out of 10 and a profitability rating of 5 out of 10. The interest coverage ratio of 1.5 and current ratio of 0.18 indicate that the company is at high risk of bankruptcy. Revenue has been improving, though the company has yet to post consistent positive net earnings.
Mylan
The firm increased its investment in Mylan NV by 221,923 shares, or 132.8%, for a total of 389,029 shares. The trade impacted the equity portfolio by 0.68%. During the quarter, shares traded for an average price of $16.18.
Mylan is a generic and specialty pharmaceutical company based in the Netherlands, with headquarters in the U.K. and the U.S. and operations in 165 countries. The company’s goal is to provide universal access to medicine through its profile of generic, branded generic, brand-name and biosimilar drugs.
On Aug. 4, shares of Mylan traded around $16.32 for a market cap of $8.44 billion and a price-earnings ratio of 136.08.
GuruFocus gives the company a financial strength rating of 4 out of 10 and a profitability rating of 8 out of 10. The Altman Z-Score of 1.08 and interest coverage of 1.69% indicate potential liquidity issues. The operating margin and net margin have been in decline as the company has expanded, though, at 7.36%, the operating margin is still above the industry median of 5.78%.
Portfolio overview
As of the quarter’s end, the equity portfolio consisted of 61 common stock positions valued at a total of $446 million. The top holdings were Golar LNG Ltd. with 6.99% of the equity portfolio, CIR SpA (LTS:0ONR) with 6.86% and Teekay LNG Partners LP (TGP) with 5.18%.
In terms of sector weighting, the firm was most invested in energy, industrials and consumer cyclical.
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