Charles Brandes' Top Growth Stocks

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Apr 07, 2015
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Charles Brandes (Trades, Portfolio) (a Benjamin Graham disciple) is the chairman of Brandes Investment Partners. He started the firm in 1974. He manages multiple portfolios including US equity and Global Equity. Charles Brandes (Trades, Portfolio) is listed as #488 in the Forbes List of World's Richest People with a net worth of $2 billion. He is author of the book Value Investing Today

His Hedge Fund has a total value of $7,090 Mil and is composed of 162 stocks. According to GuruFocus’ Top Growth Stocks of Brandes’ Portfolio, Western Digital Corp (WDC), Express Scripts Holding Co(ESRX), Copa Holdings SA (CPA), People's United Financial Inc (PBCT)are the stocks with Top Growing EBITDA.

Western Digital Corp (WDC)

WDC has a market Cap of $21.53 Billions and is currently trading at P/E (ttm) of 14.40 at very cheap level compared to the Global Data Storage industry median whose P/E ratio is 38.30. The price rose by 4% over the last 12 months.

At current price, based on DCF model, WDC fair value is $183.91, and these days the stock is trading with a margin of safety of 49%.

The Peter Lynch Earnings line Fair Value is set to $132.4 so the stock at current prices is trading with a margin of safety of 30%

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Over the last 5 years, the company's Revenue grew by 14%, EBITDA grew by 19.50% and EPS growth rate is 16.70%. WDC has positive returns (17.55% of ROE, 10.10% of ROA and 50.59% of ROC) and good Financial strength, rated 8/10 (Cash to Debt of 2.17).

Compared to the industry, Returns (ROA,ROE, ROC) are better then 91% of WDC’s competitors.

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First Pacific Advisorsis the main Guru holding 0.55% of Outstanding Shares of WDC.Charles Brandes holds 0.54% and Ken Heebner holds 0.25%.

Express Scripts Holding Co(ESRX)

ESRX has a market Cap of $61.71 Billion and is currently trading at P/E (ttm) of 31.90 at average level compared to the Global Health Care Plans’ Industry Median whose P/E ratio is 31.80. The price rose by 17% over the last 12 months.

At current price, based on DCF model, ESRX fair value is $65.47, and these days the stock is trading with a negative margin of safety of -30%.

The Peter Lynch Earnings line Fair Value is set to $71 so even here the stock looks Overpriced at current levels, with a negative margin of safety of -18%.

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Over the last 5 years, the company's revenue grew by 21.60%, EBITDA grew by 20.70% and EPS growth rate is 7.30%. ESRX has positive returns (9.62% of ROE, 3.74% of ROA and 220.03% of ROC) and good Financial strength, rated 7/10. These Ratios are outperforming the ESRX’s Industry but not ESRX’s history, when ratios where almost 3 times the current value

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Jeremy Grantham is the main Guru holding ESRX with 3.34% of shares outstanding, followed by Dodge & Cox (2.65%) and Chris Davis (1.79%).

Copa Holdings SA (CPA)

CPA has a market Cap of $4.43 Billions and is currently trading at P/E (ttm) of 9.70 at very cheap level compared to the Global Airlines industry median whose P/E ratio is 48.60. The price dropped by -32% over the last 12 months.

At current price, based on DCF model, CPA fair value is $ 238.28, and these days the stock is trading with a margin of safety of 58%.

The Peter Lynch Earnings line Fair Value is set to $190.6 with a current margin of safety of 48%

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Over the last 5 years, the company's revenue grew by 16.80%, EBITDA grew by 20.60% and EPS growth rate is 23.40%. CPA has positive returns (18.22% of ROE, 9.25% of ROA and 22.12% of ROC) and good Financial strength, rated 8/10. All these ratios are better then 90% of CPA’s competitors but the company had better ratios in the past.

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Charles Brandesis the main Guru holding 1.41% of Outstanding Shares, followed byNWQ Managers (0. 91%) and Jeremy Grantham (0.62%)

People's United Financial Inc (PBCT)

PBCT has a market Cap of $4.67 Billions and is currently trading at P/E (ttm) of 17.90 at an average level compared to the Global Savings & Cooperative Banks industry median whose P/E ratio is 19.40. The price rose by 3% over the last 12 months.

At current price, based on DCF model, PBCT fair value is $ 12.54, and these days the stock is trading with a negative margin of safety of -21%.

The Peter Lynch Earnings line Fair Value is set to $12.8 that put the stock as fairly valued.

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Over the last 5 years, the company's revenue grew by 10.30%, EBITDA grew by 22.20% and EPS growth rate is 28.60%. PBCT has positive returns (5.45% of ROE, 0.74% of ROA and 131.59% of ROC). All these ratios are at average levels compared to the Industry Median. Financial strength, rated 5/10 is in bad shape; is at average level compared to the industry and is near minimums of PBCT’s history (Cash to Debt of 0.31 Vs. minimum of 0.11)

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James Barrow is the main Guru holding PBCT with 4.63% of shares outstanding, followed by Pioneer Investments (0.22%) and Jim Simons (0.05%). Charles Brandes holds just 0.03% of Shares Outstanding

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