Jeremy Grantham (Trades, Portfolio) is generally regarded as wise in the ways of the markets. Co-founder and chief investment strategist of Grantham Mayo van Otterloo (GMO), a Boston-based asset management firm, Grantham has guided GMO to a lofty perch, where it had $112 billion in assets under management as of the third quarter of 2013.
Grantham made 29 new buys in the first quarter. By volume, his largest purchase was in Office Depot Inc (ODP, Financial), a Boca Raton, Florida-based office supply company. Grantham acquired 6,240,485 shares of Office Depot for an average price of $8.91 per share. The purchase had a 0.17% impact on Grantham’s portfolio, and it made Office Depot his 20th-largest stake.
Office Depot has a market cap of $5.07 billion and an enterprise value of $5.69 billion. It has a Price/Book of 1.3 and a Price/Sales of 0.3. Joel Greenblatt (Trades, Portfolio), John Burbank (Trades, Portfolio), Mario Gabelli (Trades, Portfolio) and George Soros (Trades, Portfolio) have shares of Office Depot in their portfolios.
The new buy that had the greatest impact on Grantham’s portfolio was his acquisition of 1,561,118 shares of City National Corp (CYN, Financial) for an average price of $86.45 per share. The purchase of a stake in City National, a Los Angeles-based financial institution, had a 0.42% impact on Grantham’s portfolio.
City National has a market cap of $5.18 billion and an enterprise value of $5.32 billion. It has a P/E of 21.3, a Price/Book of 1.9 and a Price/Sales of 4.0. James Barrow (Trades, Portfolio) and Mario Gabelli (Trades, Portfolio) have shares of City National in their portfolios.
Grantham’s other new buys in the first quarter included stakes in Orbitz Worldwide Inc (OWW, Financial), Polypore International Inc (PPO, Financial), Mueller Water Products, Inc. (MWA, Financial) and Hospira Inc (HSP, Financial).
Grantham added to existing stakes in 165 companies in the first quarter. He bought 13,037,568 shares of Alibaba Group Holding Ltd (BABA, Financial), the Chinese ecommerce company that had its high-profile IPO in September 2014, for an average price of $90.25 per share. The purchase, which had a 3.24% impact on Grantham’s portfolio, made Alibaba the 10th-largest stake in that portfolio.
Alibaba has a market cap of $217.06 billion and an enterprise value of $208.7 billion. It has a P/E of 49.4, a Price/Book of 9.2 and a Price/Sales of 18.5. Ron Baron (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio), Julian Robertson (Trades, Portfolio), George Soros (Trades, Portfolio), Frank Sands (Trades, Portfolio), John Griffin (Trades, Portfolio) and John Burbank (Trades, Portfolio) have shares of Alibaba in their portfolios. Lee Ainslie (Trades, Portfolio) and John Paulson (Trades, Portfolio) sold their stakes in Alibaba in the first quarter.
Grantham bought 7,398,630 shares of Medtronic PLC (MDT, Financial), a Dublin, Ireland-based medical device company, for an average price of $78.52 per share. The transaction had a 1.72% impact on Grantham’s portfolio.
Medtronic has a $111.9 billion market cap and a $109.58 billion enterprise value. It has a P/E of 25.2, a Price/Book of 5.5 and a Price/Sales of 4.5. James Barrow (Trades, Portfolio), Vanguard Health Care Fund (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio), Dodge & Cox, Ronald Muhlenkamp (Trades, Portfolio), Mario Gabelli (Trades, Portfolio), Ray Dalio (Trades, Portfolio), John Hussman (Trades, Portfolio), First Eagle Investment, John Keeley (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio) and Ruane Cunniff (Trades, Portfolio) have shares of Medtronic in their portfolios.
Other existing stakes to which Grantham added were Procter & Gamble Co (PG, Financial), Johnson & Johnson (JNJ, Financial), American Express Co (AXP, Financial), Coca-Cola Co (KO, Financial) and Google Inc (GOOGL).
Divestitures and reductions
Grantham sold his stakes in 12 companies in the fourth quarter.
The transaction that had the greatest impact on his portfolio was his sale of his stake in Allergan Inc (AGN), an Irvine, California-based pharmaceutical company. Grantham sold 1,464,872 shares for an average price of $225.95 per share. The sale had a -0.84% impact on his portfolio.
Allergan has a market cap of $72.12 billion and an enterprise value of $69.32 billion. It has a P/E of 47.9, a Price/Book of 9.2 and a Price/Sales of 10.1. George Soros (Trades, Portfolio), John Paulson (Trades, Portfolio) and Joel Greenblatt (Trades, Portfolio) have shares of Allergan in their portfolios. Mario Gabelli (Trades, Portfolio), Dodge & Cox and First Eagle Investment (Trades, Portfolio) sold their stakes in Allergan in the first quarter.
Grantham reduced his holdings in 215 companies in the first quarter.
He sold 8,334,015 shares, more than one-third of his stake, in Philip Morris International Inc (PM), a New York-based cigarette and tobacco company, for an average price of $81.17 per share. The deal had a -1.81% impact on his portfolio.
Philip Morris has a market cap of $132.42 billion and an enterprise value of $162.85 billion. It has a P/E of 17.9 and a Price/Sales of 4.5.
Philip Morris is the ninth-largest stake in Grantham’s portfolio. James Barrow (Trades, Portfolio), Tweedy Browne (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Charles Brandes (Trades, Portfolio), Tom Gayner (Trades, Portfolio), Ruane Cunniff (Trades, Portfolio), Ray Dalio (Trades, Portfolio), David Dreman (Trades, Portfolio), Donald Yacktman (Trades, Portfolio), First Eagle Investment (Trades, Portfolio) and Dodge & Cox have shares of Philip Morris in their portfolios.
Grantham also sold 12,057,037 shares of Microsoft Corp (MSFT), a Redmond, Washington-based technology company, for an average price of $43.53 per share. That transaction had a -1.52% impact on his portfolio.
Microsoft has a market cap of $383.37 billion and an enterprise value of $319.75 billion. It has a P/E of 19.5, a Price/Book of 4.3 and a Price/Sales of 4.2. Dodge & Cox, Jeff Ubben (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio), James Barrow (Trades, Portfolio), First Eagle Investment, Donald Yacktman (Trades, Portfolio), David Abrams (Trades, Portfolio), Charles Brandes (Trades, Portfolio), Glenn Greenberg (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Steve Mandel (Trades, Portfolio), Yacktman Focused Fund (Trades, Portfolio), Ronald Muhlenkamp (Trades, Portfolio), Tom Gayner (Trades, Portfolio), Mario Gabelli (Trades, Portfolio), Ray Dalio (Trades, Portfolio), Ruane Cunniff (Trades, Portfolio), Wallace Weitz (Trades, Portfolio), Lee Ainslie (Trades, Portfolio), John Keeley (Trades, Portfolio), John Hussman (Trades, Portfolio), Meridian Funds (Trades, Portfolio) and David Dreman (Trades, Portfolio) have shares of Microsoft in their portfolios. Frank Sands (Trades, Portfolio) sold his stake in Microsoft in the first quarter.
Microsoft is the fifth-largest stake in Grantham’s portfolio.
Among the other companies in which Grantham reduced his stakes were Oracle Corporation (ORCL), Grantham’s second-largest stake; Apple Inc (AAPL); International Business Machines Corp (IBM), and Amazon.com Inc (AMZN).
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