Charles Brandes Buys Stakes in Emerson Electric, Johnson & Johnson

Guru adds more than 3 million shares to stake in Leucadia National

Nov 09, 2015

Charles Brandes (Trades, Portfolio), chairman of Brandes Investment Partners, the firm he founded in 1974, is an adherent of value investing, applying its principles to the portfolios that are managed by the firm as well as his own. The strategy has been successful. Last year, when many investors struggled in a challenging environment, Brandes’ U.S. Value Equity Fund produced positive returns exceeding 13%.

Brandes’ most noteworthy transaction in the third quarter was his purchase of a 2,571,543-share stake in Emerson Electric Co. (EMR, Financial), a Ferguson, Mo.-based electrical equipment company. Brandes paid an average price of $49.17 per share. The deal had a 1.66% impact on Brandes’ portfolio.

Emerson Electric has a market cap of $30.43 billion and an enterprise value of $35.87 billion. It has a P/E of 13.4, a forward P/E of 15.2, a P/B of 3.9 and a P/S of 1.4. GuruFocus has given Emerson Electric a Financial Strength rating of 8/10 and a Profitability and Growth rating of 8/10.

Emerson Electric sold for $48.18 per share late Monday.

Brandes also acquired a 118,509-share in Johnson & Johnson (JNJ, Financial), a New Jersey-based medical equipment and pharmaceutical company, for an average price of $96.79 per share. The deal had a 0.16% impact on Brandes’ portfolio.

Johnson & Johnson has a market cap of $276.39 billion and an enterprise value of $258.78 billion. It has a P/E of 19.3, a forward P/E of 15.9, a P/B of 3.9 and a P/S of 4.0. GuruFocus has given Johnson & Johnson a Financial Strength rating of 8/10 and a Profitability and Growth rating of 7/10.

Johnson & Johnson sold for $100.77 per share late Monday.

Brandes added to more than 70 existing stakes in his portfolio during the third quarter.

His most significant addition was his purchase of 3,464,380 shares of Leucadia National (Trades, Portfolio) Corp. (LUK, Financial), a New York-based holding company, for an average price of $22.43 per share. The transaction had a 1.03% impact on Brandes’ portfolio and increased his stake by nearly 825%.

Leucadia has a market cap of $7.11 billion. It has a P/E of 16.5, a P/B of 0.7 and a P/S of 0.6. GuruFocus has given Leucadia a Financial Strength rating of 6/10 and a Profitability and Growth rating of 6/10.

Leucadia was selling for $18.86 per share late Monday.

Brandes also added to his stake in Western Digital Corp. (WDC, Financial), an Irvine, Calif.-based computer data storage company, buying 751,751 shares for an average price of $79.56 per share. The purchase had a 0.87% impact on Brandes’ portfolio.

Western Digital has a market cap of $15.18 billion and an enterprise value of $12.71 billion. It has a P/E of 10.8, a forward P/E of 10.3, a P/B of 1.7 and a P/S of 1.1. GuruFocus has given Western Digital a Financial Strength rating of 8/10 and a Profitability and Strength rating of 7/10.

Western Digital sold for $66.93 per share late Monday.

Brandes reduced nearly 70 of his existing stakes in the third quarter, the most prominent reduction being the sale of 3,498,263 shares of Masco Corp. (MAS, Financial), a Taylor, Mich.-based maker of home improvement and home construction products, for an average price of $25.66 per share. Brandes sold more than 99% of his stake, a deal that had a -0.93% impact on his portfolio.

Masco has a market cap of $9.67 billion and an enterprise value of $11.86 billion. It has a P/E of 25.1, a forward P/E of 19.3 and a P/S of 1.1. GuruFocus has given Masco a Financial Strength rating of 7/10 and a Profitability and Growth rating of 7/10.

Late Monday Masco sold for $28.37 per share.

Brandes sold more than three dozen stakes in his portfolio, the most significant being the sale of his 659,920-share stake in Unilever NV (UN, Financial), a consumer goods company with offices in London and Rotterdam, Netherlands, for an average price of $42.11 per share. The deal had a -0.35% impact on Brandes’ portfolio.

Unilever has a market cap of $133.92 billion and an enterprise value of $129.6 billion. It has a P/E of 22.3, a forward P/E of 21.0, a P/B of 7.5 and a P/S of 2.4. GuruFocus has given Unilever a Financial Strength rating of 8/10 and a Profitability and Growth rating of 7/10.

Unilever sold for $43.74 per share late Monday.

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