Charles Brandes (Trades, Portfolio)’ Brandes Investment Partners gained 49 new holdings during the quarter. Among the purchases were several health care stocks. His three largest new health care holdings are AstraZeneca PLC (AZN, Financial), CVS Health Corp. (CVS, Financial) and Gilead Sciences Inc. (GILD, Financial).
As a disciple of Benjamin Graham, Brandes buys companies that are selling at a discount to their intrinsic values. This approach to delivering long-term returns has helped his firm’s performance since its inception in 1974.
Having previously sold out of AstraZeneca in third-quarter 2014, Brandes initiated a new holding of 236,779 shares for an average price of $29.11 per share. The trade had an impact of 0.11% on the portfolio.
The U.K.-based biopharmaceutical company has a market cap of $75.7 billion; its shares were trading around $31.03 on Thursday with a price-earnings (P/E) ratio of 22.24, a price-book (P/B) ratio of 5.6 and a price-sales (P/S) ratio of 3.5.
The Peter Lynch chart below shows the stock is trading above its fair value.
GuruFocus ranked AstraZeneca’s financial strength 4 of 10 and its profitability and growth 5 of 10. The trailing dividend yield is 4.5%, and the forward dividend yield is 6.2%. Over the past five years, the company has grown its dividend at a rate of 1.4% per year.
Dodge & Cox is AstraZeneca’s largest guru shareholder with 1.9% of its outstanding shares. In total, 13 other gurus hold the stock.
Brandes purchased 94,271 shares of CVS for an average price of $79.83 per share, giving it 0.11% portfolio space.
The retail pharmacy chain has a market cap of $85.8 billion; its shares were trading around $81.64 on Thursday with a P/E ratio of 16.9, a P/B ratio of 2.5 and a P/S ratio of 0.5.
According to the Peter Lynch chart below, the stock is trading slightly above its fair value.
GuruFocus ranked CVS’ financial strength 6 of 10 and its profitability and growth 7 of 10. The trailing dividend yield is 2.3%, and the forward dividend yield is 2.5%. Over the past five years, the company has grown its dividend by 27.9% per year.
Among the gurus invested in CVS, Barrow, Hanley, Mewhinney & Strauss is the largest shareholder with 1.7% of its outstanding shares. In total, 34 gurus hold the stock.
The investor bought 108,756 shares of Gilead Sciences for an average price of $70.32 per share, expanding the portfolio 0.11%.
The American biopharmaceutical company has a market cap of $88.7 billion; its shares were trading around $66.22 on Thursday with a P/E ratio of 7, a P/B ratio of 4.13 and a P/S ratio of 2.9.
The stock is trading below its fair value according to the Peter Lynch chart below.
GuruFocus ranked Gilead’s financial strength 6 of 10 and its profitability and growth 8 of 10. The trailing dividend yield is 2.8% and the forward dividend yield is 3.1%.
Jim Simons (Trades, Portfolio) is the company’s largest shareholder with 0.4% of its outstanding shares. In all, 30 gurus own Gilead Sciences stock.
Other health care stocks Brandes invested in during the quarter were Apricus Biosciences Inc. (APRI, Financial), Galectin Therapeutics Inc. (GALT, Financial), Peregrine Pharmaceuticals Inc. (PPHM, Financial), NewLink Genetics Corp. (NLNK, Financial), Oragenics Inc. (OGEN, Financial), PDL BioPharma Inc. (PDLI, Financial) and Savara Inc. (SVRA, Financial).
Health care stocks have a weight of 16.9% in Brandes’ portfolio.
Disclosure: I do not own any stocks mentioned in the article.
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