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James Li
James Li
Articles (538)  | Author's Website |

Hotchkis & Wiley Starts Positions in Pepsi and Mondelez in 4th Quarter

Firm discloses top buys in latest portfolio report

February 13, 2018 | About:

Hotchkis & Wiley disclosed on Tuesday its top two buys for fourth-quarter 2017 are PepsiCo Inc. (NASDAQ:PEP) and Mondelez International Inc. (NASDAQ:MDLZ).

The firm invested in 2,184,100 shares of PepsiCo for an average price of $114.16 per share and 3,563,500 shares of Mondelez for an average price of $41.97 per share.

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PepsiCo

PepsiCo’s profitability ranks 6 out of 10: while the company’s operating margin outperforms 82% of global competitors, its three-year revenue growth rate of 0.50% ranks lower than 66% of global beverage companies.

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PepsiCo CEO Indra Nooyi said that despite dynamic retail environment changes, the company still delivered solid results in 2017, including core constant currency earnings growth of 9% for the year. The CEO announced a 15% annualized dividend increase for June, reflecting management confidence in the growth prospects of PepsiCo’s business. This increase represents the company’s 46th consecutive annual dividend increase.

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Mondelez

Mondelez, known for products like Oreos and Chips Ahoy, said fourth-quarter net revenues increased 2.9% year over year, driven primarily by a 2.4% increase in organic revenues. While full-year net revenues slightly declined from the prior year, Mondelez’s operating margin reached 13.54%, up 3.60% from the prior year and ranking higher than 79% of global competitors.

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Ken Fisher (Trades, Portfolio) purchased 1,473 Mondelez shares during the quarter, boosting the position 15.13%.

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Firm’s other top buys

Alleghany Corp. (NYSE:Y), Casa Systems Inc. (NASDAQ:CASA) and Luther Burbank Corp. (NASDAQ:LBC) represent Hotchkis & Wiley’s next three top buys. The firm invested in 28,310 shares of Alleghany for an average price of $570.26 per share, 600,000 shares of Casa Systems for an average price of $15.46 per share and 700,000 shares of Luther Burbank for an average price of $12.04 per share.

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You can view the firm’s latest trades here. Premium members can access a wide variety of “guru stock ideas” features, including real-time picks, sector picks, the aggregated portfolio and the new user-defined GURUG function. Additionally, you can also generate a personalized list of gurus using the “List of Gurus (Personalize)” feature.

Disclosure: I do not have positions in the stocks mentioned.

About the author:

James Li
I am an editorial assistant and researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

Visit James Li's Website


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