Francisco Garcia Paramés, chief investment officer of Cobas Asset Management, disclosed on Friday that he added eight new positions to his portfolio during the first quarter. The top 4 buys based on portfolio impact are Ensco PLC (ESV, Financial), OCI NV (XAMS:OCI, Financial), Shire PLC (SHPG, Financial)(LSE:SHP, Financial) and KT Corp. (KT, Financial).
Ensco
Garcia Paramés invested in 4,476,292 shares of Ensco for an average price of $5.54. With this transaction, the guru increased his portfolio 1.72%.
London-based Ensco provides offshore contract drilling services to oil companies in several global countries. Although the company reported “strong operational and safety performance” during the quarter, according to CEO Carl Trowell, Ensco’s profitability ranks a poor 4 out of 10 primarily due to contracting operating and gross margins. Other severe warning signs include a weak Piotroski F-score of 3, declining revenues and a Beneish M-score that suggests possible earnings manipulation.
Even though Ensco offers low growth potential, gurus like David Einhorn (Trades, Portfolio) and Prem Watsa (Trades, Portfolio) have invested in the company over the past six months.
OCI
Garcia Paramés invested in 793,977 shares of OCI for an average price of 19.95 euros. With this transaction, the guru increased his portfolio 1.58%.
OCI, a Dutch specialty chemical company, manufactures and sells a variety of fertilizers and natural-gas based chemicals through three business segments: OCI Nitrogen and Trading, North Africa and OCI Partners. GuruFocus lists four severe warning signs for OCI, including poor interest coverage, declining revenues and low operating and gross margins. OCI’s financial strength ranks a poor 3 out of 10, suggesting possible financial distress.
Shire
Garcia Paramés invested in 298,750 shares of Shire for an average price of 33.03 pounds. With this transaction, the guru increased his portfolio 1.29%.
Ireland-based Shire engages in the research and development of specialist medicines for patients with rare diseases and other select conditions. CEO Flemming Ornskov, M.D., M.P.H., said that Shire generated product sales growth of 7% during the quarter “with important contributions from [the company’s] Immunology franchise, recently-launched products and international markets.” GuruFocus ranks Shire’s profitability 9 out of 10 primarily due to a strong Piotroski F-score of 7 and good profit margins relative to competitors. Shire’s operating margin outperforms 85% of global biotech companies despite languishing near a 10-year low of -82.87%.
KT
Garcia Paramés invested in 835,201 shares of KT for an average price of $14.27. With this transaction, the guru increased his portfolio 1%.
South Korea-based KT provides various fixed-line telecom services including local, long-distance and international calling. The company’s profitability ranks a poor 4 out of 10 as margins and returns underperform over 54% of global competitors.
See also
Garcia Paramés, a self-taught follower of Warren Buffett (Trades, Portfolio)’s investing approach, strictly applies value investing principles from Ben Graham and Peter Lynch. Premium members have access to a wide variety of value screeners, ranging from the Ben Graham Net-Net Screener to the Buffett-Munger Screener. You can view the list of undervalued predictable companies for a particular region if you subscribe to that region.
Disclosure: No positions.
