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James Li
James Li
Articles (587)  | Author's Website |

Mohnish Pabrai Divests 3 Positions in 1st Quarter

The trades leave guru with just two auto manufacturing companies in his portfolio

Mohnish Pabrai (Trades, Portfolio), managing partner of Pabrai Investment Funds, disclosed on Monday that he divested three positions during the first quarter: Alphabet Inc. (NASDAQ:GOOGL)(NASDAQ:GOOG), AerCap Holdings NV (NYSE:AER) and Southwest Airlines Co. (NYSE:LUV). These trades leave Pabrai with just two stock positions: Fiat Chrysler Automobiles NV (NYSE:FCAU) and Ferrari NV (NYSE:RACE).


Pabrai sold 45,828 shares of Alphabet, the parent company of Google, for an average price of $1,103.99 per share. With this transaction, the guru pared 12.43% of his portfolio.


Alphabet said on April 23 that the company had strong momentum during the quarter, highlighted by a 26% year-over-year increase in revenues. The Mountain View, California-based online media company’s three-year revenue growth rate of 17.90% outperforms 64% of global competitors, which include Facebook Inc. (NASDAQ:FB), Tencent Holdings Ltd. (TCEHY)(HKSE:00700) and Baidu Inc. (NASDAQ:BIDU).


Although the company has strong growth potential, Alphabet is trading near a 10-year high of $1111.94, approximately 1.05 times its median price-sales valuation.


Pabrai sold 807,721 shares of AerCap for an average price of $51.86. With this transaction, the guru trimmed 11.01% off his portfolio.


AerCap provides aircraft leasing and aviation finance services to various countries, including China, Hong Kong, Macau, the U.S. and the Netherlands. AerCap’s profitability ranks 9 out of 10 as the company’s operating margin, three-year revenue growth rate and three-year earnings before interest, taxes, depreciation and amortization growth rate outperform over 90% of global competitors. Additionally, AerCap’s Piotroski F-score is an excellent 8 out of 9.


Although the company has robust profitability, GuruFocus still lists two red flags for AerCap: a five-year average operating margin decline rate of 1.1% and an asset growth rate that exceeds the revenue growth rate. Additionally, AerCap’s share price is near a 10-year high while its price-sales ratio is near a two-year high.



Pabrai sold 300,975 shares of Southwest for an average price of $60.05. With this transaction, the guru trimmed 5.11% off his portfolio.


Southwest, one of Warren Buffett (Trades, Portfolio)’s largest airline holdings, said on April 26 the company had a “solid start to the year” with margins “near the top of the industry.” GuruFocus lists five positive investing signs for Southwest, including expanding operating margins, consistent revenue growth and a dividend yield near a 10-year high.


See also

Pabrai’s remaining two positions, Ferrari and Chrysler, operate in the auto manufacturing industry. Other key auto companies include Ford Motor Co. (NYSE:F), General Motors Co. (NYSE:GM) and Elon Musk’s Tesla Inc. (NASDAQ:TSLA).

Disclosure: No positions.

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

Rating: 4.0/5 (4 votes)



Snowballbuilder - 5 months ago    Report SPAM

I think Pabray , with his google and his fca/ Ferrari investments ,

will score another incredible 10 years record. Good for him and his investors. ... few bets big bets infrequent bets....

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