1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
James Li
James Li
Articles (464)  | 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).

Alphabet

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.

74d8880612c0da248af97637c1191243.png

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).

882608020.png

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.

AerCap

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.

a32ffceae2cc0962520dacc20d2fb811.png

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.

1594807944.png

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.

1351348001.png

Southwest

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.

602423f5f6b782ac8f971143c1639383.png

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.

1828829292.png

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)

Voters:

Comments

snowballbuilder
Snowballbuilder - 1 week 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....

Please leave your comment:


Performances of the stocks mentioned by James Li


User Generated Screeners


sonderekjws 5-26-18
dale.e.schrammDW%20BEST
pbarker46111 Dividend stocks
aboer52AB up sel 2
CarstinTangible Book Discount, Low EV
DswhaleDW BEST
fruffoBershire
inigomPredecibl_baratas
pbarker46Sudden drop
stockmongerTrash June 2018
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat

{{numOfNotice}}
FEEDBACK