Brandes Investment Partners, the firm started by noted investor Charles Brandes (Trades, Portfolio), selected eight stocks in the second quarter, it reported Monday.
The value investors purchased: Jefferies Financial Group Inc. (JEF, Financial), Shire PLC (SHPG, Financial), Turkcell Iletisim Hizmetleri AS (TKC, Financial), Taiwan Semiconductor Manufacturing Co. Ltd. (TSM, Financial), White Mountains Insurance Group Ltd. (WTM, Financial), Cooper Tire & Rubber Co. (CTB, Financial), Sierra Wireless Inc. (SWIR, Financial) and Quest Diagnostics Inc. (DGX, Financial).
By also emptying the portfolio of eight positions, Brandes had quarter-over-quarter turnover of 6%. The portfolio ended the quarter with a value of $4.44 billion and 138 stocks listed. Financial services stocks accounted for the largest portion of the portfolio at 25%. Health care followed at 20.5% and industrials at 13.1%.
Charles Brandes (Trades, Portfolio) retired from the firm in February, but its investing style still rests on finding undervalued companies through examination of business fundamentals while paying limited attention to market vagaries. A second-quarter letter summarized the managers’ practices in the current market:
“In these unconventional times, as always, we believe it prudent to emphasize an examination of company fundamentals as our first consideration—even as we assess external factors that can fundamentally change the value of a business (technological advances, competitive dynamics, government policy, etc.). Doing both—focusing on the micro while remaining cognizant of the macro—in a consistent, careful and thoughtful manner is, in our opinion, the best way to navigate the always-intriguing markets.”
The new buys
Jeffries Financial Group Inc. (JEF, Financial)
Brandes Investment Partners purchased 2,642,753 shares of Jeffries Financial Group, giving it 1.35% portfolio weight. The stock’s second-quarter share price averaged $23.
Jefferies Financial Group Inc. has a market cap of $7.76 billion; its shares were traded around $23.28 with a P/E ratio of 12.19 and P/S ratio of 1.18. The trailing 12-month dividend yield of Jefferies Financial Group Inc. stocks is 1.70%. The forward dividend yield of Jefferies Financial Group Inc. stocks is 2.11%.
Brandes purchased 32,141 shares of Shire PLC, giving it 0.12% portfolio weight. The stock’s share price averaged $161.
Shire Plc has a market cap of $52.18 billion; its shares were traded around $169.72 with a P/E ratio of 11.21 and P/S ratio of 3.47. The trailing 12-month dividend yield of Shire Plc stocks is 0.61%. The forward dividend yield of Shire Plc stocks is 0.62%. Shire Plc had an annual average earnings growth of 15.80% over the past five years.
Turkcell Iletisim Hizmetleri AS (TKC, Financial)
Brandes purchased 335,020 shares of Turkcell Iletisim Hizmetleri AS, giving it 0.05% portfolio weight. The stock’s share price averaged $8.
Turkcell Iletisim Hizmetleri AS has a market cap of $4.61 billion; its shares were traded around $4.48 with a P/E ratio of 14.07 and P/S ratio of 1.28. The trailing 12-month dividend yield of Turkcell Iletisim Hizmetleri AS stocks is 9.20%. The forward dividend yield of Turkcell Iletisim Hizmetleri AS stocks is 5.02%. Turkcell Iletisim Hizmetleri AS had an annual average earnings growth of 3.90% over the past 10 years. GuruFocus rated Turkcell Iletisim Hizmetleri AS the business predictability rank of 3-star.
Taiwan Semiconductor Manufacturing Co. Ltd. (TSM, Financial)
Brandes purchased 31,258 shares of Taiwan Semiconductor Manufacturing Co. Ltd., giving it 0.03% portfolio weight. The stock’s share price averaged $40.
Taiwan Semiconductor Manufacturing Co. Ltd. has a market cap of $206.18 billion; its shares were traded around $40.75 with a P/E ratio of 18.16 and P/S ratio of 6.38. The trailing 12-month dividend yield of Taiwan Semiconductor Manufacturing Co. Ltd. stocks is 3.31%. The forward dividend yield of Taiwan Semiconductor Manufacturing Co. Ltd. stocks is 3.28%. Taiwan Semiconductor Manufacturing Co. Ltd. had an annual average earnings growth of 16% over the past 10 years. GuruFocus rated Taiwan Semiconductor Manufacturing Co. Ltd. the business predictability rank of 4.5-star.
White Mountains Insurance Group Ltd. (WTM, Financial)
Brandes purchased 414 shares of White Mountains Insurance Group Ltd., giving it 0.01% portfolio weight. The stock’s share price averaged $881.
White Mountains Insurance Group Ltd. has a market cap of $2.99 billion; its shares were traded around $939.14 with a P/E ratio of 7.23 and P/S ratio of 9.49. The trailing 12-month dividend yield of White Mountains Insurance Group Ltd. stocks is 0.11%. The forward dividend yield of White Mountains Insurance Group Ltd. stocks is 0.11%.
Cooper Tire & Rubber Co. (CTB, Financial)
Brandes purchased 10,833 shares of Cooper Tire & Rubber Co., giving it 0.01% portfolio weight. The stock’s share price averaged $27.
Cooper Tire & Rubber Co. has a market cap of $1.45 billion; its shares were traded around $28.90 with a P/E ratio of 33.99 and P/S ratio of 0.54. The trailing 12-month dividend yield of Cooper Tire & Rubber Co. stocks is 1.46%. The forward dividend yield of Cooper Tire & Rubber Co. stocks is 1.40%. Cooper Tire & Rubber Co. had an annual average earnings growth of 3.50% over the past five years.
Sierra Wireless Inc. (SWIR, Financial)
Brandes purchased Sierra Wireless Inc., giving it 0.01% portfolio weight. The stock’s share price averaged $17.
Sierra Wireless Inc. has a market cap of $728.350 million; its shares were traded around $19.80 with and P/S ratio of 0.94. Sierra Wireless Inc. had an annual average earnings growth of 45.30% over the past five years.
See Brandes Investment Partners’ portfolio here.
