Mohnish Pabrai (Trades, Portfolio) in the fourth quarter bought a small stake in Micron Technology (MU, Financial), a stock whose price dropped by about half from its peak in May through the end of the year.
Pabrai’s position of 546,847 shares totaled 0.05% of the company’s shares outstanding. The Micron position is only the second in his Dalal Street LLC's public portfolio of U.S.-listed stocks, accounting for 8.39% of the space. London-based Fiat Chrysler Automobiles NV (FCAU, Financial) made up the remaining 91.61% weighting at the end of the fourth quarter.
The $230 million portfolio represents only a fraction of Pabrai’s assets across his firms. His Pabrai Investment Funds, founded in 1999, had assets under management of $643 million in 2018. He also started his Dhando Holdings in 2014 with $150 million in assets. In June 2018, Pabrai told India’s The Economic Times he had 40% of the $1 billion he manages invested in India and 0.1% in the U.S.
“In fact, I am bullish on the U.S. in general, it is just that things are not heavily mispriced and under priced,” he told the publication in an interview. “At the same time, India has increased quite dramatically. It has gone from basically less than a $100 million two-three years ago, to over $400 million and so all of that has happened because I am able to find opportunity here and I am not able to find opportunity in U.S.”
Pabrai’s new Micron Technology position is valued around $17.35 million.
The stock has rewarded investors who purchased during the fourth quarter with a 23.36% rise year to date, closing Wednesday at $41.68 per share. It has gained 12.04% from its fourth-quarter average share price around $37.
Shares of the semiconductor company have attracted a number of high-profile investors, including hedge fund manager David Tepper (Trades, Portfolio). The Appaloosa Management founder had 29.03% of his long portfolio invested in the stock at the end of the third quarter, saying as recently as September that he was still “very, very long” the stock and that “the demand side is going to be good for a long time.”
Yacktman Asset Management (Trades, Portfolio) and Ray Dalio (Trades, Portfolio) also increased their Micron holdings in the fourth quarter, while John Buckingham (Trades, Portfolio) started a position. Jeremy Grantham (Trades, Portfolio)'s GMO sold about 93% of its Micron shares.
The Boise, Idaho-based company produces DRAM and NAND memory chips used in artificial intelligence, servers, autonomous vehicles, cloud and other prevalent technology.
For its first fiscal quarter ended Nov. 29, Micron's revenue fell 6% year-over-year to $7.91 billion. The decline was primarily due to price reductions of its DRAM and NAND products amid market weakness in addition to a problem at one of its manufacturing suppliers. Enterprise and cloud servers, graphics and solid-state drive (used in data storage) markets led declines in demand, partially offset by strength in mobile product sales.
Net income for the quarter totaled $3.29 billion, or $2.81 per diluted share, which increased from $2.68 billion, or $2.19 per diluted share, a year earlier.
Micron ended the quarter with record net cash of $3.07 billion and long-term debt of $3.73 billion.
See Mohnish Pabrai (Trades, Portfolio)'s U.S.-listed portfolio for Dalal Street here.
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