Cobas Asset Management leader Francisco Garcia Parames (Trades, Portfolio), a self-taught follower of Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial) CEO Warren Buffett (Trades, Portfolio)’s investment approach, disclosed this week his firm's top six buys for the second quarter were Golar LNG Ltd. (GLNG, Financial), Valaris PLC (VAL, Financial), Cofide De Benedetti SpA (LTS:0ONR, Financial), Kosmos Energy Ltd. (KOS, Financial), Babcock International Group PLC (LSE:BAB, Financial) and Mylan NV (MYL, Financial).
Parames, one of our speakers at this year’s Value Conference, obtained an MBA at the IESE Business School in 1989 and managed Bestinver’s Bestinfond (Trades, Portfolio) until September 2014. His track record of 25 years near the top of performance rankings places him as one of the top European asset managers in the value school.
The Cobas chairman and chief investment officer strictly follows key value investing principles from legendary investors like Benjamin Graham, Peter Lynch and Buffett. The author of “Invirtiendo a Largo Plazo,” Spanish for “investing for the long term,” applies such principles within the framework of the Austrian business cycle theory.
As of quarter-end, Cobas’ $720 million equity portfolio contains 71 stocks, of which four are new holdings. The firm’s top sectors in terms of portfolio weight are industrials, which represents 40.60% of the equity portfolio, and consumer cyclical, which represents 25.84% of the equity portfolio.
Golar
Cobas added 576,239 shares of Golar, increasing the holding 37.19% and the equity portfolio 1.31%. Shares averaged $19.05 during the quarter.
The Bermuda-based company liquefies natural gas and transports liquefied natural gas products around the globe. GuruFocus ranks Golar’s financial strength 4 out of 10: Although the company has a strong Piotroski F-score of 6, its debt ratios are underperforming over 78% of global competitors. The website further warns that Golar’s long-term debt has increased approximately $657.17 million over the past three years.
Fellow 2019 GuruFocus Value Conference Speaker Mario Gabelli (Trades, Portfolio) also established a holding in Golar during the quarter.
Valaris
The firm added 1,113,291 shares of Valaris, increasing the position 238.71% and the equity portfolio 1.18%. Shares averaged $11.57 during the quarter.
The U.K.-based company operates one of the newest jackup and deep-water fleets in the contract drilling industry, drilling for oil and natural gas globally. GuruFocus ranks the company’s financial strength 4 out of 10: Although the equity-to-asset ratio outperforms 56.82% of global competitors, Valaris has a weak Piotroski F-score of 1 and Altman Z-score of 0.33.
Cofide de Benedetti
Cobas purchased 13,810,638 shares of Cofide de Benedetti, giving the stake 0.90% equity portfolio space. Shares averaged 0.50 euros (56 cents) during the quarter.
The Turin, Italy-based company engages in the media, automotive components and health care sectors. According to GuruFocus warning signs data, a Premium feature, Cofide has expanding operating margins yet decelerating revenue growth over the trailing 12 months.
Kosmos
The fund purchased 957,319 shares of Kosmos, giving the position 0.75% equity portfolio weight. Shares averaged $6.38 during the quarter.
The Dallas-based energy company explores and produces oil and natural gas, focusing on frontier and emerging areas along the Atlantic. GuruFocus ranks Kosmos’ financial strength 4 out of 10 on several weak indicators, including debt ratios that underperform over 76% of global competitors. The website further warns that Kosmos’ long-term debt has increased by $1.2 billion over the past three years.
Babcock
Cobas added 1,084,562 shares of Babcock, increasing the stake 20.62% and its equity portfolio 0.75%. Shares averaged 4.94 pounds ($5.97) during the quarter.
The U.K.-based company engages in the construction and decommission of nuclear power plants and submarines; maintenance support; fleet management for aviation, marine and land; and provision of technical training and emergency services. GuruFocus ranks Babcock’s financial strength 6 out of 10: Although the company has an equity-to-asset ratio that outperforms 55% of global competitors, its debt ratios are underperforming over 66% of global competitors.
Mylan
The fund added 283,687 shares of Mylan, increasing the position 82.11% and the equity portfolio 0.67%. Shares averaged $22.14 during the quarter.
GuruFocus ranks the U.K.-based drug manufacturer’s financial strength 4 out of 10 on the heels of debt ratios underperforming over 85% of global competitors.
The Vanguard Health Care Fund (Trades, Portfolio) also added to its position in Mylan during the quarter.
Disclosure: No positions.
Read more here:
- Diamond Hill Capital’s Top 4 Buys in 2nd Quarter
- Kahn Brothers’ Top 6 Buys in the 2nd Quarter
- Mario Gabelli’s Top 6 Buys in the 2nd Quarter
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