Francisco Garcia Parames (Trades, Portfolio), manager of Cobas Asset Management, disclosed last week that his top five buys for the third quarter were Golar LNG Ltd. (GLNG, Financial), Maire Tecnimont SpA (LTS:0QEP, Financial), CIR Compagnie Industriali Riunite SpA (MIL:CIR, Financial), Bayerische Motoren Werke AG (XTER:BMW3, Financial) and Danieli & C. Officine Meccaniche SpA (MIL:DANR, Financial).
Often dubbed the Spanish Warren Buffett (Trades, Portfolio), Parames applies key principles of value investing based on teachings from Benjamin Graham, Peter Lynch and the “Oracle of Omaha” within the Austrian business cycle framework. Parames, who spoke at our value conference earlier this year, managed Bestinfond (Trades, Portfolio) until September 2014. His 25-year track record near the top of performance rankings makes Parames one of Europe’s top asset managers in the value school.
As of quarter-end, Parames’ $657 million equity portfolio contains 69 stocks, including one new position. The top three sectors in terms of portfolio weight are energy, consumer cyclical and industrials.
Golar
Parames added 1,099,450 shares of Golar, increasing the position 51.72% and the equity portfolio 1.96%. Shares averaged $14.70 during the quarter.
Golar operates in the transportation, regasification, liquefaction and trading of liquefied natural gas. GuruFocus ranks Golar’s financial strength 3 out of 10 on several weak signs, which include debt ratios that underperform over 84% of global competitors and an Altman Z-score that suggests possible financial distress.
Parames said in his quarterly letter that Golar returned -1.5% during the quarter, contributing to the portfolio’s underperformance. Despite this, the fund manager increased his holding in Golar due to management’s increased confidence in the company and the stock trading at multiyear lows.
Mario Gabelli (Trades, Portfolio), a fellow value conference speaker, also has a holding in Golar.
Maire Tecnimont
Parames purchased 4,521,459 shares of Maire Tecnimont, dedicating 1.60% of the portfolio to the position. Shares averaged 2.37 euros ($2.62) during the quarter.
The Italian construction company provides engineering and construction services and products through its two business segments: technology, engineering and construction and infrastructure and civil engineering. GuruFocus ranks the company’s profitability 8 out of 10: Even though the company has a weak Piotroski F-score of 2 and profit margins that underperform over 53% of global competitors, Maire Tecnimont’s Joel Greenblatt (Trades, Portfolio) return on capital and three-year revenue growth rate outperform over 90% of global construction companies.
CIR Compagnie Industriali Riunite
Parames added 6,510,067 shares of CIR Compagnie Industriali Riunite, increasing the stake 28.26% and the equity portfolio 0.92%. Shares averaged 96 eurocents during the quarter.
CIR Compagnie Industriali Riunite operates three business areas: media, automotive components and health care. GuruFocus ranks the Italian company’s financial strength 4 out of 10: Although the cash-to-debt ratio outperforms 57.89% of global competitors, the Altman Z-score suggests possible financial distress.
Bayerische Motoren Werke
Parames added 93,215 preferred shares of Bayerische Motoren Werke, increasing the position 166.6% and the equity portfolio 0.72%. Shares averaged 52.34 euros during the quarter.
The German auto manufacturer produces vehicles and motorcycles with brands ranging from BMW to Rolls Royce. GuruFocus ranks BMW’s profitability 7 out of 10: Operating margins are outperforming 63.41% of global competitors despite BMW’s gross profit margins declining and Piotroski F-score ranking a weak 3 out of 9.
Danieli & C. Officine
Parames added 301,802 shares of Danieli & C. Officine, increasing the holding 21.49% and the equity portfolio 0.45%. Shares averaged 10.03 euros during the quarter.
The Italian machinery company manufactures and distributes steel and other nonferrous metal products through two business segments: steelmaking and plant making. GuruFocus ranks the company’s financial strength 6 out of 10: Even though debt ratios are close to the industry-median debt ratio, Danieli & C. Officine has a strong Piotroski F-score of 8 and cash-to-debt ratio of 2.25, outperforming over 65% of global competitors.
Disclosure: No positions.
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