Investor Sarah Ketterer (Trades, Portfolio), leader of Causeway Capital Management, revealed five new holdings in her third-quarter portfolio on Thursday.
Founded in 2001, the guru’s Los Angeles-based firm seeks to achieve superior risk-adjusted returns by investing in mispriced equities in both developed as well as emerging markets.
Based on these criteria, Ketterer established positions in Brixmor Property Group Inc. (BRX, Financial), Anglogold Ashanti Ltd. (AU, Financial), JD.com Inc. (JD, Financial), Banco Santander (Brasil) SA (BSBR, Financial) and Qudian Inc. (QD, Financial) during the quarter.
Brixmor Property Group
The guru invested in 3.7 billion shares of Brixmor Property Group, allocating 0.92% of the equity portfolio to the stake. Shares traded for an average price of $18.77 during the quarter.
The New York-based real estate investment trust has a $6.65 billion market cap; its shares were trading around $22.57 on Monday with a price-earnings ratio of 23.02, a price-book ratio of 2.41 and a price-sales ratio of 5.69.
The Peter Lynch chart shows the stock is trading above its fair value, suggesting it is overpriced.
GuruFocus rated Brixmor’s financial strength 3 out of 10. In addition to having a large debt load and low interest coverage, the Altman Z-Score of 0.94 warns the company could be at risk of going bankrupt. The REIT has also recorded a decline in revenue per share over the last five years.
The company’s profitability scored a 6 out of 10 rating, driven by an expanding operating margin and returns that outperform over half of its competitors. Brixmor also has a moderate Piotroski F-Score of 5, which indicates business conditions are stable.
Of the gurus invested in the REIT, Jim Simons (Trades, Portfolio)’ Renaissance Technologies has the largest stake with 1.41% of outstanding shares. Chris Davis (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Steven Cohen (Trades, Portfolio), Richard Pzena (Trades, Portfolio) and Mario Gabelli (Trades, Portfolio) are also shareholders.
Anglogold Ashanti
Ketterer picked up 806,900 shares of Anglogold Ashanti, dedicating 0.18% of the equity portfolio to the holding. The stock traded for an average price of $19.87 per share during the quarter.
The gold miner, which is headquartered in Johannesburg, South Africa, has a market cap of $8.11 billion; its shares were trading around $19.56 on Monday with a price-earnings ratio of 39.65, a price-book ratio of 3.02 and a price-sales ratio of 2.17.
According to the Peter Lynch chart, the stock is overvalued.
Anglogold’s financial strength was rated 5 out of 10 by GuruFocus. While the company has adequate interest coverage, the Altman Z-Score of 2.26 suggests it is under some financial pressure as it has recorded a decline in revenue per share over the past three years.
The company’s profitability scored a 6 out of 10 rating. Although the operating margin is in decline, it still outperforms over half of its industry peers. Anglogold also has strong returns, a moderate Piotroski F-Score of 6 and a one-star business predictability rank. GuruFocus says companies with this rank typically see their stocks gain an average of 1.1% per annum over a 10-year period.
With 3.08% of outstanding shares, John Paulson (Trades, Portfolio) is the company’s largest guru shareholder. Howard Marks (Trades, Portfolio), Simons’ firm, First Eagle Investment (Trades, Portfolio), Ron Baron (Trades, Portfolio), Pioneer, John Hussman (Trades, Portfolio), Louis Moore Bacon (Trades, Portfolio), Ray Dalio (Trades, Portfolio) and Gabelli also have positions in the stock.
JD.com
Having previously exited a position in JD.com in the first quarter of 2018, the investor entered a new 309,600-share holding. The trade had an impact of 0.10% on the equity portfolio. During the quarter, the stock traded for an average per-share price of $30.23.
The Chinese e-commerce company has a $48.95 billion market cap; its shares were trading around $33.72 on Monday with a price-earnings ratio of 55, a price-book ratio of 4.83 and a price-sales ratio of 0.66.
Based on the Peter Lynch chart, the stock appears to be overvalued.
GuruFocus rated JD.com’s financial strength 6 out of 10 on the back of strong debt ratios. Although it has low interest coverage, the Altman Z-Score of 3.17 indicates the company is in good financial health even though it has recorded a slowdown in revenue per share growth over the past 12 months.
The company’s profitability did not fare as well, scoring a 4 out of 10 rating. Despite having low margins, JD.com’s returns outperform more than half of its competitors. It also has a moderate Piotroski F-Score of 5.
Chase Coleman (Trades, Portfolio) is the company’s largest guru shareholder with a 3.62% stake. Other top guru investors are Andreas Halvorsen (Trades, Portfolio), Dodge & Cox, Ken Fisher (Trades, Portfolio), First Pacific Advisors (Trades, Portfolio), Steven Romick (Trades, Portfolio), Davis, Cohen, Simons’ firm, the Matthews China Fund (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), Bacon, Dalio, Philippe Laffont (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio) and Ruane Cunniff (Trades, Portfolio).
Banco Santander
Ketterer purchased 231,400 shares of Banco Santander, giving it 0.03% space in the equity portfolio. During the quarter, the stock traded for an average price of $11.13 per share.
The Brazilian bank has a market cap of $82.58 billion; its shares were trading around $11.02 on Monday with a price-earnings ratio of 13.37, a price-book ratio of 1.87 and a price-sales ratio of 2.07.
The Peter Lynch chart suggests the stock is overvalued.
Banco Santander’s financial strength was rated 3 out of 10 by GuruFocus on the back of low debt ratios that underperform at least half of industry peers. The company has also recorded a slowdown in revenue per share growth over the past 12 months.
The bank’s profitability fared better, scoring a 5 out of 10 rating. While Banco Santander’s return on equity underperforms over half of its competitors, the net margin and return on assets are outperforming the industry. It also has a one-star business predictability rank.
Of the gurus invested in Banco Santander, Ken Heebner (Trades, Portfolio) has the largest stake with 0.06% of outstanding shares. Simons’ firm, Grantham and Cohen are also shareholders.
Qudian
The investor bought 348,900 shares of Qudian, expanding the equity portfolio by 0.03%. During the quarter, the stock traded for an average price of $8.05 per share.
The Chinese company, which is an online provider of small consumer credit, has a $2.09 billion market cap; its shares were trading around $7.50 on Monday with a price-earnings ratio of 4.34, a price-book ratio of 1.18 and a price-sales ratio of 1.92.
According to the Peter Lynch chart, the stock is undervalued.
GuruFocus rated Qudian’s financial strength 7.3 out of 10 on the back of comfortable interest coverage and high debt ratios. The robust Altman Z-Score of 3.74 indicates the company is in good financial health.
The company’s profitability scored a 5 out of 10 rating. In addition to strong margins and returns that outperform a majority of competitors, Qudian is supported by a moderate Piotroski F-Score of 5.
With 0.20% of outstanding shares, Lee Ainslie (Trades, Portfolio) is the company’s largest guru shareholder. Simons’ firm and Cohen also own the stock.
Additional trades and portfolio composition
During the quarter, Ketterer also beefed up several other positions, including Ryanair Holdings PLC (RYAAY, Financial), Vipshop Holdings Inc. (VIPS, Financial), Halliburton Co. (HAL, Financial), Baidu Inc. (BIDU, Financial) and Synnex Corp. (SNX, Financial).
The guru’s $8.37 billion equity portfolio, which is composed of 86 stocks, is largely invested in the technology, financial services, energy and basic materials sectors.
Disclosure: No positions.
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