Guru Charles Brandes' First Quarter Top Holdings

GuruFocus.com

A disciple of value investing Guru Benjamin Graham, Charles Brandes founded Brandes Investment Partners in 1974. Brandes' funds continue to perform well, with both the Global Equity fund and the International Equity fund producing double digit returns over the past year.


Over the first quarter, Brandes bought 13 new stocks bringing his total number of stocks held to 168. The guru's portfolio is currently valued at over $7.93 billion.


Petroleo Brasilerio SA Petrobras (PBR.A)

Brandes' largest holding goes to Petrobras where the guru maintains 31,068,510shares of the company's stock. Brandes' position makes up for 5.8% of his entire portfolio as well as 0.48% of the company's shares outstanding.

During the first quarter Brandes increased his position 36.49% by purchasing 8,305,491 shares. The guru purchased these shares in the first quarter price range of $10.68 to $14.69, with an estimated average quarterly price of $12.32. Since then the price per share has increased 31.8%.

Brandes' holding history as of the first quarter:

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It is an integrated oil and gas company in Brazil and in Latin America who is the supplier of crude oil and oil products. Its activities comprise five business segments: Exploration and Production, Supply, Distribution, Gas and Energy and International.

Petrobras' historical revenue and net income:

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The analysis on Petrobras reports that the company's revenue has been in decline over the past five years. It also notes that the company has issued $48.2 billion of debt over the past three years but that its debt level is acceptable.

According to the Peter Lynch Chart Petrobras appears to be undervalued:

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Petroleo Brasileiro SA Petrobras has a market cap of $105.14 billion. Its shares are currently trading at around $16.12 with a P/E ratio of 8.20, a P/S ratio of 0.70 and a P/B ratio of 0.48. The company had an annual average earnings growth of 12.90% over the past ten years.

America Movil SAB de CV (AMX)

The guru's largest holding is in America Movil where he owns 16,504,843 shares. His position in the company makes up for 4.1% of his entire portfolio as well as 0.44% of the company's shares outstanding.

During the first quarter Brandes increased his position 0.08% by purchasing 13,695 shares of the company's stock. He bought these shares in the quarterly price range of $19.17 to $23.37, with an estimated average quarterly price of $20.71 per share. The price per share has dropped -3.8% since then.

Brandes' holding history:

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America Movil, based in Mexico, is the largest provider of wireless communications services in Latin America based on subscribers. The company offers services in 18 countries, maintains more than 263 million mobile customers and holds the capability of coverage for a combined population of 847 million.

America Movil's historical revenue and net income:

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The analysis on America Movil reports that its revenue has been in decline over the past year, it has issued MXN12.3 billion of debt over the past three years and its dividend yield is at a 10-year high.

The Peter Lynch chart shows that America Movil appears to be undervalued:

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America Movil has a market cap of $70.76 billion. Its shares are currently trading at around $20.08 with a P/E ratio of 13.00, a P/S ratio of 1.20 and a P/B ratio of 4.29. The company had an annual average earnings growth of 21.90% over the past ten years.

GuruFocus rated America Movil the business predictability rank of 3-star.

Tim Participacoes SA (TSU)

The guru's third largest holding is in Tim Participacoes, formerly known as Tim Holding Company. The guru holds on to 10,767,304 shares of the company's stock, representing 3.5% of the company's shares outstanding.

Over the past quarter Brandes reduced his holdings -20.63% by selling a total of 2,797,879 shares of the company's stock. He sold these shares near the estimated average quarterly price of $25.96 per share. And since this sell the shares are trading up about 9%.

Brandes' historical holding history:

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Tim Participacoes is the largest company in Brazil that offers mobile cellular service throughout the Brazilian territory, by means of its subsidiaries TIM Celular S.A. and TIM Nordeste S.A. The company is the largest GSM (Global System for Mobile communications) operator of the country, in terms of clients and revenues.

The analysis on Tim Participacoes SA reports that the company's revenue has slowed over the past year, its dividend yield is close to a 5-year low and that its operating margin is expanding.

Charles Brandes, Jim Simons and Steven Cohen are the only gurus that currently hold a position in Tim Holding.

Tim Participacoes has a market cap of $13.69 billion. Its shares are currently trading at around $28.32 per share with a P/E ratio of 9.50 and a dividend yield of 1.30%. The company had an annual average earnings growth of 23.70% over the past ten years.

Microsoft (MSFT)

The guru's fourth largest position is in Microsoft where he owns 6,324,050 shares of the company's stock. His position represents 3.3% of his entire holdings as well as 0.08% of the company's shares outstanding.

During the past quarter Brandes dropped -14.03% of his holdings by selling 1,032,250 shares. He sold these shares for an estimated average quarterly price of $37.54 per share. Since then the price per share has increased approximately 5.3%.

Brandes' historical holding history:


Microsoft develops, manufactures, licenses and supports a wide range of software products and services for many different types of computing devices.

Microsoft's historical revenue and net income:

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The analysis on Microsoft reports that the company's price is near a 10-year high, its gross and operating margins have been in a 5-year decline and its interest coverage is comfortable, meaning they have enough cash to cover all debt. The company has also shown predictable revenue and earnings growth.

The Peter Lynch chart shows that Microsoft currently appears to be undervalued:

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Microsoft has a market cap of $330.25 billion. Its shares are currently trading at around $39.98 with a P/E ratio of 14.90, a P/S ratio of 4.00 and a P/B ratio of 3.57. The company has a dividend yield of 2.60%. The company has also seen average earnings growth of 14.80% over the past ten years.

GuruFocus rated Microsoft the business predictability rank of 3.5-star.

Banco Santander Brasil SA (BSBR)

Charles Brandes fifth largest holding is in Banco Santander Brasil where he maintains 4,487,405 shares of the company's stock. The guru's position represents 3.1% of his entire holdings and 1.09% of the company's shares outstanding.

During the first quarter Brandes upped his holdings a notable 32.45%. The guru bought a total of 10,404,985 shares of BSBR in the quarterly price range of $49.91 to $55.11, with an estimated average quarterly price of $52.59 per share. Since then the price per share has increased an additional 7.6%.

Brandes' historical holding history:

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Banco Santander Brasil SA is a full-service bank in Brazil. The company has three business segments: Commercial Banking, Global Wholesale Banking and Asset Management and Insurance.

Banco Santander's historical revenue and net income:

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The analysis on Banco Santander reports that the company's revenue has been in decline over the past three years, the company's price is near a 1-year high and the company's dividend yield is near a 5-year high.

Banco Santander Brasil has a market cap of $25.33 billion. Its shares are currently trading at around $6.71. The company's dividend yield is currently at 3.90%, and they had an annual average earnings growth of 0.70% over the past five years.

Check out Charles Brandes' complete first quarter portfolio here.

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This article first appeared on GuruFocus.

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