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Charles Brandes Picks Up 5 Stocks in 3rd Quarter

- By Sydnee Gatewood

Brandes Investment Partners founder Charles Brandes (Trades, Portfolio) disclosed he established five new positions in the third quarter.


A disciple of Benjamin Graham, Brandes seeks long-term capital appreciation by investing in companies with market caps that exceed $1 billion. Managing a portfolio of 129 stocks, he invests largely in the financial services sector. According to GuruFocus data, his U.S. Value Equity Fund returned 18.68% in 2016, outperforming the S&P 500"s return of 11.96%.

The guru invested in WPP PLC (WPPGY), Omnicom Group Inc. (OMC), Advance Auto Parts Inc. (AAP), Taro Pharmaceutical Industries Ltd. (TARO) and Plantronics Inc. (PLT).

WPP

Brandes purchased 472,017 shares of WPP for an average price of $98.23 per share, giving it 0.89% portfolio space.

The British advertising and public relations company has a market cap of $21.16 billion; its shares were trading around $84.7 on Monday with a price-earnings (P/E) ratio of 9.24, a price-book (P/B) ratio of 1.78 and a price-sales (P/S) ratio of 1.13.

The Peter Lynch chart below shows the stock is trading below its fair value.

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GuruFocus ranked WPP"s financial strength 5 of 10 and its profitability and growth 8 of 10. The company"s trailing dividend yield is 4.60% and its forward dividend yield is 4.59%. The dividend payout ratio is 41%.

With this transaction, Brandes became the company"s largest guru shareholder with 0.19% of outstanding shares. Ken Fisher (Trades, Portfolio), Jim Simons (Trades, Portfolio) and Scott Black (Trades, Portfolio) also own the stock.

Omnicom

The investor bought 91,311 shares of Omnicom for an average price of $77.21 per share, expanding the portfolio 0.14%.

The New York-based advertising company has a market cap of $15.92 billion; its shares were trading around $69.07 on Monday with a P/E ratio of 13.76, a P/B ratio of 6.31 and a P/S ratio of 1.06.

According to the Peter Lynch chart below, the stock is trading below its fair value.

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GuruFocus ranked Omnicom"s financial strength 5 of 10 and its profitability and growth 8 of 10. The company"s trailing dividend yield is 3.20% and its forward dividend yield is 3.16%. The payout ratio is 44%.

Of the 15 gurus invested in Omnicom, First Eagle Investment (Trades, Portfolio) has the largest holding with 6.55% of outstanding shares. Richard Pzena (Trades, Portfolio), Ruane Cunniff (Trades, Portfolio), John Rogers (Trades, Portfolio) and Jim Simons (Trades, Portfolio) are some other top guru shareholders.

Advance Auto Parts

Having previously exited a holding in Advance Auto in the first quarter of 2015, Brandes invested in 48,528 shares for an average price of $101.25 per share, impacting the portfolio 0.1%.

The Virginia-based retailer of replacement automotive parts has a market cap of $6.59 billion; its shares were trading around $90.62 on Monday with a P/E ratio of 18.71, a P/B ratio of 2.04 and a P/S ratio of 0.70.

Based on the Peter Lynch chart below, the stock appears to be trading above its fair value.

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GuruFocus ranked Advance Auto"s financial strength 6 of 10 and its profitability and growth 8 of 10. The company"s trailing dividend yield is 0.27% and its forward dividend yield is 0.26%. The payout ratio is 5%.

With 3.19% of outstanding shares, Steve Mandel (Trades, Portfolio) is the company"s largest guru shareholder. Sarah Ketterer (Trades, Portfolio), NWQ Managers (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Barrow, Hanley, Mewhinney & Strauss and several others also own the stock.

Taro Pharmaceutical

Brandes invested in 21,836 shares of Taro for an average price of $108.84 per share, expanding the portfolio 0.05%.

The New York-based pharmaceutical company has a market cap of $4.68 billion; its shares were trading around $112.66 on Monday with a P/E ratio of 14.2, a P/B ratio of 2.11 and a P/S ratio of 6.27.

According to the Peter Lynch chart below, the stock is trading slightly below its fair value.

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GuruFocus ranked Taro"s financial strength 10 of 10 and its profitability and growth 8 of 10. The company does not pay a dividend.

Simons has the largest position in Taro with 0.65% of outstanding shares. Paul Tudor Jones (Trades, Portfolio) and David Dreman (Trades, Portfolio) are also shareholders.

Plantronics

The guru purchased 28,424 shares of Plantronics for an average price of $46.08 per share, giving it 0.03% portfolio space.

The California-based manufacturer of communication equipment has a market cap of $1.71 billion; its shares were trading around $51.79 on Monday with a P/E ratio of 21.31, a P/B ratio of 4.49 and a P/S ratio of 2.

Based on the Peter Lynch chart below, the stock appears to be trading above its fair value.

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GuruFocus ranked Plantronics" financial strength 6 of 10 and its profitability and growth 8 of 10. The company"s trailing dividend yield is 1.15% and its forward dividend yield is 1.16%. The payout ratio is 25%.

PRIMECAP Management (Trades, Portfolio) has the largest holding among the gurus with 14.83% of Plantronics" outstanding shares. Other guru shareholders include Simons, Greenblatt, Mario Gabelli (Trades, Portfolio), John Hussman (Trades, Portfolio) and Chuck Royce (Trades, Portfolio).

Other positions Brandes added to during the quarter include YPF SA (YPF), Cardinal Health Inc. (CAH), HCA Healthcare Inc. (HCA), FTI Consulting Inc. (FCN) and Apache Corp. (APA).

Disclosure: I do not own any stocks mentioned.

This article first appeared on GuruFocus.