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Mohnish Pabrai Triples Stake in Micron Technology

- By Holly LaFon

Mohnish Pabrai (Trades, Portfolio), the managing partner of Pabrai Funds, expanded his U.S. holdings in the first quarter by tripling his holding of Micron Technology (MU).


Pabrai moved the vast majority of his portfolio into India, Turkey and South Korea after he began having difficulty finding adequate businesses in the U.S. market. Semiconductor memory company Micron is his only U.S. investment out of the roughly $1 billion he manages across all his funds.

The investor found Micron while searching through the publication Value Line hunting for stocks with low price-earnings ratios, he told GuruFocus in an interview in March. At the time, Micron was among the lowest price-earnings ratio stocks of the 1,700-stock universe.

"So I noticed this very low P/E, and then a fund manager friend of mine mentioned that he owned the stock. And so I said, 'Okay, this person isn't exactly an idiot, so why don't I drill down and just see what's going on with Micron?' And when I drilled down, I decided it was worth taking a position," he said.

In the first quarter, Pabrai increased his position in Micron Technology by 210.74%, buying 1,152,418 shares. He ended the quarter with 1,699,265 shares, equivalent to 0.15% of the $42.59 billion market cap company.

Micron stock had an average price of around $39 per share in the first quarter. Pabrai started his position in the fourth quarter when the price averaged $38. The stock's price has climbed almost 18% year to date, trading around $38.46 on Tuesday afternoon.

Micron has a price-earnings ratio of 3.53, price-book ratio of 1.27 and price-sales ratio of 1.55.

Several other prominent investors have large positions in the stock as well. At the end of the fourth quarter, David Tepper (Trades, Portfolio) of Appaloosa Management had roughly 25.48% of his public equity portfolio invested in Micron, with 1.43% of its outstanding shares. He reduced the holding by more than half in the fourth quarter. A media-averse value firm, Primecap Management, has the largest position of investors GuruFocus tracks, with 5.22% of its outstanding shares. It started trading in the company before the first quarter of 2009, when the price averaged around $4 per share.

Pabrai has one other U.S.-listed stock, Fiat Chrysler Automobiles NV (FCAU), which has its headquarters in the U.K. According to his portfolio update, Pabrai boosted that position by 0.05% in the first quarter, adding 6,657 shares. He ended the quarter with 13,105,047 shares of the company, equaling 1.08% of its outstanding shares.

The stock's price averaged $15 for the quarter. Pabrai started a position in the fourth quarter of 2014 when it averaged $11. Year to date, shares of Fiat Chrysler climbed 4.23% to $14.52 Tuesday afternoon.

See Mohnish Pabrai (Trades, Portfolio)'s portfolio here.

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This article first appeared on GuruFocus.