U.S. Markets close in 4 hrs 7 mins

Top 4 Holdings of Howard Marks' Oaktree

According to current portfolio statistics, the top four holdings of Howard Marks (Trades, Portfolio)' Oaktree as of third quarter-end in terms of portfolio weight are Vistra Energy Corp. (NYSE:VST), TORM PLC (NASDAQ:TRMD), Star Bulk Carriers Corp. (NASDAQ:SBLK) and Ally Financial Inc. (NYSE:ALLY).


As chairman of Oaktree, Marks is responsible for ensuring the firm's adherence to its core investment philosophy, communicating closely with clients concerning products and strategies and managing the firm. Oaktree invests heavily in debt, preferred stocks and convertible bonds.

01b68f9a58bccec50e037015ed9c50f9.png

Oaktree chairman sheds light on 'old' bull market

On Tuesday, Marks told CNBC's Wilfred Frost that the economic expansion and bull market are "old" and that one "should not have as much risk as one did three years ago or six years ago." Berkshire Hathaway Inc. (NYSE:BRK.A)(NYSE:BRK.B) CEO Warren Buffett (Trades, Portfolio)'s favorite market indicator stood at 148.3%, approximately 0.2% below the all-time high of 148.5% from March 2000.

1576095302933.png

The Dow Jones Industrial Average closed at 27,911.30, up 29.58 points from Monday's close of 27,881.72. The markets increased on the heels of Federal Reserve Chairman Jerome Powell's comments that the Fed kept the target rate between 1.5% and 1.75% and is "not likely to raise rates in 2020." Stocks boosting the Dow include United Technologies Corp. (NYSE:UTX) and Walt Disney Co. (NYSE:DIS).

3f61fb732f6127ca32c8504adc50b4e9.png

Despite the overvalued stock market, Marks still believes the bull market can continue in the upcoming years, especially on the back of November job numbers significantly topping estimates.

Oaktree portfolio overview

As of Sept. 30, Oaktree's $4.04 billion equity portfolio contains 84 stocks, of which 10 represent new holdings. The top three sectors in terms of portfolio weight are energy, utilities and financial services, with weights of 20.98%, 18.80% and 18.72%.

99fff3239227700b81c3bcee29668bd5.png

Vistra Energy

Oaktree owns 27,278,055 shares of Vistra Energy, giving the stake 18.06% weight in the equity portfolio.

3def0d438e060b0dc05975d31734d02c.png

The Irving, Texas-based company operates an integrated power business in over 20 U.S. states. GuruFocus ranks Vistra Energy's profitability 5 out of 10: Although the company has a strong Piotroski F-score of 7, operating margins and returns are underperforming over 52% of global competitors.

92c72b672c13c4f36bd8fa86bd5d5ffb.png

Other gurus with holdings in Vistra Energy include Jim Simons (Trades, Portfolio)' Renaissance Technologies and David Tepper (Trades, Portfolio).

3d5d01a102d72b4deac3ab1955b0c5fc.png

TORM

Oaktree owns 48,263,921 shares of TORM, giving the position 10.13% weight in the equity portfolio.

1dc5f6f3248e8a3468ee76574d34e16a.png

The U.K.-based energy company owns and operates product tankers and dry carriers. GuruFocus ranks TORM's financial strength 4 out of 10 on several weak indicators, which include a poor Altman Z-score of 1.52, a Beneish M-score that suggests possible earnings manipulation and a debt-to-equity ratio that underperforms 71.69% of global competitors.

1118086b09abb07755fa5d5d8fe6f7bc.png

Star Bulk Carriers

Oaktree owns 38,063,697 shares of Star Bulk Carriers, giving the holding 9.50% weight in the equity portfolio.

f44832795665548d41f9282337c55870.png

The Greek marine shipping company provides seaborne transportation solutions in the dry bulk sector. According to GuruFocus, Star Bulk Carriers' interest coverage and debt-to-Ebitda ratios underperform over 86% of global competitors, suggesting low financial strength.

Ally Financial

Oaktree owns 10,943,541 shares of Ally Financial, giving the stake 8.99% weight in the equity portfolio.

4a757d11a263c9fba394a05ded6895ab.png

The Detroit-based company operates as a financial holding company and a bank holding company. According to GuruFocus, Ally Financial's cash-to-debt, equity-to-asset and debt-to-equity ratios are underperforming over 70% of global competitors, suggesting high leverage and low financial strength.

Disclosure: No positions.

Read more here:

  • Mason Hawkins' Southeastern Curbs Stake in Summit Materials
  • Charles de Vaulx's Top 5 Buys of the 3rd Quarter
  • Brandes Investments' Top 5 Buys in the 3rd Quarter



Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.

This article first appeared on GuruFocus.