Mohnish Pabrai (Trades, Portfolio) is the managing partner of Pabrai Investment Funds, which oversees a group of focused value funds. During the first quarter, Pabrai added to his holdings in two stocks, while trimming two others, according to GuruFocus Real Time Picks.
Pabrai runs a concentrated portfolio with just eight stocks; his two largest holdings are automobile companies Fiat Chrysler (FCAU, Financial) and General Motors (GM, Financial).
Pabrai increased his stake in POSCO (PKX, Financial) by almost 226% during the first quarter, adding 681,910 shares at an average price of $60.84 per share as the stock price declined. He now owns a total of 983,680 shares.
POSCO is a Korean manufacturer and distributor of steel-rolled products and plates in domestic and overseas markets. The stock declined 21% over the past year and is currently priced at $59.72 with a P/E ratio of 31.2 and P/S ratio of 0.3. The current dividend yield is 0.8%, while the payout ratio is 25%.
Over the past five years, the company’s EBIT per share declined by almost 19%, recording at $7.14 in 2014. The operating margin has also been in long-term decline, as shown in the graph below.
He also upped his stake in WL Ross Holding Corp (WLRH, Financial), adding 64,716 shares for an average price of $10.04 per share, for a total of 310,386 shares.
WL Ross Holding is a blank-check company led by distressed asset investor Wilbur Ross (Trades, Portfolio). It’s also known on Wall Street as a SPAC, or special purpose acquisition company.
On the other hand, Pabrai slashed his position in Citigroup (C, Financial) by almost 96%, selling 1,216,000 shares for an average of $50.92 per share. He held on to 53,000 shares. The stock rose 16% over the past year, and the current P/E ratio is 21.4, while the P/S ratio is 2.15.
In 2014, Citigroup reported EBIT per share of $4.73, down from $6.41 the year before.
He also sold 108,349 shares of his largest holding Fiat Chrysler Automobiles (FCAU, Financial) for an average of $14.34 per share, leaving 13,800,220 shares in the position.
Over the past year, the stock price increased 55%, and now trades at $15.30, with a P/E ratio of 38.5 and P/S ratio of 0.2. In the past five years, the EBIT per share growth rate was 9.6%, while revenue growth was 21.2% over the same time period.
In 2014, the automobile manufacturer reported net income of $700 million, down from $1,240 million the year before.
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