Mohnish Pabrai (Trades, Portfolio), managing partner of Pabrai Investment Funds, disclosed in a regulatory filing that his 13F equity portfolio contains just two stocks as of the first quarter: Seritage Growth Properties (SRG, Financial) and Micron Technology Inc. (MU, Financial). The firm revealed that it sold more than 90% of its holding in Seritage during the quarter.
Pabrai manages a concentrated portfolio of smaller-cap stocks that are out of favor. The value investor said in a 2019 GuruFocus interview that he has allocated most of his funds in non-U.S. countries like India and South Korea, where he is finding more attractive opportunities. Investors should note that Pabrai’s 13F equity portfolio represents only a fraction of his firm’s total assets under management.
Investors should also note that the 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but the reports can still provide valuable information. Additionally, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Seritage Growth Properties
Pabrai sold 3,503,667 shares of Seritage Growth Properties (SRG, Financial), slashing 99.48% of the position and 21.47% of his firm’s equity portfolio.
Shares of Seritage averaged $11.01 during the first quarter. The GF Value Line labels the stock a possible value trap based on Monday’s price-to-GF Value ratio of just 0.58 and the stock’s low profitability and growth ranks of 2 out of 10.
The New York-based REIT has a GF Score of 61 out of 100: Despite the company’s low profitability, growth and financial strength ranks, Seritage has a GF Value rank of 8 out of 10 and a momentum rank of 7 out of 10.
Seritage has a profitability rank of 2 out of 10 based on several warning signs, which include profit margins underperforming more than 90% of global competitors.
Other gurus with holdings in Seritage include Mario Gabelli (Trades, Portfolio)’s GAMCO Investors Inc. (GBL) and Paul Tudor Jones (Trades, Portfolio)’ Tudor Investment.
Micron Technology
Pabrai owns 1,823,812 shares of Micron Technology (MU, Financial), which is unchanged from the previous quarter.
Shares of Micron averaged $85.53 during the first quarter; the stock is modestly undervalued based on Monday’s price-to-GF Value ratio of 0.86.
The Boise, Idaho-based memory chip company has a GF Score of 99 out of 100 based on a rank of 10 out of 10 for profitability and growth, a GF Value rank of 9 out of 10 and a rank of 8 out of 10 for financial strength and momentum.
Micron has a profitability rank of 10 out of 10 on several positive investing signs, which include a 4.5-star business predictability rank, a high Piotroski F-score of 8 and an operating margin that has increased approximately 34% per year on average over the past five years and outperforms more than 93% of global competitors.
