Mohnish Pabrai (Trades, Portfolio), manager of the Pabrai Investment Funds, disclosed in a regulatory 13F filing that his firm’s top trades during the fourth quarter of 2022 included boosts to its holdings in Brookfield Corp. (BN, Financial) and Micron Technology Inc. (MU, Financial). The 13F equity portfolio also gained a holding in Brookfield Asset Management Ltd. (BAM, Financial) thanks to its spinoff from Brookfield Corp. The holding in Seritage Growth Properties (SRG, Financial) was unchanged.
The firm invests primarily in small-cap, out-of-favor companies. Pabrai said in a 2019 interview with GuruFocus that he had moved most of his funds into Indian, Turkish and South Korean companies, where he was finding better opportunities. As such, Pabrai’s 13F equity portfolio represents only a small portion of the firm’s total assets under management.
As of December 2022, the firm’s $121-million 13F equity portfolio contains four stocks with a quarterly turnover ratio of 20%. The equity portfolio has a 77.14% weight in technology and a 22.82% weight in financial services.
Investors should be aware 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 they can still provide valuable information. Further, 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.
Brookfield Corp and Brookfield Asset Management
Pabrai ended the quarter with an additional 532,016 shares of Brookfield Corp. (BN, Financial), increasing the position by 295.07% and the 13F portfolio by 13.88%. Shares averaged $33.83 during the fourth quarter; the stock is modestly undervalued based on its price-to-GF-Value ratio of 0.90 as of Wednesday.
The firm also gained a holding of 178,077 shares in Brookfield Asset Management Ltd. (BAM, Financial). The position occupies 4.23% of the equity portfolio. Shares averaged $30.09 during the fourth quarter.
On Dec. 9, 2022, Toronto-based Brookfield Corp. (BN, Financial) said that it completed its public listing and distribution of a 25% interest in the asset management business. The corporation changed its company name from Brookfield Asset Management Inc. to Brookfield Corp. while the asset management spinoff took the name Brookfield Asset Management.
Brookfield’s business segments include real estate, infrastructure, renewable power and private equity. For the fiscal year ending December 2021, the company reported $75.7 billion in total revenue, including $46.3 billion in private equity revenue, $11.9 billion in infrastructure sales and $9.9 billion in real estate revenue.
The corporation has a GF Score of 89 out of 100 based on a growth rank of 10 out of 10, a profitability rank of 9 out of 10, a GF Value rank of 7 out of 10, a momentum rank of 5 out of 10 and a financial strength rank of 3 out of 10.
Brookfield’s profitability ranks 9 out of 10 on several positive investing signs, which include a four-star business predictability rank and a high Piotroski F-score of 7 out of 9.
Other gurus with holdings in Brookfield include Chuck Akre (Trades, Portfolio)’s Akre Capital Management and Tom Gayner (Trades, Portfolio)’s Markel Gayner Asset Management Corp.
Micron Technology
Pabrai added 37,000 shares of Micron Technology (MU, Financial), boosting the position by 2.03% and its equity portfolio by 1.53%.
Shares of Micron Technology averaged $54.72 during the fourth quarter; the stock is fairly valued based on its price-to-GF-Value ratio of 0.96 as of Wednesday.
The Boise, Idaho-based dynamic random access memory chipmaker has a GF Score of 87 out of 100 based on a rank of 8 out of 10 for profitability, growth and financial strength despite GF Value and momentum ranking just between 5 and 6 out of 10.
Micron’s financial strength ranks 8 out of 10 on several positive investing signs, which include a high Altman Z-score of 4.12 and a Beneish M-score that suggests little or no earnings manipulation.
Other gurus with holdings in Micron Technology include PRIMECAP Management (Trades, Portfolio), Li Lu (Trades, Portfolio)’s Himalaya Capital Management and Andreas Halvorsen (Trades, Portfolio)’s Viking Global LP.
Seritage Growth Properties
Pabrai owns 3,375 shares of Seritage Growth Properties (SRG, Financial), giving the position 0.03% of equity portfolio space. No changes were made to the holding during the quarter.
Shares averaged $11.08 during the fourth quarter; the stock is modestly overvalued based on its price-to-GF-Value ratio of 1.18 as of Wednesday.
The New York-based retail REIT has a GF Score of 56 out of 100: Although the company has a momentum rank of 9 out of 10, Seritage has a rank of 3 out of 10 for financial strength and GF Value and a rank of 2 out of 10 for profitability and growth.
Seritage’s warning signs include a debt-to-equity ratio that underperforms over 82% of global competitors and a gross profit margin that has declined by approximately 17.9% per year on average over the past five years and is underperforming more than half of global REITs.
Other gurus with holdings in Seritage Growth Properties include Hotchkis & Wiley, Guy Spier (Trades, Portfolio)’s Aquamarine Capital Management and Mario Gabelli (Trades, Portfolio)’s GAMCO Investors.
