Francisco Garcia Parames (Trades, Portfolio), founder and leader of Spanish investment firm Cobas Asset Management, disclosed his fourth-quarter equity portfolio earlier this month.
Prior to founding Cobas in 2017, the guru built his reputation managing the Bestinfond (Trades, Portfolio) portfolio at Bestinver. His 24-year track record near the top of performance rankings made him one of Europe’s top asset managers. As a self-taught follower of Warren Buffett (Trades, Portfolio)’s investment approach, Parames’ style is based on strictly applying the principles of value investing within the framework of the Austrian business cycle theory.
Keeping these criteria in mind, the investor’s portfolio updates show the firm established three new positions during the three months ended Dec. 31, as well as sold out of three stocks and added to or trimmed a slew of other existing holdings. The most notable trades for the period included a new investment in Porsche Automobil Holding SE (XTER:PAH3, Financial), reductions of the Subsea 7 SA (OSL:SUBC, Financial) and Affiliated Managers Group Inc. (AMG, Financial) positions and the divestment of Energy Transfer LP (ET ) and Sacyr SA (XMAD:SCYR, Financial).
Investors should be aware portfolio updates for mutual funds do not necessarily provide a complete picture of a guru’s holdings. The data is sourced from the quarterly updates on the website of the fund(s) in question. This usually consists of long equity positions in U.S. and foreign stocks. All numbers are as of the quarter’s end only; it is possible the guru may have already made changes to the positions after the quarter ended. However, even this limited data can provide valuable information.
Porsche
The guru invested in 152,205 shares of Porsche (XTER:PAH3, Financial), allocating 1.11% of the equity portfolio to the position. The stock traded for an average price of 56.74 euros ($61.57) per share during the quarter.
He previously sold out of the stock in the third quarter of 2021.
The German luxury sports car manufacturer has a market cap of 17.66 billion euros; its shares closed at 57.66 euros on Thursday with a price-earnings ratio of 3.36 and a price-book ratio of 0.33.
While there is not enough data to generate a GF Value Line, the Peter Lynch chart suggests the stock is undervalued.
Further, the GF Score of 61 out of 100 indicates the company has poor future performance potential. While Porsche received high ratings for financial strength and GF Value, the momentum rank was more moderate and profitability was low. It did not get a rating for growth, however.
Of the gurus invested in Porsche, Parames has the largest holding with 0.05% of its outstanding shares. The iShares MSCI ACWI ex. U.S. ETF also has a position in the stock.
Subsea 7
The investor curbed his Subsea 7 (OSL:SUBC, Financial) holding by 45.23%, selling 611,053 shares. The transaction had an impact of -0.80% on the equity portfolio. Shares traded for an average price of 105.42 Norwegian krone ($10.41) each during the quarter.
Parames now holds 740,035 shares total, accounting for 1.13% of the equity portfolio. GuruFocus estimates he has gained 15.86% on the investment so far.
The subsea engineering and construction company headquartered in the U.K., which services the offshore energy industry, has a market cap of 35.22 billion krone; its shares closed around 121.35 krone on Thursday with a price-earnings ratio of 129.65, a price-book ratio of 0.85 and a price-sales ratio of 0.73.
According to the GF Value Line, which is based on historical ratios, past financial performance and analysts’ future earnings projections, the stock is modestly overvalued currently.
The GF Score of 80 indicates the company is likely to have average performance going forward on the back of high ratings for profitability and financial strength and middling marks for growth, GF Value and momentum.
With 0.93% of its outstanding shares, the Third Avenue Value Fund (Trades, Portfolio) is Subsea’s largest guru shareholder.
Affiliated Managers Group
Parames reduced his holding of Affiliated Managers Group (AMG, Financial) by 32.37%, selling 41,087 shares. The transaction impacted the equity portfolio by -0.72%. During the quarter, the stock traded for an average per-share price of $141.47.
He now holds 85,845 shares total, which occupy 1.77% of the equity portfolio. GuruFocus data shows the investor has gained an estimated 64.54% on the investment so far.
More commonly known as AMG, the West Palm Beach, Florida-based investment management company has a $6.69 billion market cap; its shares were trading around $177.58 on Friday with a price-earnings ratio of 13.56, a price-book ratio of 2.58 and a price-sales ratio of 3.20.
Based on the GF Value Line, the stock appears to be significantly overvalued currently.
With a GF Score of 74, the company is likely to average performance going forward, driven by high ratings for profitability and momentum, middling marks for growth and financial strength and a low GF Value rank.
Mason Hawkins (Trades, Portfolio) has the largest stake in AMG with 4.30% of its outstanding shares. Other top guru investors include John Rogers (Trades, Portfolio), Ray Dalio (Trades, Portfolio)’s Bridgewater Associates, Jim Simons (Trades, Portfolio)’ Renaissance Technologies, Hotchkis & Wiley, Steven Cohen (Trades, Portfolio) and Joel Greenblatt (Trades, Portfolio).
Energy Transfer
Impacting the equity portfolio by -1.63%, the guru dumped all 941,853 shares of Energy Transfer (ET, Financial). The stock traded for an average price of $12 per share during the quarter.
GuruFocus found Parames gained around 44.69% on the investment over its lifetime.
The midstream energy company, which is headquartered in Dallas, has a $41.31 billion market cap; its shares were trading around $13.37 on Friday with a price-earnings ratio of 9.98, a price-book ratio of 1.26 and a price-sales ratio of 0.46.
The GF Value Line suggests the stock is fairly valued currently.
However, the GF Score of 75 means the company is likely to have average performance going forward. Although it raked in high ratings for profitability and momentum, the other three criteria were more moderate.
Of the gurus invested in Energy Transfer, David Abrams (Trades, Portfolio) has the largest stake with 0.71% of its outstanding shares. David Tepper (Trades, Portfolio), George Soros (Trades, Portfolio), Bruce Berkowitz (Trades, Portfolio) and Murray Stahl (Trades, Portfolio), among others, also have positions in the stock.
Sacyr
With an impact of -0.83% on the equity portfolio, the investor exited his 2.39 million-share stake in Sacyr (XMAD:SCYR, Financial). During the quarter, shares traded for an average price of 2.49 euros each.
GuruFocus says Parames gained roughly 6.22% on the investment, which was established in the fourth quarter of 2021.
The Spanish construction company has a market cap of 1.83 billion euros; its shares closed at 2.86 euros on Thursday with a price-book ratio of 2.93 and a price-sales ratio of 0.33.
According to the GF Value Line, the stock is significantly overvalued currently.
The company is expected to have average performance going forward based on its GF Score of 74. Despite having high ratings for momentum and growth, the profitability rank was more moderate and the GF Value and financial strength were low.
No gurus are currently invested in the stock.
Additional trades and portfolio composition
During the quarter, Parames also established positions in Fresenius Medical Care AG & Co. KGaA (XTER:FME, Financial) and Continental AG (XTER:CON, Financial) and sold out of Petrofac Ltd. (LSE:PFC, Financial).
Cobas’ $704 million equity portfolio, which is composed of 67 stocks, is most heavily invested in the industrials, energy and consumer cyclical sectors.
