Tracking Mohnish Pabrai's Portfolio - Q1 2018 Update

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Includes: AER, FCAU, GOOG, LUV, RACE
by: John Vincent
Summary

Mohnish Pabrai’s 13F portfolio value decreased from $386M to $317M this quarter.

The portfolio has just two stocks currently: Fiat Chrysler and Ferrari.

Pabrai Funds dropped Alphabet Inc., Southwest Airlines, and AerCap Holdings during the quarter.

This article is part of a series that provides an ongoing analysis of the changes made to Mohnish Pabrai’s 13F stock portfolio on a quarterly basis. It is based on Pabrai’s regulatory 13F Form filed on 05/14/2018. Please visit our Tracking Mohnish Pabrai's Portfolio series for an idea on how his holdings have progressed over the years and our previous update highlighting the fund’s moves during Q4 2017.

Pabrai’s 13F portfolio value decreased ~18% from $386M to $317M this quarter. The portfolio now has just two positions: Fiat Chrysler Automobiles (NYSE:FCAU) and Ferrari N.V. (NYSE:RACE).

In June 2017, Pabrai indicated that he is finding nothing to buy in the US. Currently, his portfolio companies are all domiciled outside the US – this is compared to less than 25% previously. To learn more about Mohnish Pabrai’s distinct investing style and philosophy, check out his book “The Dhandho Investor: The Low-Risk Value Method to High Returns” and other works. Also, his views on investing in India are discussed in a Bloomberg Quint (Alpha Moghuls) interview last December.

Stake Disposals:

Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL): GOOG was a large ~12% of the 13F portfolio position established in Q4 2014 at prices between $495 and $577. Last quarter saw the position reduced by about one-third at prices between $952 and $1077 and the disposal this quarter was at prices between $1000 and $1176. The stock currently trades at $1100. Pabrai realized huge long-term gains.

AerCap Holdings NV (NYSE:AER): AER was a fairly large ~11% of the portfolio stake established in Q2 2016 at prices between $31.50 and $42.50. The four quarters through Q3 2017 saw a two-thirds increase at prices between $38.50 and $51.50. There was an about turn last quarter: ~23% sold at prices between $49.75 and $53. The elimination this quarter was at prices between $49 and $55. The stock is now at $55.47.

Southwest Airlines (NYSE:LUV): LUV was a ~5% of the portfolio stake established in Q3 2016 at a cost basis in the mid-30s. Q4 2016 saw a ~40% reduction at prices between $38 and $51 and the stock was sold out this quarter at prices between $55 and $66. The stock currently trades at $52.20.

Kept Steady:

Fiat Chrysler Automobiles: FCAU stake is at ~85% of the 13F portfolio. He first started buying Fiat in 2012 when the market cap was just $5B. The stock currently trades at $22.55 compared to his cost basis of ~$4.

Note: Fiat Chrysler Automobiles spun-off Ferrari in January 2016. The prices quoted above are adjusted for that spinoff. First day of trading post spinoff was Jan 4, 2016. FCAU shares closed at $13.99 EOY 2015 and started trading at ~$9 post spinoff.

Ferrari NV: The ~15% of the portfolio Ferrari stake was established as a result of the spinoff of Ferrari from Fiat Chrysler Automobiles. The Ferrari portion accounted for slightly more than one-third of the combined business. Trading opened Jan 4, 2016 at ~$47 per share and currently trades at ~$135. 2016 had seen a ~70% stake reduction at prices between $40 and $59.

The spreadsheet below highlights Pabrai’s 13F stock holdings as of Q1 2018:

Mohnish Pabrai - Pabrai Funds - Q1 2018 13F Report

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.