Pabrai’s Top Holding Seritage Sours in 2021

Mohnish Pabrai (Trades, Portfolio), managing partner of Pabrai Investment Funds, disclosed this week that his firm slashed more than a quarter of its stake in Seritage Growth Properties (SRG, Financial) according to GuruFocus Real-Time Picks, a Premium feature.

Pabrai invests primarily in smaller-cap companies that are out of favor and undervalued. The guru’s U.S.-based portfolio represents a fraction of his firm’s total assets under management. Pabrai said in a 2019 interview with GuruFocus that he had moved the majority of the assets to other countries, where he was finding more attractive investments.

As of the latest portfolio filing, Pabrai’s U.S.-based equity portfolio contains three stocks: Seritage, Micron Technology Inc. (

MU, Financial) and Alibaba Group Holding Ltd. (BABA, Financial).

Seritage

Pabrai Investment Funds sold 1,277,108 shares of Seritage (

SRG, Financial), slicing 26.98% of the position and 9.06% of its equity portfolio.

Shares of Seritage traded around $13.53, down approximately 12.70% over the past 12 months. The stock is modestly undervalued based on Tuesday’s price-to-GF Value ratio of 0.77.

GuruFocus ranks the New York-based REIT’s financial strength 2 out of 10 on several warning signs, which include a low Piotroski F-score of 2, a weak Altman Z-score of -0.14 and a debt-to-equity ratio that underperforms over 90% of global competitors.

Micron Technology

The firm owns 1,579,150 shares of Micron Technology (

MU, Financial), dedicating 58.76% of its equity portfolio to the stake.

Shares of Micron traded around $93.91, up approximately 21.53% over the past 12 months. The stock is modestly overvalued based on Tuesday’s price-to-GF Value ratio of 1.27.

GuruFocus ranks the Boise, Idaho-based semiconductor company’s profitability 9 out of 10 on several positive investing signs, which include a 4.5-star business predictability rank, a high Piotroski F-score of 9 and profit margins that outperform more than 89% of global competitors.

Other gurus with holdings in Micron Technology include

PRIMECAP Management (Trades, Portfolio) and
Li Lu (Trades, Portfolio)’s Himalaya Capital Management.

Alibaba

The firm owns 57,347 shares of Alibaba (

BABA, Financial), allocating 4.45% of its equity portfolio to the holding.

Shares of Alibaba traded around $132.31, down approximately 45.68% over the past 12 months. The stock is significantly undervalued based on Tuesday’s price-to-GF Value ratio of 0.35.