Mohnish Pabrai’s 5 Biggest Investments in 10 Years

1. Stellantis N.V. (NYSE:STLA)

Value of Pabrai Investment Funds’ 13F Position: $269 million (Q1 2018)

Stock Performance Since Q1 2018: -10.3%

Number of Hedge Fund Shareholders (Q1 2023): 27

Topping the list of Pabrai’s biggest investments in 10 years is Stellantis N.V. (NYSE:STLA), which was formed in 2021 through a merger between Fiat Chrysler and Peugeot. The former company, which traded under the ticker FCAU, was Pabrai’s top stock pick throughout much of 2014-2019, with his holding in the company peaking at $269 million in value in the first quarter of 2018, just under $100 million more than his next largest investment over the past decade.

Stellantis N.V. (NYSE:STLA) has been highly successful since its 2021 formation, growing revenue by 15% during that time. The European automaker’s earnings have shot up even faster, growing by 25%, which has in turn allowed the company to raise its dividend payments by 29% in the last year alone, pushing the stock’s yield to 8%. Despite the outperformance, the market has remained fairly tepid towards the company, which is making its valuation very attractive, as STLA shares trade at just over 3x earnings right now.

Miller Value Partners Income Strategy shared some of the reasons behind why it took a long position in  Stellantis N.V. (NYSE:STLA) in its Q2 2023 investor letter:

“We initiated a starter position in Stellantis N.V. (NYSE:STLA), which makes Jeep, Dodge and Fiat cars. The company has a nearly 8% dividend yield with enough net cash (cash minus debt) on the balance sheet to cover the dividend for almost five years. The company trades at 1.7x operating profits, which means the market is already expecting a likely drop in cash flow. Still, the shares appear to be worth meaningfully more than where they trade, and management is heavily aligned with stockholders with a 14% stake. They share our view that the valuation is compelling, as the company plans on repurchasing ~3% of shares outstanding this year.”

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