Joho Capital, the firm founded by Robert Karr (Trades, Portfolio), disclosed in a regulatory filing that its top trades during the fourth quarter of 2022 included the closure of its holding in Alibaba Group Holding Ltd. (BABA, Financial), a reduction to its position in Livent Corp. (LTHM, Financial), and new positions in Quanta Services Inc. (PWR, Financial), SolarEdge Technologies Inc. (SEDG, Financial), Shoals Technology Group Inc. (SHLS, Financial) and Array Technologies Inc. (ARRY, Financial).
Prior to founding the New York-based firm, Karr worked for the late Julian Robertson at Tiger Management (Trades, Portfolio), where he primarily focused on Asian securities. Joho concentrates its portfolio investments in a few securities and further does in-depth research on each holding.
As of December 2022, the firm’s $309 million 13F equity portfolio contains 15 stocks with a quarterly turnover ratio of 28%. The top four sectors in terms of weight are technology, industrials, consumer cyclical and consumer defensive, representing 84.40%, 7.80%, 3.39% and 3.33% of the equity portfolio.
Investors should be aware that 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.
Alibaba
Joho sold all 479,571 shares of Alibaba (BABA, Financial), chopping 10.73% of its equity portfolio.
Shares of Alibaba averaged $78.85 during the fourth quarter; the stock is significantly undervalued based on its price-to-GF Value ratio of 0.30 as of Friday.
The Hangzhou, Zhejiang-based e-commerce giant has a GF Score of 91 out of 100 based on a growth rank of 10 out of 10, a profitability rank of 9 out of 10, a financial strength rank of 7 out of 10, a momentum rank of 6 out of 10 and a GF Value rank of 4 out of 10.
Gurus with holdings in Alibaba include David Herro (Trades, Portfolio)’s Oakmark International Fund, PRIMECAP Management (Trades, Portfolio) and Dodge & Cox.
Livent
The firm sold 2,894,500 shares of Livent (LTHM, Financial), discarding 97.18% of the position and 24.81% of its equity portfolio. Shares averaged $27.37 during the fourth quarter.
GuruFocus’ GF Value Line labeled the Philadelphia-based lithium company a possible value trap based on its low price-to-GF Value ratio of 0.63 as of Friday.
Livent has a GF Score of 82 out of 100 based on a momentum rank of 10 out of 10, a GF Value rank of 8 out of 10, a profitability rank of 7 out of 10, a financial strength rank of 6 out of 10 and a growth rank of 5 out of 10.
Quanta Services
Joho purchased 169,193 shares of Quanta Services (PWR, Financial), giving the position 7.80% equity portfolio weight. Shares averaged $142 during the fourth quarter; the stock is modestly overvalued based on its price-to-GF Value ratio of 1.17 as of Friday.
The Houston-based energy infrastructure company has a GF Score of 87 out of 100 based on a growth rank of 10 out of 10, a profitability rank of 8 out of 10, a GF Value rank of 3 out of 10 and a rank of 6 out of 10 for momentum and financial strength.
Quanta’s profitability ranks 8 out of 10 on several positive investing signs, which include a four-star business predictability rank and an operating margin that has increased by approximately 3.10% per year on average over the past five years.
SolarEdge Technologies
Joho invested in 85,000 shares of SolarEdge Technologies (SEDG, Financial), giving the holding 7.79% equity portfolio weight. Shares averaged $265.36 during the fourth quarter; the stock is a possible value trap based on its low price-to-GF Value ratio of 0.68 as of Friday.
The Israeli solar inverter system company has a GF Score of 93 out of 100 based on a rank of 9 out of 10 for momentum and growth, a GF Value rank of 10 out of 10, a profitability rank of 8 out of 10 and a financial strength rank of 7 out of 10.
Shoals Technologies
Joho invested in 735,488 shares of Shoals Technologies (SHLS, Financial), giving the position 5.87% equity portfolio weight. Shares averaged $24.14 during the fourth quarter.
The Portland, Tennessee-based company provides electrical balance of system solutions for solar energy projects. The company’s financial strength ranks 4 out of 10 on several warning signs, which include a low Piotroski F-score of 3 out of 9 and an interest coverage ratio that underperforms more than 90% of global competitors.
Despite low ranks for financial strength and profitability, Shoals Technologies does not have enough data to compute ranks for growth, GF Value and momentum and thus, the GF Score of 26 out of 100 may give an incomplete picture of the company's potential.
Array Technologies
The firm invested in 725,000 shares of Array Technologies (ARRY, Financial), giving the position 4.53% equity portfolio weight. Shares averaged $19 during the fourth quarter.
The Albuquerque, New Mexico-based company manufactures ground-mounting systems used in solar energy projects. Although the company’s financial strength and profitability rank just 3 out of 10, Array Technologies does not have enough data to compute ranks for growth, GF Value and momentum and thus, the GF Score of 20 out of 100 may give an incomplete picture of its potential.
