By: Manisha Sethi Sep. 28, 2018

On May 11, the Banco BTG Pactual S.A. SEC 13F filing for the first quarter of 2018 showed a portfolio value of $334.62 million. The top 10 holdings comprised 73.59% of the portfolio, with 98,75,718 shares of the new buy, ESTRE Ambiental Inc. (ESTR) amounting to $98.65 million. The investor reported a total of 61 holdings in the recent quarter including 24 new investments, and the market value of the portfolio increased by 86.88% over the previous quarter. Banco BTG Pactual SA, formerly known as Banco UBS Pactual SA, is a Brazilian bank based in Rio De Janeiro, primarily engaged in investment banking and investment management activities. Together with its subsidiaries, the bank offers a range of financial services, including investment banking, corporate lending, brokerage services, asset management, wealth management, commercial and consumer banking services, merchant banking, and real estate investments.

Raltin found that 30.58% or 37 of Banco BTG Pactual’s new stock purchases between Q1 2014 & Q1 2018 have outperformed the S&P 500 by more than 20%. Only 20 of a total of 121 stocks (about 16.5% of the total) underperformed the S&P 500 by more than 20%. A detailed background on Raltin’s methodology is given here. The table below classifies Banco BTG Pactual’s stock in various S&P outperformance categories.

S&P outperformance categoryNumber of New Stock PurchasesTotal New Purchases (%)
10 to 20%1814.88
0 to 10%1512.40
-10 to 0%1915.70
-20 to -10%129.92
Total stocks121


Banco BTG Pactual made new investments in 24 stocks in the recent quarter, across diverse sectors. Of these, ESTRE Ambiental Inc. (ESTR) and CRH Plc (CRH) comprise 29.48% and 1.87% of the portfolio value, respectively. The following table lists the investor’s top 20 new purchases for Q1 2018.

StocksNumber of sharesHolding Value ($1,000)
ESTRE Ambiental Inc. (ESTR)9,875,71898,658
CRH Plc (CRH)183,6106,246
Wells Fargo & Co (WFC)116,8486,124
Validus Holdings Ltd. (VR)90,0006,071
Companhia de Saneamento Basico do Estado de Sao Paulo (SBS)458,2004,852
Harbinger Group Inc. (HRG)266,4894,394
XL Group Ltd. (XL)73,0004,034
PHH Corp. (PHH)380,0003,975
AmTrust Financial Services, Inc. (AFSI)316,0003,890
Cavium, Inc. (CAVM)47,0003,731
Petroleo Brasileiro SA Petrobras ADR210,7532,980
Chicago Bridge & Iron Co. NV (CBI)190,0002,736
Aetna, Inc. (AET)15,5002,620
Arcos Dorados Holdings, Inc. (ARCO)254,7472,330
Sociedad Quimica y Minera de Chile S.A. Class A ADR (SQM)46,3482,278
Fibria Celulose S.A. (FBR)104,4072,036
Blue Buffalo Pet Products, Inc. (BUFF)40,0001,592
Ultrapar Participacoes, S.A. (UGP)52,5251,136
BBVA Banco Frances S.A. (BFR)19,961455
TIM Participacoes S.A (TSU)15,840343
Vale S.A. (VALE)17,694225
Compania de Minas Buenaventura S.A. (BVN)10,200155
Pfizer, Inc. (PFE)11,907155
Pandora Media, Inc. (P)12,24062

The following table shows the investor’s portfolio value for five quarters starting from Q1 2017 to Q1 2016, along with the top 3 holdings in each quarter that outperformed the S&P 500.

PeriodTotal portfolio value ($Mn)Top holdings (ticker, % of IRR difference from S&P 500)
Q1 2017304.17Shopify Inc. (SHOP, 71.62), Grupo Supervielle S.A. (SUPV, 67.09), Empresa Distribuidora y Comercializadora Norte S.A. (EDN, 53.88)
Q4 2016191.48Alibaba Group Holding Limited (BABA, 77.29), PETROBRAS ENERGIA PARTICIPACIO (PZE, 74.5), GrubHub Inc. (GRUB, 71.75)
Q3 2016212.43Pampa Energia S.A. (PAM, 85.11), Grupo Financiero Galicia S.A. (GGAL, 49.7), Banco Macro S.A. (BMA, 33.94)
Q2 201693.63FedEx Corp. (FDX, 27.76), Sociedad Quimica y Minera de Chile S.A. (SQM, 18.15), News Corp (NWS, 5.82)
Q1 2016Pinnacle Entertainment, Inc. New (PNK, 93.84), Regions Financial Corp. (RF, 70.39), Bank of America Corp. (BAC, 59.78)

The above table clearly shows that new selections in various quarters like Shopify Inc (SHOP), Alibaba Group Holding (BABA), Fedex Corp (FDX), and Pinnacle Entertainment Inc. New (PNK) among others have successfully ousted the index.