Top buys of the 1st quarter of the Tw
Tweety Browne (Trades, Portfolio) The Global Value Fund recently submitted its portfolio update for the first quarter of 2022 ended March 31 to the Securities and Exchanges Commission on Form NPORT-P.
The fund operates as part of New York-based value investment firm Tweedy, Browne Co. LLC. The portfolio managers seek to invest in a broad range of companies in developing countries, with an emphasis on undervalued securities, in order to seek long-term capital growth. Although it invests primarily in non-US marketable stocks, the fund will hold interests in some US-listed securities when the portfolio managers see a sufficiently attractive growth opportunity.
Based on the most recent NPORT-P filing, the fund’s top new purchases during the quarter were Ionis Pharmaceuticals Inc. (IONS, Finance), Sumitomo Heavy Industries Ltd (TSE:6302, Finance), SKF AB (OSTO: SKF A, Finance), Kemira Oyj (OHEL: KEMIRA, Financial) and Iveco Group NV (MIL:IVG, finance).
Investors should be aware that NPORT-P reports, like 13F reports, do not provide the public with a complete picture of a guru’s holdings. They are filed by certain mutual funds after each quarter-end and collect a variety of information about the fund for the SEC, but generally most of the information released relates to long stock positions. Unlike 13Fs, they require some disclosure for long equity positions in foreign stocks. Despite their limitations, these documents can still provide valuable information. Visit the SEC website for more information on the NPORT-P form here.
The fund established a holding of 1,819,506 shares in Ionis Pharmaceuticals (IONS, Financial), giving the stock a 1.13% weighting in the stock portfolio. During the quarter, shares traded at an average price of $32.73 per share.
Ionis is a California-based biotechnology company researching and developing RNA-targeted therapeutics. Its antisense therapies are designed to interact directly with RNA to disrupt disease processes.
On April 19, Ionis shares were trading at around $41.25, giving it a market cap of $5.83 billion. According to the GF Value Chart, the stock is slightly undervalued.
The company has a GuruFocus financial strength rating of 5 out of 10 and a profitability rating of 4 out of 10. Red flags include assets growing faster than revenue and weighted average cost of capital exceeding return on invested capital, while positive signs include a three – Annual sales per share growth rate of 8.7% and a three-year Ebitda per share growth rate of 36%.
Sumitomo Heavy Industries
The fund also bought 1,284,760 shares of Sumitomo Heavy Industries (TSE:6302, Financial), giving the stock a 0.50% equity portfolio weight at an average share price for the quarter of 2,884.32 Japanese yen ($22.37).
Sumitomo is a Japanese manufacturer of heavy industrial machinery, automatic weapons, ships, bridges, steel structures, environmental protection equipment (e.g. recycling equipment) and more.
As of April 19, Sumitomo’s shares were trading at around 2,645 yen, giving it a market capitalization of 324.03 billion yen. According to the GF Value Chart, the stock is slightly undervalued.
The company has a GuruFocus financial strength rating of 6 out of 10 and a profitability rating of 8 out of 10. Red flags include declining operating and gross margins, while positive signs include price-to-earnings, price-to-book and price-to-sales ratios close to 52 week lows.
The fund bought 1,704,935 shares of SKF (OSTO: SKF A, Financial), giving the stock a 0.47% weighting in the stock portfolio. During the quarter, shares changed hands at an average price of 201.61 Swedish kronor ($21.13).
SKF, short for Svenska Kullagerfabriken, is a Swedish manufacturer of bearings, seals, lubrication and lubrication systems, mechatronics, power transmission products and related services.
On April 19, SKF’s shares were trading for around 170 kronor with a market capitalization of 70.13 billion kroner. According to the GF Value Chart, the stock is slightly undervalued.
The company has a GuruFocus financial strength rating of 6 out of 10 and a profitability rating of 8 out of 10. Warning signs include declining sales per share and an Altman Z-Score in the gray area, while positive signs include consistently higher than WACC returns, which indicates added value.
The fund initiated an investment of 1,569,538 shares in Kemira (OHEL: KEMIRA, Financial), giving the stock a 0.35% weighting in the stock portfolio at the quarterly average price of €12.56 ($13.55) per share.
Headquartered in Finland, Kemira is a global supplier of chemicals to companies in water-intensive industries. It operates through two segments: Pulp/Paper Products and Industry/Water.
On April 19, Kemira’s shares were trading for around €12 with a market capitalization of €1.84 billion. According to the GF Value Chart, the stock is slightly undervalued.
The company has a GuruFocus financial strength rating of 3 out of 10 and a profitability rating of 7 out of 10. Red flags include a low cash-to-debt ratio of 0.14 and a distressed Altman Z-score of 1.98, while positive signs typically include ROIC exceeding WACC.
The Fund acquired an interest worth 2,943,779 shares in Iveco Group (MIL:IVG, Financial), giving it a 0.32% weighting in the stock portfolio. In the quarter, the share cost an average of EUR 8.33 per share.
Iveco is an Italian automobile manufacturer that produces commercial vehicles and powertrain technologies and mass transit, defense, construction and fire-fighting vehicles.
On April 19, Iveco shares were trading at around €5.96, with a market capitalization of €1.62 billion. The stock is down 41% since its IPO on Jan. 3.
The company has a GuruFocus financial strength rating of 3 out of 10 and a profitability rating of 2 out of 10. There is not much publicly available financial information about the company yet as it only went public earlier this year. The cash debt ratio is low at 0.08.
At the end of the quarter, the fund’s latest NPORT-P reported long positions in 95 common stocks totaling $5.96 billion. Quarterly sales were 5%.
The largest holding was Nestle SA (XSWX:NESN) with 5.55% of the stock portfolio, followed by Diageo PLC (LSE:DGE) with 4.82% and CNH Industrial NV (CNHI) with 3.91%.
In terms of sector weighting, the company was most heavily invested in defensive consumer, financial services and industrials stocks.