Charles de Vaulx

Charles de Vaulx Premium Guru

Last Update: 03-01-2017
Related: IVA International Fund

Number of Stocks: 83
Number of New Stocks: 3

Total Value: $3,918 Mil
Q/Q Turnover: 7%

Countries: USA KOR FRA FIN JPN HKG NOR TWN CHE BEL GBR MYS DEU
Details: Top Buys | Top Sales | Top Holdings  Embed:

Charles de Vaulx Watch

  • FPA Capital Sells DeVry, Western Digital, Helmerich & Payne

    FPA Capital Fund (Trades, Portfolio) manages a portfolio composed of 23 stocks with a total value of $500 million. The company seeks long-term growth through investing primarily in carefully selected common stocks and select fixed income securities. During the first quarter it sold shares in the following stocks:


    The guru reduced its shares in DeVry Education Group Inc. (DV) by 34.83% and the transaction had an impact of -1.79% on the portfolio.

      


  • Charles de Vaulx Comments on Gold

    Gold (GLD) was up 8.4% this quarter and contributed 0.5% to performance. As of March 31, 2017, our gold exposure was 5.8%. Considering the many unknowns and fragilities in this investment environment, we remain happy to hold a modest yet not insignificant allocation to gold in the form of gold bullion.

    From Charles de Vaulx (Trades, Portfolio)'s IVA Worldwide Fund first quarter 2017 commentary.   


  • Charles de Vaulx's IVA Worldwide Fund First Quarter 2017 Quarterly Review

    The IVA Worldwide Fund Class A (NAV) ("the Fund") ended the quarter on March 31, 2017 with a return of 4.72% versus the MSCI All Country World Index (Net) ("Index") return of 6.91% for the same period.

      


  • IVA International Fund Gains 5 New Holdings in 4th Quarter

    The IVA International Fund (Trades, Portfolio) gained five new holdings during the fourth quarter of 2016. They are Beyerische Motoren Werke AG (XTER:BMW), Airbus Group AG (XPAR:AIR), Grupo Comercial Chedraui SAB de CV (MEX:CHDRAUIB), Doshisha Co. Ltd. (TSE:7483) and Bollore SA (XPAR:BOLNV).


    Established in October 2008, the fund is managed by Charles de Vaulx (Trades, Portfolio) and Charles de Lardemelle of International Value Advisers LLC. They also manage the IVA Worldwide Fund. The portfolio managers invest in various securities and asset classes from international markets in order to achieve long-term growth of capital. The fund’s portfolio consists of 87 stocks and is valued at around $2.06 million.

      


  • IVA Funds 2016 Year in Review

    Despite a few bouts of market volatility (the first six weeks of the year as well as briefly after the Brexit vote), 2016 was most notable for extraordinary political developments which have the potential to shape markets for years to come. Although the possibility of the UK voting to leave the EU had been on investors’ minds for months, most everyone was surprised by the outcome of the referendum on June 23 and markets recoiled. They may have quickly recovered, but the magnitude of the vote’s ultimate financial and political consequences are still unknown. And then on November 8, Donald Trump became President-Elect of the United States. This stunning turn of events was followed by a less dramatic, but still crucial, vote of ‘No’ in an Italian referendum on constitutional reform, forcing Prime Minister Matteo Renzi to resign. These events indicate a rising tide of populism in many countries (the U.K., Continental Europe and the U.S.) as well as growing resentment of both rising wealth and income inequalities. A global move towards populism could have significant implications, including a revival of trade tensions and protectionism and ultimately a possible break-up of the Eurozone. In addition, with largely ineffective economic policies followed since the Great Financial Crisis, there is a growing chorus of voices arguing for a shift from monetary policy to fiscal spending and to policies that favor labor over owners of capital. These shifts could result in lower corporate profits and rising interest rates, which have the potential to act as significant headwinds to both bonds and equities. Since the U.S. election we have already seen bonds struck with the reality that inflation and higher interest rates will most likely be a byproduct of any fiscal stimulus package initiated by Trump and a Republican-controlled Congress. Equity valuations remain at elevated levels, but the U.S. Federal Reserve began raising rates in December (and strongly suggested there would be additional rate increases in 2017) and the European Central Bank and the Bank of Japan may at some point signal an end to their bond-buying programs. Having floated on ultra-low interest rates for so long, equities could face a difficult transition as rates normalize and prices begin to align with fundamentals. In addition to shifting political tides and their unknown consequences, we continue to have concerns over unprecedented credit growth in China (especially in regards to struggling State-Owned Enterprises). There is also the possibility that the U.S. dollar will appreciate further against multiple currencies in the years ahead, hurting on one hand the many U.S. companies that derive a significant portion of their earnings overseas but also the performance in U.S. dollar terms of many non-U.S. stocks if one were to be unhedged from a currency standpoint. The many emerging market companies that have borrowed extensively in USD would suffer as well. We also continue to worry about the sustainability of the often high profit margins of companies in light of the many disruptions facing their industries. The cautious positioning of our portfolio is in large part a result of all of these considerations.

      


  • Charles de Vaulx Invests in 6 New Holdings

    Charles de Vaulx (Trades, Portfolio), chief investment officer and portfolio manager at International Value Advisers LLC, made half a dozen new buys in the third quarter.


    The guru purchased 130,628 shares of Baidu Inc. (NASDAQ:BIDU), a Chinese Web services company headquartered in Beijing, for an average price of $173.03 per share. The transaction had a 0.55% impact on the portfolio.

      


  • IVA Worldwide Fund 3rd Quarter Commentary

    The IVA Worldwide Fund Class A (NAV) (“the Fund”) ended the quarter on September 30, 2016 with a return of 3.73% versus the MSCI All Country World Index (Net) (“Index”) return of 5.30% bringing YTD performance to 5.70% versus the Index return of 6.60% for the same period.


    Despite bouts of volatility throughout the quarter, primarily related to anxieties over Central Bank actions and inactions, the markets were relatively quiet. The last few weeks were an exception, when Deutsche Bank concerns hit a crescendo, dragging down European bank shares and igniting fears about their overall health. We have expressed these same concerns for some time now and have therefore largely avoided European banks in our portfolio. Our cautious positioning continues to reflect our other concerns, including large credit excesses in China and prolonged Central Bank manipulations. We will expand upon this later on in our update.

      


  • IVA Funds Comments on Emerson

    Well, Deere (NYSE:DE) is a much finer business. They are world-class. It's much more oligopolistic. The returns of capital over a full cycle dwarf I believe what they are with other fertilizer companies. Yes, the answer is that we've looked at both. There's a clear price at which we would love to own Deere. But, in the fertilizer space, and understand there's a proposed merger going on, we have found it difficult to find one company that truly has much lower costs than the other. In a commodity business, if you can find a company that structurally has much lower cost than another, it helps assure you that they will be a survivor if and when commodity prices are low, and then the company may in fact capitalize during times of low prices to maybe increase its market share position.

    So, we have not been able to identify, at least yet, a fertilizer company that really stands out in terms of quality and being lower cost than others.

    From Charles de Vaulx (Trades, Portfolio)'s semi-annual 2016 IVA Funds call.   


  • IVA Funds Comments on Emerson

    Question: You hold Emerson Electric. It's always acquired a lot of companies over the years. Do you think it could be anything like a Valeant, who acquired a lot of companies over the years, or have some characteristics like that?

    Chuck de Lardemelle: No, not at all. Emerson (NYSE:EMR) has a very strong track record of making smart acquisitions, spending some Research and Development. Now, over the last few years, they've diversified into a business that they are now trying to spin off and making a number of acquisitions in uninterruptible power supplies/electronics. That vertical, if you will, has not worked out at all for Emerson, and they are going back to basics and spinning off or selling that division. The balance sheet is extremely strong, which is absolutely not the case of a Valeant.

    Emerson is in no position to hike prices and gouge clients. It's a very strong industrial company that is extremely well managed from an operational point of view, that has a strong balance sheet, and has not been able to hike prices substantially. However, again, over the last few years, they've gathered a collection of companies in one segment and those acquisitions turned out to be a mistake. And that's what provided us with an opportunity to get into Emerson. And they recognized their mistake and are now trying to correct it. So, in no way, shape, or form is it similar to a Valeant, in our opinion.

    From Charles de Vaulx (Trades, Portfolio)'s semi-annual 2016 IVA Funds call.   


  • IVA Funds Comments on Samsung Electronics

    Moving on to another large position, Samsung Electronics (XKRX:000830) is up substantially from its lows this year, and therefore not as attractive as it used to be. However, the balance sheet is pristine, the company sells not too far from tangible book value, and we believe the semiconductor franchise is highly profitable and solid. As for the telecom handset franchise, well, I'm sure you'll remember Motorola, Nokia, Siemens, SAGEM, or Sony Ericsson handset businesses? Yes, they all went out of business.

    So, what do we see there? Why should it be different for Samsung Electronics? Well, SmartPhones today are computers; capital employed in the business is very low. Basically, Samsung simply assembles the mini-computers. It's a business model akin to the Dell business model, not to a Nokia. The industry has consolidated; through its scale, Samsung is able to achieve buying power and a low-cost position; and through the advanced manufacturing of display components and semiconductors, Samsung has an edge in innovation. We anticipate this business may remain profitable in the future, with single-digit operating margin being sustainable despite heavy Chinese competition. Capital allocation and governance have been issues in the past for the Samsung Group. There are encouraging signs on both fronts. Time will tell.

    From Charles de Vaulx (Trades, Portfolio)'s semi-annual 2016 IVA Funds call.   


  • IVA Funds Comments on Berkshire Hathaway

    Next, Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) still sells at a discount to our estimate of its intrinsic value. We believe Buffett and his successors are likely to be able to compound at a reasonable pace, particularly due to the ability to buy listed or unlisted companies in their entirety. A few looming technological innovations, though may be tough for some of Berkshire's businesses: driverless cars would negatively impact insurance subsidiary Geico, while driverless trucks would be a large negative for the railroad business, Burlington Northern. If battery technology continues to improve, at some point the storage of electricity will make renewable energy a lot more competitive against traditional utilities, a risk for Berkshire Hathaway Energy.

    This conglomerate, however, is well equipped to deal with obsolescence: after all, Berkshire is quite unique in its ability to take cash flow from mature or declining business A to invest successfully in a totally unrelated business B. Hopefully the lack of red tape, the investment culture, the candor, and the ethics on display at Berkshire will survive both Warren and Charlie.

    From Charles de Vaulx (Trades, Portfolio)'s semi-annual 2016 IVA Funds call.   


  • Charles de Vaulx's IVA Funds Semi-Annual Update Call Transcript

    Tara Hannigan: Thank you. Good afternoon, and welcome to the Semi-Annual IVA Funds Update Call. We thank you for joining us this afternoon. I'm Tara Hannigan, the Director of Mutual Fund Distribution. Our goals on this call are to update you on the funds and share our current investment thinking. Our portfolio managers, Charles De Vaulx and Chuck de Lardemelle, will give you prepared remarks explaining what they're seeing around the world today, and then we will open the call up to questions.


    To update you on IVA as a firm as of August 31, 2016, we had approximately $18.5 billion in total assets under management with our two mutual funds comprising just over $12.3 billion of that total. Both funds do remain closed to new investors.

      


  • IVA International Gains 4 in 2nd Quarter

    IVA International Fund (Trades, Portfolio) acquired four new holdings in the second quarter. They are Fanuc Corp. (TSE:6954), Euler Hermes Group SA (XPAR:ELE), Yokogawa Electric Corp. (TSE:6841) and Jardine Lloyd Thompson Group PLC (LSE:JLT).


    IVA International was established in 2008 by International Value Advisers and is managed by Charles de Lardemelle and Charles de Vaulx (Trades, Portfolio). The fund seeks long-term growth of capital and invests in a variety of securities and asset classes from markets around the world. The fund utilizes in-house, fundamental research conducted by analysts to aid in their decision-making process.

      


  • Charles de Vaulx Hikes Stake in Hyundai Motors

    Morocco native Charles de Vaulx (Trades, Portfolio) more than tripled his stake in Hyundai Motor Co. (XKRX:005380) during the second quarter.


    De Vaulx is the portfolio manager of the IVA Worldwide Fund, which focuses on long-term growth of capital through investing in a range of securities and asset classes from markets around the world. In the second quarter de Vaulx added 283,248 shares of Hyundai at an average price of 141,280 South Korean won ($126.16) per share.

      


  • Charles de Vaulx Invests in 5 New Holdings in 2nd Quarter

    Charles de Vaulx (Trades, Portfolio), chief investment officer and portfolio manager at International Value Advisers, added five new holdings to the portfolio in the second quarter.


    The guru acquired an 844,953-share holding in American Express (NYSE:AXP), a financial services company based in New York City, for an average price of $63.32 per share. The deal had a 1.16% impact on the portfolio.

      


  • Value Screeners Identify Opportunities

    Several companies made multiple GuruFocus value screeners as of Aug. 2.


    In addition to identifying the best stocks in which to invest, the value screeners provide insight in which sectors have high value potential in the short term. Based on the stocks that made the screeners, retail and industrial companies offer good investing opportunities.

      


  • IVA Worldwide Fund 2nd Quarter Commentary

    The IVA Worldwide Fund Class A (NAV) (“the Fund”) ended the quarter on June 30, 2016 with a return of 0.91% versus the MSCI All Country World Index (“Index”) return of 0.99% bringing YTD performance to 1.90% versus the Index return of 1.23% for the same period.


    The majority of the second quarter was uneventful. And then Brexit happened. Although the possibility of the UK voting to Leave the EU had been on investors’ minds for months, most everyone was surprised by the final result on June 24th. Markets recoiled, the Pound plummeted, and the currency safe havens of the USD and JPY leapt. It became clear that markets never truly believed the UK would Leave and that the possibility wasn’t adequately priced in. Brexit brings along with it a multitude of financial and political uncertainties and it is unclear at this time what the ultimate global consequences will be. What is clear, yet again, is that attempting to forecast market events can be both futile and dangerous. At IVA we continue to focus on valuations, worst case scenarios, and their impact on our portfolio. This has helped us minimize drawdowns through many storms, most recently the market’s reaction to Brexit. We believe our portfolio is well positioned as we grapple with post-Brexit unknowns on top of other risks we see, including large credit excesses in China and prolonged Central Bank manipulations. We remain cautious, requiring risk premiums that accurately reflect the current treacherous investment environment.

      


  • Charles De Vaulx Comments on DeVry

    As for DeVry (NYSE:DV) (which only the Worldwide Fund owns), our intrinsic value estimate was impaired as we underestimated the extent of the decline of the BTM (Business, Technology, Management) segment. We note, however, that the overwhelming majority of DeVry’s profits come from its healthcare schools (Nursing, Veterinary, and Physicians) where student loan defaults have been negligible.

      


  • Charles De Vaulx Comments on News Corp

    News Corp. (NASDAQ:NWSA)’s value has been impaired by a continued difficult environment for their newspapers, a weaker Australian dollar and the expensive acquisitions of Move Inc. and iProperty Group Ltd. A substantial part of News Corp.’s value though resides in their ownership of a stake in REA Group Ltd, a dominant and highly profitable real estate portal in Australia.

      


  • Charles De Vaulx Comments on Astellas Pharma Inc.

    Finally, a word on Astellas Pharma Inc. (TSE:4503), owned by both Funds. Astellas is the perfect antithesis of Valeant: Astellas spends substantial amounts on R&D (around 17% of revenues) and develops life-saving drugs, recently in oncology with Xtandi (treatment of prostate cancer); has no financial leverage; does not engage in price gouging; has a strong pipeline and conservative accounting; allocates capital well; pays dividends; buys back shares at reasonable prices whilst maintaining a substantial net cash position: exercises restraint in compensation of senior executives; is not promotional; and trades at a single digit multiple of earnings before interest, amortization and taxes. One risk, however, is that high healthcare costs in the U.S. lead to greater regulation of drug prices in the U.S. Such a development would be a negative for Astellas. We believe that risk is more than priced in at the current stock price.

      


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