As we discussed the tools for finding value ideas among international stocks, we turned our eyes to Tom Russo’s portfolio. In his portfolio we found many international companies with recognized brand names: Unilever (UN, Financial), Diageo PLC (DEO, Financial), Fomento Economico Mexicano (FMX, Financial), Royal Dutch Shell (RDS.A, Financial) and BP. Tom Russo is the general partner at Gardner Russo & Gardner and the manager of hedge fund Semper Vic Partners. Semper Vic Partners is a long only fund. Mr. Russo is the largest partner in the $3 billion-plus fund. The fund has extremely concentrated portfolio. Mr. Russo has achieved about 8% a year over the past decade, while the market is in negative territory.
Tom Russo likes to invest in consumer staples, especially in foreign companies. In a conversion with GuruFocus, he said that the reason he invests heavily in foreign companies is because “we are long term investors, and we feel that foreign companies are usually family run, and they are long term minded. These companies usually have huge name recognition. They have the brands that have hundreds of years of history. This gives them huge competitive advantages. Their consumers are loyal to these brands ... They are more shareholder friendly, do not pay that much to the managers, and they have good dividends.”
This certainly makes sense. With this article we would like to review his international holdings: Unilever (UN), Diageo PLC (DEO), Fomento Economico Mexicano (FMX), Royal Dutch Shell (RDS.A) and BP.
Unilever (UN)
Unilever is one of the world's largest consumer products companies. They produce and market a wide range of foods, home and personal care products. Their leading brands include Dove, Lipton, Magnum, Omo and Rama. They are the number one producer of frozen foods in Europe. They are also a leader in the branded olive oil category, the most important brand being Bertolli. They are the largest seller of packet tea in the world through Lipton and Brooke Bond brands.
Unilever NV has a market cap of $95.42 billion; its shares were traded at around $32.02 with a P/E ratio of 15.2 and P/S ratio of 1.6. The dividend yield of Unilever NV stocks is 3%.
Unilever is exactly the kind of businesses that Tom Russo loves: food, drink and smoke. It is a long term holding in his fund, and he has been continuously buying more Unilever over the past year. As of Dec. 31 of 2010, he owns more than 6 million shares, which is about 7% of the portfolio. This is the holding history of Tom Russo with Unilever:
Unilever is currently traded at a two-year high. The business has been growing at 3% a year on average. The profit margin is at a healthy 10%. It is reported last month that Unilever sold its personal care business to Colgate-Palmolive.
Diageo (DEO)
After we talked about food, we now come to drink. Diageo engages in producing, distilling, brewing, bottling, packaging, distributing, developing and marketing spirits, beer and wine products. The company offers a range of brands, including Johnnie Walker scotch whiskies, Smirnoff vodka, Baileys Original Irish Cream liqueur, Captain Morgan rum, Jose Cuervo tequila, JeB scotch whisky, Tanqueray gin, and Guinness stout, as well as Smirnoff ready-to-drink products.
Diageo Plc has a market cap of $48.27 billion; its shares were traded at around $77.16 with a P/S ratio of 3.1. The dividend yield of Diageo Plc stocks is 3.2%.
Diageo is also a long term holding of Tom Russo, too. He owns more than 470,000 shares, which is about 1.7% of his portfolio. The company has managed to deliver an average increase in EPS of 8.20% per year since 2000. Analysts expect Diageo to earn $4.97 per share in 2011 and $5.50 per share in 2012. This would be a nice increase from the $4.18 per share the company earned in 2010.
The company has a high return on equity, which has remained above 33% for the latter part of the past decade. It increased its dividend steadily over the past 10 years.
Fomento Economico Mexicano (FMX)
FMX is another drink company of Tom Russo. It is Latin America's largest beverage company, exporting to the United States, Canada and select countries in Europe, Asia and Latin America. Fomento Economico Mexicano S.a.b. De C.v. has a market cap of $22.1 billion; its shares were traded at around $61.76 with a P/E ratio of 17.2 and P/S ratio of 1.6. FMX had an annual average earnings growth of 19.9% over the past 10 years.
FMX is a relatively new position for Tom Russo. He started buying in the first quarter of 2010, and has been adding to the position. As of Dec. 31, 2010, Russo owns 89,625 shares, which is about 0.19% of his portfolio.
Bill Gates bought 218,000 shares in the quarter that ended on 12/31/2010, which is 0.08% of the $15.14 billion portfolio of Bill & Melinda Gates Foundation Trust.
In addition to the three companies discussed above, Tom Russo and his partners also own small positions in oil companies BP PLC (BP, Financial) and Royal Dutch Shell (RDS.A). BP became infamous last year because of the gulf oil spill. The company cut its dividend to less than half. News has since got better for BP. As of Dec. 31, his firm still owns about 8,000 shares of BP and 54,000 shares of Royal Dutch Shell. Both positions are being reduced.
To find more about Tom Russo’s portfolio, please go to Undervalued Stocks, Top Growth Companies and High Yield stocks of Tom Russo. For international stocks, check out the screens for Guru aggregated holdings and international picks.
Tom Russo likes to invest in consumer staples, especially in foreign companies. In a conversion with GuruFocus, he said that the reason he invests heavily in foreign companies is because “we are long term investors, and we feel that foreign companies are usually family run, and they are long term minded. These companies usually have huge name recognition. They have the brands that have hundreds of years of history. This gives them huge competitive advantages. Their consumers are loyal to these brands ... They are more shareholder friendly, do not pay that much to the managers, and they have good dividends.”
This certainly makes sense. With this article we would like to review his international holdings: Unilever (UN), Diageo PLC (DEO), Fomento Economico Mexicano (FMX), Royal Dutch Shell (RDS.A) and BP.
Unilever (UN)
Unilever is one of the world's largest consumer products companies. They produce and market a wide range of foods, home and personal care products. Their leading brands include Dove, Lipton, Magnum, Omo and Rama. They are the number one producer of frozen foods in Europe. They are also a leader in the branded olive oil category, the most important brand being Bertolli. They are the largest seller of packet tea in the world through Lipton and Brooke Bond brands.
Unilever NV has a market cap of $95.42 billion; its shares were traded at around $32.02 with a P/E ratio of 15.2 and P/S ratio of 1.6. The dividend yield of Unilever NV stocks is 3%.
Unilever is exactly the kind of businesses that Tom Russo loves: food, drink and smoke. It is a long term holding in his fund, and he has been continuously buying more Unilever over the past year. As of Dec. 31 of 2010, he owns more than 6 million shares, which is about 7% of the portfolio. This is the holding history of Tom Russo with Unilever:
Unilever is currently traded at a two-year high. The business has been growing at 3% a year on average. The profit margin is at a healthy 10%. It is reported last month that Unilever sold its personal care business to Colgate-Palmolive.
Diageo (DEO)
After we talked about food, we now come to drink. Diageo engages in producing, distilling, brewing, bottling, packaging, distributing, developing and marketing spirits, beer and wine products. The company offers a range of brands, including Johnnie Walker scotch whiskies, Smirnoff vodka, Baileys Original Irish Cream liqueur, Captain Morgan rum, Jose Cuervo tequila, JeB scotch whisky, Tanqueray gin, and Guinness stout, as well as Smirnoff ready-to-drink products.
Diageo Plc has a market cap of $48.27 billion; its shares were traded at around $77.16 with a P/S ratio of 3.1. The dividend yield of Diageo Plc stocks is 3.2%.
Diageo is also a long term holding of Tom Russo, too. He owns more than 470,000 shares, which is about 1.7% of his portfolio. The company has managed to deliver an average increase in EPS of 8.20% per year since 2000. Analysts expect Diageo to earn $4.97 per share in 2011 and $5.50 per share in 2012. This would be a nice increase from the $4.18 per share the company earned in 2010.
The company has a high return on equity, which has remained above 33% for the latter part of the past decade. It increased its dividend steadily over the past 10 years.
Fomento Economico Mexicano (FMX)
FMX is another drink company of Tom Russo. It is Latin America's largest beverage company, exporting to the United States, Canada and select countries in Europe, Asia and Latin America. Fomento Economico Mexicano S.a.b. De C.v. has a market cap of $22.1 billion; its shares were traded at around $61.76 with a P/E ratio of 17.2 and P/S ratio of 1.6. FMX had an annual average earnings growth of 19.9% over the past 10 years.
FMX is a relatively new position for Tom Russo. He started buying in the first quarter of 2010, and has been adding to the position. As of Dec. 31, 2010, Russo owns 89,625 shares, which is about 0.19% of his portfolio.
Bill Gates bought 218,000 shares in the quarter that ended on 12/31/2010, which is 0.08% of the $15.14 billion portfolio of Bill & Melinda Gates Foundation Trust.
In addition to the three companies discussed above, Tom Russo and his partners also own small positions in oil companies BP PLC (BP, Financial) and Royal Dutch Shell (RDS.A). BP became infamous last year because of the gulf oil spill. The company cut its dividend to less than half. News has since got better for BP. As of Dec. 31, his firm still owns about 8,000 shares of BP and 54,000 shares of Royal Dutch Shell. Both positions are being reduced.
To find more about Tom Russo’s portfolio, please go to Undervalued Stocks, Top Growth Companies and High Yield stocks of Tom Russo. For international stocks, check out the screens for Guru aggregated holdings and international picks.
