David Herro (Trades, Portfolio), a portfolio manager of the Oakmark International Fund, disclosed this week that the fund's top five trades during the fourth quarter included purchases in the shares of Bayer AG (XTER:BAYN, Financial) and Roche Holding AG (XSWX:RO, Financial) and the reduction of its positions in BNP Paribas (XPAR:BNP, Financial), Baidu Inc. (BIDU, Financial) and CNH Industrial NV (MIL:CNHI, Financial).
Part of Chicago-based Oakmark Funds, the Oakmark International Fund seeks long-term capital appreciation by buying shares in businesses that are trading at discounts to intrinsic value yet have potential for shareholder value growth over time. Key criteria include good business quality and management teams that understand the dynamics of per-share value growth and are focused on achieving such growth.
As of December 2020, the fund's $25.52 billion equity portfolio contains 64 stocks, with two new holdings and a turnover ratio of 9%. The top three sectors in terms of weight are financial services, consumer cyclical and industrials, represting 28.25%, 23.51% and 15.45% of the equity portfolio.
Bayer
The Oakmark International Fund purchased 8.67 million shares of Bayer (XTER:BAYN, Financial), expanding the position 113.26% and its equity portfolio 2%. Shares averaged 46.21 euros ($55.80) during the fourth quarter.
According to GuruFocus, the German drug manufacturer has a satisfactory Piotroski F-score of 4 yet a low Altman Z-score of 0.27. Despite this, Bayer's Beneish M-score of -3.46 suggests little or no earnings manipulation.
Other funds with holdings in Bayer include Sarah Ketterer (Trades, Portfolio)'s Causeway International Value (Trades, Portfolio) Fund and Charles De Vaulx's IVA International Fund (Trades, Portfolio).
Roche
Oakmark International Fund purchased 579,000 shares of Roche (XSWX:RO, Financial), giving the position 0.79% equity portfolio weight. Shares averaged 308.24 francs ($335.66) during the fourth quarter; the stock is fairly valued based on Wednesday's price-to-GF Value ratio of 1.09.
GuruFocus ranks the Swiss drug manufacturer's profitability 8 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7 and an operating margin that has increased approximately 1.9% per year on average over the past five years and is outperforming over 95% of global competitors.
BNP Paribas
The fund sold 5.973 million shares of BNP Paribas (XPAR:BNP, Financial), cutting 24.1% of the stake and 1.04% of the equity portfolio. Shares averaged 38.62 euros during the fourth quarter.
GuruFocus ranks the French bank's financial strength 3 out of 10 on several warning signs, which include a low Piotroski F-score of 3 and debt ratios that underperform over 75% of global competitors.
Baidu
The fund sold 1.521 million shares of Baidu (BIDU, Financial), trimming the equity portfolio 0.92%. Shares averaged $148.88 during the fourth quarter.
GuruFocus ranks the Chinese interactive media giant's profitability 8 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7 and profit margins and returns outperforming approximately 70% of global competitors.
CNH Industrial
The fund 23.022 million shares of CNH Industrial (MIL:CNHI, Financial), curbing the position 23.6% and the equity portfolio 0.86%. Shares averaged 8.4 euros during the fourth quarter.
GuruFocus ranks the U.K.-based agricultural equipment manufacturer's financial strength 4 out of 10 on several warning signs, which include a low Piotroski F-score of 2 and debt ratios that underperform over 80% of global competitors.
Disclosure: No positions.
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