The Tweedy Browne (Trades, Portfolio) International Value Fund revealed its portfolio for the second quarter earlier this week.
Part of Tweedy Browne (Trades, Portfolio) Co. LLC, the Stamford, Connecticut-based fund seeks long-term capital growth by investing in a diversified number of companies from developed markets around the world. While most of its holdings are in non-U.S. stocks, investments in the U.S. are permitted by the management team when the opportunities appear to be more attractive.
During the three months ended June 30, NPORT-P filings show the fund entered six new positions, sold out of five stocks and added to or reduced a number of other existing investments. Its most notable trades included reductions in Safran SA (XPAR:SAF, Financial), Henkel AG & Co. KGAA (XTER:HEN, Financial) and CK Hutchison Holdings Ltd. (HKSE:00001, Financial) as well as the divestment of Unilever PLC (XAMS:UNA, Financial) and Brenntag SE (HAM:BNR, Financial).
Investors should be aware that, just like 13F reports, NPORT-P reports do not provide a complete picture of a guru’s holdings to the public. Filed by certain mutual funds after each quarter’s end, they collect a wide variety of information on the fund for the SEC’s reference, but in general, the only information made public is in regard to long equity positions. Unlike 13Fs, they do require some disclosure for long equity positions in foreign stocks. Despite their limitations, even these limited filings can provide valuable information. You can read more about form NPORT-P at the SEC website here.
Safran
The fund trimmed its Safran (XPAR:SAF, Financial) stake by 10.15%, shedding 167,155 shares. The transaction had an impact of -0.44% on the equity portfolio. The stock traded for an average price of 139.26 euros ($156.54) per share during the quarter.
It now holds 1.48 million shares in total, accounting for 4.01% of the equity portfolio as the second-largest holding. GuruFocus estimates the fund has gained 196.95% on the investment so far.
The French aircraft equipment manufacturer has a market cap of 59.17 billion euros; its shares closed at 138.74 euros on Thursday with a price-book ratio of 6.16 and a price-sales ratio of 3.58.
The GF Value Line suggests the stock is fairly valued currently based on its historical ratios, past financial performance and analysts’ future earnings estimates.
At 75 out of 100, the GF Score indicates the company is likely to have average future performance. While it received high momentum and profitability ratings, the financial strength and value ranks are more moderate and growth is low.
Of the gurus invested in Safran, Tweedy, Browne still has the largest stake with 0.35% of its outstanding shares. Steven Romick (Trades, Portfolio), the CI Select Canadian Equity Fund (Trades, Portfolio) and the iShares MSCI ACWI ex. U.S. ETF also have positions in the stock.
Henkel
The Henkel (XTER:HEN, Financial) position was reduced by 15.05%, or 253,226 shares. The transaction impacted the equity portfolio by -0.32%. Shares traded for an average price of 67.19 euros each during the quarter.
The fund now holds 1.43 million shares in total, which represent 1.74% of the equity portfolio. GuruFocus found it has gained 32.06% on the long-held investment.
The German chemical and consumer goods company has a market cap of 28.05 billion euros; its shares closed at 63.18 euros on Thursday with a price-earnings ratio of 23.78, a price-book ratio of 1.49 and a price-sales ratio of 1.15.
According to the GF Value Line, the stock is modestly undervalued currently.
The GF Score of 76 implies the company is likely to have average performance going forward on the back of high ratings for financial strength and profitability, middling marks for value and momentum and a low growth rank.
With a 1.05% stake, David Herro (Trades, Portfolio) is the company’s largest guru shareholder. Henkel is also being held by the iShares MSCI ACWI ex. U.S. ETF.
CK Hutchison Holdings
The fund curbed its holding of CK Hutchison (HKSE:0001) by 31.58%, selling 2.34 million shares. The transaction had an impact of -0.26% on the equity portfolio. During the quarter, the stock traded for an average per-share price of 50.14 Hong Kong dollars ($6.42).
It now holds 5.07 million shares, occupying 0.54% of the equity portfolio. GuruFocus data shows the fund has lost 13.63% on the investment to date.
The Hong Kong-based industrial conglomerate, which has operations in ports, retail, infrastructure and telecommunications, has a HK$181.74 billion market cap; its shares closed at HK$47.70 on Thursday with a price-earnings ratio of 4.97, a price-book ratio of 0.35 and a price-sales ratio of 0.70.
Based on the GF Value Line, the stock appears to be modestly undervalued currently.
The GF Score of 80 means the company is likely to have average future performance, driven by high profitability and momentum ratings and moderate growth, financial strength and value ranks.
The International Value Fund has the largest stake in CK Hutchison with 0.13% of its outstanding shares. Other guru investors include the Third Avenue Value Fund (Trades, Portfolio), Francisco Garcia Parames (Trades, Portfolio) and the iShares exchange-traded fund.
Unilever
Tweedy, Browne’s fund exited its 552,920-share position in Unilever’s (XAMS:UNA, Financial) Amsterdam-listed shares, impacting the equity portfolio by -0.50%. The stock traded for an average price of 48.43 euros per share during the quarter.
GuruFocus says the fund lost 1.31% on the investment over its lifetime.
The British consumer goods manufacturer has a market cap of 116.67 billion euros; its Amsterdam-listed shares closed at 46.43 euros on Thursday with a price-earnings ratio of 15.36, a price-book ratio of 6.08 and a price-sales ratio of 1.96.
The GF Value Line suggests the stock is modestly undervalued currently.
The GF Score of 63 indicates the company has poor performance potential. Although Unilever received high ratings for profitability and value, the growth and financial strength ranks are more moderate. It did not get a grade for momentum.
No gurus currently own the stock.
Brenntag
The International Value Fund dumped its 203,190-share holding of Brenntag (HAM:BNR, Financial), which had an impact of -0.27% on the equity portfolio. The Hamburg-listed shares traded for an average price of 72.80 euros each during the quarter.
GuruFocus research shows the fund gained 5.80% on the short-lived investment.
The German chemical distribution company has a market cap of 11.02 billion euros; its Harburg-listed shares closed at 70.96 euros on Thursday with a price-earnings ratio of 12.93, a price-book ratio of 2.50 and a price-sales ratio of 0.57.
According to the GF Value Line, the stock is modestly undervalued currently.
The GF Score of 89 implies the company has good outperformance potential with high ratings for all five criteria.
There are currently no gurus who own the stock.
Additional trades and portfolio composition
During the quarter, the fund also entered positions in companies like Teleperformance SE (XPAR:TEP, Financial), Ubisoft Entertainment (XPAR:UBI, Financial) and Dentsu Group Inc. (TSE:4324, Financial) and added to a number of holdings, including Kemira Oyj (OHEL:KEMIRA, Financial) and Rubis SCA (XPAR:RUI, Financial).
The International Value Fund’s $5.69 billion equity portfolio, which is composed of 99 stocks, is most heavily invested in the industrials and consumer defensive sectors.
In 2022, the fund posted a -7.53% return, which slightly underperformed the MSCI EAFE Index’s return of -4.60%.
