In keeping with GuruFocus’ expansion to worldwide stock market coverage, we have begun tracking firms with outstanding global investing track records, including Tweedy Browne’s Global Value Fund. Some stats on the fund: It contains 101 companies, has a total value of $4.91 billion and had a quarter-over-quarter holding turnover of 3% in the first quarter.
The diversified portfolio is “focused in developed markets, and where practicable perceived foreign currency exposure is hedged back into the U.S. dollar, according to the website, and is managed by a team of Tweedy Browne Partners.
In the first quarter, managers added five new positions of relatively small weighting to the fund: Joy Global (JOY), DBS Group Holdings Ltd. (SGX:D05), TNT Express NV (XAMS:TNTE), GlaxoSmithKline PLC (LSE:GSK) and Samyang Holdings Corp. (XKRX:000070).
Below is an overview of their trading activity and the selected companies:
Samyang Holdings Corp. (XKRX:000070)
Tweedy Browne bought 4,489 shares of South Korean company Samyang Holdings Corp. for a total of $280,000. The holding occupies 0.0057% of the portfolio.
Samyang Holdings was formed in November 2011 as a result of reorganizing the former Samyang Corporation, into a holding structure and two operating companies, Samyang Corporation (chemical, food, emerging new businesses) and Samyang Biopharm Corporation (biotech and pharmaceuticals businesses). The holding company governs the two operating companies and several other subsidiaries.
The objectives of the demerger and adopting a holding company structure, according to a company release, are “improving corporate governance transparency, to improve shareholder value, and to further enhance the accountability management by segregating businesses to their respective areas of specialization and competence.”
Possessing a $534 billion market cap, Samyang stock has gained 25% in the past year to come near a one-year high. The company has a P/E ratio of 9.5, P/B ratio of 0.63 and P/S ratio of 0.97 – also nearing a one-year high.
GlaxoSmithKline PLC (LSE:GSK)
Tweedy Browne acquired a holding of 200,000 shares of GlaxoSmithKline PLC for $45 per share on average in the fourth quarter, making it 0.095% of their portfolio. The managers have invested in GSK previously, from before 2008 to mid-2010.
GSK is a UK domiciled global health care company focused on pharmaceuticals, vaccines and consumer health care, with offices in more than 115 countries. It is one of the few companies researching treatments targeting the World Health Organization’s three priority diseases: HIV/AIDS, tuberculosis and malaria.
With an $89.49 billion market cap, GSK stock has elevated 13% over the past year, approaching its 10-year high. GSK also has a P/E of 17.8 (near a one-year high), P/B of 15.38 (near a 10-year high) and P/S of 3.07 (near a five-year high).
In GSK’s most recently released financial results, from Feb. 6, 2013, it announced a 1% year-over-year (CER) decline in group sales, or flat excluding the disposal of its over-the-counter brands. Earnings per share declined 9% CER. For 2013 it expects core EPS growth of 3% to 4% CER and sales growth of around 1% CER. It also plans to increase its dividend and buy back £1 billion to £2 billion of its shares.
TNT Express NV (XAMS:TNTE)
Managers purchased 1,039,000 shares of Netherlands company TNT Express NV, which has a total value of $7.63 million. Its third-largest buy, TNT Express comprises 0.16% of the portfolio.
TNT Express is a shipping and delivery business that operates in more than 200 countries. UPS offered to take over the company, which was supported by management and stakeholders, but blocked by the European Commission on Jan. 30, 2013.
TNT Express is positioned with a $3.12 billion market cap, a P/E of 4, P/B of 1.16 and P/S of 0.43. Over the past year, the company’s stock fell almost 38%.
According to its 2012 annual report, TNT Express’ revenue grew 1.1% year over year, and operating income of €89 million, compared to a loss of €105 million in 2011. Net loss totaled €81 million, compared to €272 million in 2011. The company faced a variety of challenges in its businesses across all geographic divisions, including price pressure, macroeconomic conditions in Europe and lower demand.
DBS Group Holdings Ltd. (SGX:D05)
The portfolio gained 1,321,700 shares of Singapore-traded company DBS Group Holdings LTD., a holding valued at $17.05 million, having a 0.35% portfolio weighting.
A financial services group in Asia with over 200 branches in 15 countries mainly in Asia, DBS was named the “Safest Bank in Asia” by Global Finance every year from 2009 to 2013. The company provides services in corporate, SME, consumer and wholesale banking to Asia and the Middle East.
DBS Group has a $38.57 billion market cap, as well as a 4.4 P/E, 1.07 P/B and 4.3 P/S, broaching its highest point in five years. At $15.65, the share price is nearing its three-year high after gaining 14% in the past year.
The company’s latest financial results of Feb. 6, 2013, included record full-year net profit of SGD 3.81, boosted by SGD 450 million in divestment gains. Total income also achieved a record SGD 8 billion on record net interest income and continued growth in customer-driven non-interest income, reflecting broadened franchising in the region.
Joy Global (JOY)
For its largest new holding, Tweedy Brown opted for 657,530 shares of Joy Global at an average purchase price of $63. It takes a 0.8% portfolio weighting.
Joy Global Inc. manufactures and markets original equipment, parts and services for the mining industry through two business units: surface and underground.
The company’s market cap is $5.72 billion, while its P/E is 7.6 (close to a three-year low), P/B is 2.2 (close to a five-year low) and P/S is 1.01 (close to a three-year low). The past year saw its stock slide almost 27%.
In its most recently announced results, Joy Global produced first quarter fiscal 2013 net sales up 1% year over year to $1.1 billion. Operating profit went up 3% to $221.2 million, with incremental operating profit from IMM and lower SG&A costs more than offsetting increased period costs. First quarter bookings decreased 29% compared to the same quarter last year, and the company expects increasingly positive commodity fundamentals to take some time to translate into more mine expansion projects at its customers.
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