10-year

Don't Miss This Only Promotion (20% off)

Join GuruFocus Premium Membership Now for Only $279/Year

Save up to $500 on Global Membership.

Don't Miss It !

Free 7-day Trial
All Articles and Columns »

Morgan Stanley Global Franchise Fund's Top Five

Monica Wolfe

Monica Wolfe

133 followers
Late last week the MS Global Franchise Fund released their third quarter portfolio. Their most recent portfolio update highlighted 29 stocks, with three of them being new buys occurring in the third quarter. The fund’s third quarter portfolio is valued at $592 million and displays a Q/Q turnover of 9%.

The following five companies represent the five largest positions amongst MS Global Franchise Fund’s third quarter portfolio.

Nestle SA (XSWX:NESN)

MS Global’s largest position is in Nestle where they hold on to 867,856 shares of the company’s stock. This position makes up for 10.3% of the fund’s total portfolio and 0.03% of the company’s shares outstanding.

Over the past quarter Morgan Stanley upped their holdings a slight 0.61% by purchasing 5,273 shares. The fund purchased these shares in the quarterly price range of CHF60.60 to CHF65.05, with an estimated average quarterly price of CHF62.58 per share. Since then the price per share is up about 4.8%.

The fund’s historical holding history of Nestle:

1386095395103.png

Nestle SA manufactures and markets food products. The Company's product line includes milk, chocolate, confectionery, creamer, coffee, food seasoning, bottled water and pet foods among others.

Nestle’s historical revenue and net income:

1386095552041.png

The analysis on the company reports that the revenue has been in decline over the past five years, the company has issued CHF6.3 billion of debt over the past year, the operating margin is expanding and P/E and P/B ratios are nearing 1-year lows.

Top guru shareholders of Nestle:

1. David Herro: 7,209,000 shares, representing a 0.22% stake and 2.2% of his total portfolio.

2. Charles de Vaulx: 4,220,716 shares, representing a 0.13% stake and 6.1% of his total portfolio.

3. Tweedy Brown: 2,781,120 shares, representing a 0.09% stake and 3.4% of their total assets.

The Peter Lynch Chart suggests that the company is currently overvalued:

1386095572713.png

Nestle SA has a market cap of CHF211.55 billion. Its shares are currently trading at around CHF65.60 with a P/E ratio of 20.00, a P/S ratio of 2.21 and a P/B ratio of 3.42. The company had an annual average earnings growth of 4.80% over the past ten years.

British American Tobacco (LSE:BATS)

The fund’s second largest holding is in British American Tobacco where they hold on to 1,125,064 shares of the company’s stock. This position makes up for 10.1% of their total portfolio holdings as well as 0.06% of the company’s shares outstanding.

The MS Global fund increased their position 7.16% over the past quarter by purchasing 75,186 shares of the company’s stock. They purchased these shares in the third quarter price range of £32.43 to £35.77, with an estimated average quarterly price of £34 per share. Since this increase the price per share is down approximately -5.2%.

MS Global Franchise Fund’s historical holding history:

1386095129692.png

British American Tobacco PLC is a holding company which owns, directly or indirectly, investments in the numerous companies constituting the British American Tobacco Group of companies. All subsidiary undertakings are involved in activities directly or indirectly related to the manufacture, distribution or sale of tobacco products.

British American Tobacco’s historical revenue and earnings growth:

1386092687067.png

The analysis on British American Tobacco reports that the company’s revenue has declined over the past year, the price is near a 10-year high and its P/B and P/S ratios are trading at historical highs. The analysis also reports that the company’s operating margin is expanding and its Piotroski F-Score is high, indicating a healthy situation for the company.

The top guru shareholders of British American Tobacco:

1. Tom Russo: 4,963,955 shares, representing 0.26% of the company’s shares outstanding and 2.8% of his total portfolio.

2. Wintergreen Fund: 1,834,526 shares representing 0.1% of the company’s shares outstanding and 5.9% of their total portfolio.

3. Tweedy Browne Global Value: 1,325,000 shares representing 0.07% of the company’s shares outstanding and 1.2% of the fund’s total assets managed.

The Peter Lynch Chart suggests that the company is currently overvalued:

1386092707674.png

British American Tobacco PLC has a market cap of £60.9 billion. Its shares are currently trading at around £32.24 with a P/E ratio of 16.70, a P/S ratio of 4.06 and a P/B ratio of 8.19. The dividend yield of BATS stock is currently at 4.27%. The company had an annual average earnings growth of 10.70% over the past ten years.

GuruFocus rated British American Tobacco the business predictability rank of 2.5-star.

Unilever PLC (LSE:ULVR)

The fund’s third largest holding is in Unilever where they maintain 1,151,038 shares as of the third quarter. This position makes up for 7.3% of the fund’s total portfolio and 0.04% of the company’s shares outstanding.

Over the third quarter Morgan Stanley upped their position 11.56% by purchasing 119,281 shares. They purchased these shares in the quarterly price range of £24.30 to £28.20, with an estimated average quarterly price of £26 per share. Since then the price per share has dropped approximately -6.5%.

MS Global’s historical holding history:

1386098346608.png

Unilever PLC is a supplier of fast moving consumer goods. Its four principal areas of operations are: Personal Care, Home Care, Foods and Refreshment.

Unilever’s historical revenue and earnings growth:

1386102741532.png

Unilever is currently only held by the guru-rated MS Global Franchise Fund.

The analysis on Unilever reports that the company’s price is near a 10-year high, it has issued £1.1 billion of debt over the past year and its inventory has been building up recently, meaning that the company might be having difficulty selling its product.

The Peter Lynch Chart suggests that Unilever is currently overvalued:

1386102765766.png

Unilever PLC has a market cap of £73.53 billion. Its shares are currently trading at around £24.31 with a P/E ratio of 19.50, a P/S ratio of 1.66 and a P/B ratio of 5.98. The dividend yield of Unilever stocks is currently at 3.67%. The company had an annual average earnings growth of 2.40%.

Reckitt Benckiser Group PLC (LSE:RB.)

MS Global Fund’s fourth largest holding goes to Reckitt Benckiser Group where the fund maintains 594,781 shares. This position makes up for 7.3% of the fund’s total holdings and 0.08% of the company’s shares outstanding.

Over the past quarter MS Global cut their holdings a slight -0.39% by selling 2,353 shares of the company’s stock. They sold these shares in the quarterly price range of £43.64 to £49.50, with an estimated average quarterly price of £45.87. Since then the price per share has increased approximately 6.4%.

Morgan Stanley’s historical holding history:

1386098569587.png

Reckitt Benckiser Group PLC is engaged in the manufacture and sale household and health care products. The group has positions in selected household, health & personal care categories.

Reckitt Benckiser’s historical revenue and net income:

1386099213415.png

The analysis on the company reports that its price is near a 3-year high, it has issued £4.5 billion of debt over the past three years and its interest coverage is comfortable, meaning the company has enough cash to cover all of its debt. The analysis also notes that the company has shown predictable revenue and earnings growth and that its operating margin is expanding.

The MS Global Franchise Fund is the only guru that currently holds a position in Reckitt Benckiser.

The Peter Lynch Chart suggests that the company is currently overvalued:

1386099235321.png

Reckitt Benckiser Group has a market cap of £35.07 billion. Its shares are currently trading at around £48.80 with a P/E ratio of 19.90, a P/S ratio of 3.60 and a P/B ratio of 6.04. The dividend yield of Reckitt Benckiser stocks is currently at 2.83%. The company had an annual average earnings growth of 16.30% over the past ten years.

GuruFocus rated Reckitt Benckiser the business predictability rank of 5-star.

Sanofi (XPAR:SAN)

The guru’s fifth largest position is in Sanofi, where the fund holds on to 348,252 shares of the company’s stock. Their holdings in the company make up for 6% of their total portfolio holdings along with 0.03% of the company’s shares outstanding.

During the third quarter the fund upped their stake 11.03% by purchasing a total of 34,596 shares. The fund bought these shares in the quarterly price range of €72.09 to €80.87, with an estimated average quarterly price of €76.79 per share. Since this increase the price per share is up a slight 0.6%.

The fund’s historical holding history:

1386098817597.png

Sanofi is a French healthcare company that is primarily focused on patient needs and is engaged in the research, development, manufacture and marketing of healthcare products. The company is traded in France, Germany, Italy and the United States.

Sanofi’s historical revenue and net income:

1386102374742.png

The analysis on the Sanofi reports that the revenue has been in decline over the past year, that the operating and gross margins have been in decline over the past few years and that the P/B ratio is nearing a 1-year low.

The Peter Lynch Chart suggests that the company is currently overvalued:

1386102400636.png

Sanofi has a market cap of €102.88 billion. Its shares are currently trading at around €77.23 with a P/E ratio of 33.90, a P/S ratio of 3.08 and a P/B ratio of 1.70. The company had an annual average earnings growth of 5.9% over the past ten years.

GuruFocus rated Sanofi the business predictability rank of 2-star.

Check out the MS Global Franchise Fund’s complete third quarter portfolio here.

Try a free 7-day premium membership trial here.

Rating: 3.4/5 (5 votes)

Voters:

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK