Two of my favorite international gurus are United States-based David Herro and Spain-based Francisco Garcia Paramés. I favor these two gurus because they specialize in value investing in international markets which are largely overlooked. David Herro is the manager of the Oakmark International Fund (OAKIX), the Oakmark International Small Cap Fund (OAKEX) and the Oakmark Global Select Fund (OAKWX). He is also the Chief Investment Officer for International Equities at Harris Associates.
As of the close of the third quarter, David Herro held on to 58 stocks valued at $23.15 billion. The guru added five new stocks to his holdings over the past quarter. Check out David Herro’s complete third quarter portfolio here.
Francisco Garcia Paramés is the Chief Investment Officer of Bestinver Asset Management in Madrid, Spain. The guru is often considered to be the “Warren Buffett of Spain.” Paramés is also the portfolio manager of Bestinver’s Bestinfond portfolio which held 101 stocks valued at $1.4 billion. The guru added two new stocks to his holdings over the past quarter. Check out Francisco Garcia Paramés’ complete third quarter portfolio here.
As of the close of the third quarter Herro and Paramés hold two of the same companies. These twp stocks are Willis Group Holdings PLC and Tesco PLC.
Willis Group Holdings PLC (WSH)
Guru David Herro holds on to 12,505,000 shares of Willis Group Holdings PLC, representing 7.1% of the company’s shares outstanding and 2.3% of his total portfolio. Over the past quarter he increased his holdings 22.79% by purchasing a total of 2,321,000 shares of the company’s stock. He bought these shares at an estimated average quarterly price of $42.63 per share. From this average, the price per share is up about 5.3%.
Herro’s holding history:
Francisco Garcia Paramés holds on to 1,095,565 shares of Willis Group, representing 0.62% of the company’s shares outstanding and 2.4% of his total portfolio. Over the past quarter he cut his holdings -9.98% by selling 121,469 shares of the company’s stock. He sold these shares in the third quarter price range of $40.66 to $44.93, with an estimated average quarterly price of $42.63 per share. The price is now up approximately 5.3%.
Paramés’ historical holding history:
Willis Group Holdings plc is a leading global risk advisor, insurance and reinsurance broker. The company provides insurance brokerage, reinsurance and risk management consulting services to its worldwide clients. It has significant market positions in the US, in the UK and, directly and through its associates, in many other countries.
Willis Group’s historical revenue and net income:
The top guru shareholders of Willis Group:
1. Jeff Ubben: 18,214,700 shares, representing 10.34% of the company’s shares outstanding.
2. David Herro: 12,505,000 shares, representing 7.1% of the company’s shares outstanding.
3. Jean-Marie Eveillard: 6,326,416 shares, representing 3.59% of the company’s shares out.
The analysis on Willis Group reports that the company’s dividend yield is near a 5-year low, its price is near a 10-year high and its P/S ratio is near a 5-year high as well.
The company’s third quarter results reported:
· Reported growth in commissions and fees of 5.6% and organic growth of 5.7%
· Adjusted net income from continuing operations was $0.19 per diluted share, down from $0.22 per share last year.
· Revenues were up 5.4% to $795 million.
· Total expenses of $720 million, up from $684 million last year.
On Dec. 2, Willis Group was recognized as an Insurance Industry Leader by Business Insurance magazine. Also Kim Waller, the Executive VP of North America, was named as one the “Women to Watch” in the magazine.
Willis Group Holdings has a market cap of $7.95 billion. Its shares are trading at around $44.73 with a P/S ratio of 2.20 and a P/B ratio of 3.90. The company’s dividend yield is currently at 2.50%.
Tesco PLC (LSE:TSCO)
As of the third quarter David Herro holds on to 83,284,000 shares of Tesco, representing 2.1% of his total portfolio and 1.03% of the company’s shares outstanding. The guru added an additional 16,889,000 shares to his holdings this quarter in the price range of £3.31 to £3.78, with an estimated average quarterly price of £3.64 per share. Since then the price per share has dropped approximately -8.2%.
Herro’s holding history:
As of the third quarter Paramés held on to 6,250,611 shares of Tesco, representing 1.9% of his total portfolio and 0.08% of the company’s shares outstanding. Over the duration of the third quarter Paramés added 2,371,472 shares to his holdings. He bought these shares in the quarterly price range of £3.31 to £3.78, with an estimated average quarterly price of £3.64 per share. Since then the price per share has dropped approximately -8.2%.
Paramés’ holding history:
Tesco PLC is a British multinational grocery and general merchandise retailer. The company also provides retail banking and insurance services through its subsidiary, Tesco Bank. Tesco is the second largest retailer in the world, measured by profits, following Wal-Mart.
Tesco’s historical revenue and net income:
The analysis on Tesco reports that the company’s revenue has slowed down over the past year, its price is close to a 1-year high and its gross and operating margins have been in a 5-year decline.
The company recently released a third quarter interim management statement which highlighted:
· Group sales growth up 0.6%.
· UK sales growth up 0.9%.
· Challenging international conditions, particularly in Ireland and Thailand.
Tesco also announced yesterday that it is joining the Regent Street elite, which gives the company the premium advertising locations in England. The company is following this actual “window display” with the creation of an “interactive window display” in 11 Metro stores across the country. To read more about this new jump in advertising, read more here.
The Peter Lynch Chart suggests that the company is currently overvalued:
Tesco PLC has a market cap of £26.91 billion. Its shares are currently trading at around £3.34 with a P/E ratio of 217.70, a P/S ratio of 0.41 and a P/B ratio of 1.61. The dividend yield of Tesco stocks is currently at 4.42%. The company had an annual average earnings growth of 7.40% over the past ten years.
GuruFocus rated Tesco PLC the business predictability rank of 3-star.
Check out both David Herro’s third quarter portfolio and Francisco Garcia Paramés’ third quarter holdings here.
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