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International Favorite David Herro's Top Five Holdings

Monica Wolfe

Monica Wolfe

133 followers

David Herro is a favorite among an exclusive group of international gurus. As the chief investment officer of International Equities for Harris Associates, you would think he had his hands full enough already, but Herro is also the portfolio manager of the Oakmark International Fund, the Oakmark International Small Cap Fund and the Oakmark Global Select Fund. The international guru has 28 years of investing experience under his belt and has been with Harris Associates since 1992.

Herro launched his Oakmark International fund in September 1992 and since then he’s seen strong performances in all market conditions. David Herro joined Harris Associates in Chicago in 1992 as a portfolio manager and has since then moved into the position of partner and CIO of international investments.

As of March 31, David Herro (Trades, Portfolio) holds on to 56 stocks, with no new buys occurring over the past quarter. His portfolio is valued at over $29.68 billion. The following five companies represent the guru’s top five positions as of the close of the first quarter.

Credit Suisse Group (XSWX:CSGN)

David Herro’s largest holding is in Credit Suisse Group where he holds on to 48,730,000 shares of the company’s stock. His position in the company makes up for 5.3% of his total portfolio and 3.06% of the company’s shares outstanding.

During the first quarter Herro upped his holdings 4.18% by purchasing a total of 1,957,000 shares of the company’s stock. Herro bought these shares near the estimated average quarterly price of CHF28.04 per share. Since then the price per share has decreased approximately -3.6%.

Herro’s historical holding history:

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Credit Suisse Group holds direct or indirect interests in all types of businesses in Switzerland and abroad, in particular in the areas of banking, finance, asset management and insurance. The company's business consists of two operating divisions: Private Banking & Wealth Management and Investment Banking.

Credit Suisse’s historical revenue and net income:

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The analysis on the company reports that the company’s revenue has been in decline over the past three years, its dividend yield is close to a 3-year low and its P/E ratio is close to a 2-year low.

The Peter Lynch Chart suggests that Credit Suisse is currently overvalued:

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Credit Suisse has a market cap of CHF42.92billion. Its shares are currently trading at around CHF27.04 with a P/E ratio of 29.90, a P/S ratio of 1.69 and a P/B ratio of 0.98.

Allianz SE (XTER:ALV)

Herro’s second largest position is in the Germany-based Allianz where he maintains 6,502,000 shares of the company’s stock. This position takes up 3.7% of his entire portfolio as well as 1.43% of the company’s shares outstanding.

During the first quarter Herro upped his position 15.86% by purchasing 890,000 shares of the company’s stock. He purchased these shares near the estimated average quarterly price of €126.52 per share. Since then the price per share has decreased approximately -1.4%

Herro’s first quarter historical holding history:

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Allianz is an integrated and globally operating financial services provider that seeks to offer its clients value by providing a range of insurance and financial products as well as an extensive advisory capacity through its subsidiaries under strong and well-known brands.

Allianz’s historical revenue and net income:

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The analysis on Allianz reports that the company’s dividend yield is near a 5-year low, its price is near a 5-year high and its P/S ratio is also near a 5-year high. David Herro (Trades, Portfolio) and the Invesco European Growth Fund (Trades, Portfolio) are currently the only gurus who hold a position in Allianz.

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

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Allianz SE has a market cap of €56.58 billion. Its shares are currently trading at around €124.70 with a P/E ratio of 9.40, a P/S ratio of 0.56 and a P/B ratio of 0.99. The company’s dividend yield is currently sitting at around 3.19%. The company also had an annual average earnings growth of 11.40% over the past five years.

Kering (XPAR:KER)

The guru’s third largest position is in France-based Kering where he holds on to 4,677,000 shares of the company’s stock. The guru’s holdings make up for 3.2% of his total port folio and 3.71% of the company’s shares outstanding.

During the past quarter Herro increased his holdings by 39.32%. He purchased a total of 1,320,000 shares near the estimated average quarterly price of €147.83 per share. The price per share has increased approximately 8.2% since then.

The guru’s historical holding history:

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Kering designs, manufactures and markets desirable products across two segments, namely luxury and sport and lifestyle.

Kering’s historical revenue and net income:

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The analysis on Kering reports that the company’s revenue per share has been in decline over the past five years, its operating margin is expanding, and its P/E and P/B ratios are trading at near 10-year highs.

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

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Kering has a market cap of €20.17 billion. Its shares are currently trading at around $159.90 with a P/E ratio of 408.70, a P/S ratio of 2.07 and a P/B ratio of 1.80. The dividend yield of Kering’s stock is at 2.35%, and the company had an annual average earnings growth of 1.20% over the past ten years.

Toyota Motor Corp (TSE:7203)

David Herro (Trades, Portfolio)’s fourth largest position is in Toyota Motor Corp where the guru holds on to 16,038,000 shares of the company’s stock. His holdings make up for 3.1% of his total portfolio and 0.51% of the company’s shares outstanding.

The guru increased his position 38.25% over the first quarter, purchasing 4,437,000 shares of the company’s stock. He bought these shares near the estimated average quarterly price of ¥5916.21. Since then the price per share has decreased approximately -5.1%.

David Herro’s historical holding history:

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Toyota Motor Corp. conducts business in the automotive industry. It also conducts business in finance and other industries. The company's business segments are automotive operations, financial services operations and all other operations.

Toyota’s historical revenue and earnings growth:

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The analysis on Toyota Motor Corp reports that the company has issued ¥1761.9 billion of debt over the past three years, but that its debt level is acceptable. The analysis also notes that the company’s dividend yield is close to a 10-year high, its Piotroski F-Score is high, and the company’s P/E, P/B and P/S ratios are all trading at near-historic lows.

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

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Toyota Motor Corp has a market cap of ¥17791.9 billion. Its shares are currently trading at around ¥5613 with a P/E ratio of 9.60, a P/S ratio of 0.71 and a P/B ratio of 1.24. The dividend yield of Toyota Motor stocks is 2.46%. The company had an annual average earnings growth of 19% over the past five years.

CNH Industrial (MIL:CNHI)

The guru’s fifth largest holding is in CNH Industrial NV where he holds on to 79,722,000 shares of the company’s stock. This position makes up for 3.1% of Herro’s total assets managed.

During the first quarter Herro increased his holdings 18.96% by purchasing a total of 12,709,000 shares of the company’s stock. He purchased these shares near the estimated average quarterly price of €8.09 per share. Since then the price per share has dropped approximately -1.2%%.

Herro’s historical holding history:

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CNH Industrial is an American-Italian company that, through its various businesses, designs, produces, and sells agricultural equipment and construction equipment, as well as trucks, commercial vehicles, buses, and special vehicles.

CNH Industrial’s historical revenue and net income:

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The analysis on CNH Industrial reports that the company’s sales outstanding has recently been increasing and its inventory has been building up, meaning the company could be having trouble collecting payment and selling its merchandise. The analysis also notes that the company’s P/B and P/S ratios are trading at near 1-year lows.

CNH Industrial NV has a market cap of €10.79 billion. Its shares are currently trading at around €7.99 with a P/E ratio of 47.60 and a P/S ratio of 0.42. The dividend yield of CNH Industrial is at 2.50%.

Check out David Herro’s complete fourth quarter portfolio here.

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