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Sarah Ketterer’s Causeway International Value Fund Reports Top Five

Monica Wolfe

Monica Wolfe

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Sarah Ketterer is the CEO and co-founder of Causeway. She is the portfolio manager for the firm’s fundamental and absolute returns strategies, and is responsible for investment research across all sectors. Ketterer along with Conor Muldoon, Jonathan Eng, Kevin Durkin, Harry Hartford and James Doyle manage the Causeway International Value Fund. According to their website, the International Value Fund is constructed from an equity universe spanning developed international markets.



Over the past quarter Ketterer added three new stocks to her international portfolio, bringing the total to 64 stocks valued at $5.993 billion. The following five companies are the Causeway International Value’s top five holdings as of the close of the second quarter.

Akzo Nobel NV (XAMS:AKZA)

Causeway’s largest position is in Akzo Nobel where the fund holds 2,971,523 shares. Their position in the company represents 1.22% of the company’s shares outstanding and 3.7% of its total portfolio.

During the second quarter the fund upped their stake in Akzo Nobel by 22.97%. The fund bought a total of 555,102 shares in the second quarter price range of €53.25 to €58.17, with an estimated average price of €54.68. The share price has since then dropped approximately -1.6%.

Causeway’s holding history as of the second quarter:

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Akzo Nobel is one of the world's leading companies in selected areas of healthcare products, coatings, chemical, and fibers. The company also makes paints, stains, synthetic resins, ethical and nonprescription drugs, hospital related supplies and several other products.

Akzo Nobel’s historical revenue and net income:

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The analysis on Akzo Nobel reports that the company’s revenue has been in decline over the past three years, its dividend yield is sitting near a 10-year low and its Piotroski F-Score is high – indicating a healthy situation.

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

Akzo Nobel has a market cap of €13.2 billion. Its shares are currently trading at around €53.79 with a P/E ratio of 24.40, a P/S ratio of 0.92 and a P/B ratio of 2.38. The company currently holds a dividend yield of 0.52%.

Reed Elsevier (XAMS:REN)

Causeway International Value’s second largest holding is in Reed Elsevier. The fund holds on to 8,286,222 shares, representing 3.2% of its total portfolio as well as 1.25% of the company’s shares outstanding.

Over the past quarter the fund upped their holdings 8.86% by purchasing 674,736 shares of the company’s stock. They purchased these shares in the quarterly price range of €14.71 to €16.84, with an estimated average quarterly price of €15.71 per share. Since then the price per share is trading up about 10.4%.

Causeway’s holding history as of the second quarter:

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Reed Elsevier NV operates as a publisher and an information provider. Its activities include science and medical, legal and business publishing.

Reed Elsevier’s historical revenue and net income:

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The analysis on Reed Elsevier reports that the company’s price is near a 10-year high, its Piotroski F-Score is Low, implying poor business operation, and the company currently holds no debt.

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

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Reed Elsevier has a market cap of €12.13 billion. Its shares are currently trading at around €17.35 with a P/E ratio of 19.30 and a P/B ratio of 8.15. Reed Elsevier stocks currently hold a dividend yield of 2.57%.

Novartis AG (XSWX:NOVN)

The third largest holding of Causeway is in Novartis where they hold on to 2,142,595 shares of the company’s stock. This position makes up for 3.2% of the fund’s portfolio and 0.09% of the company’s shares outstanding.

Over the past quarter Causeway upped their holdings 5.99% by purchasing 121,096 shares of the company’s stock. They purchased these shares in the quarterly price range of CHF72.90 to CHF81.40, with an estimated average quarterly price of CHF78.04 per share. Since then the price per share is trading up about 5.5%.

Causeway’s historical holding history:

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Novartis provides healthcare solutions that address the evolving needs of patients and societies worldwide with a portfolio that includes innovative medicines, preventive vaccines and diagnostic tools, generic pharmaceuticals and consumer health products.

Novartis’ historical revenue and net income:

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The analysis on Novartis reports that the company’s revenue growth has slowed down over the past year, its dividend yield is near a 5-year low and its price is near a 10-year high.

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

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Novartis has a market cap of $199.8 billion. Its shares are currently trading at around $82.35 with a P/E ratio of 23.30, a P/S ratio of 3.91 and a P/B ratio of 3.14. The dividend yield of the company’s stocks is at 2.01%. Novartis had an annual average earnings growth of 6.50% over the past ten years.

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

KDDI Corp (TSE:9433)



Causeway’s fourth largest position is in KDDI Corp. The fund maintains 3,053,200 shares of KDDI, representing 0.37% of the company’s shares outstanding and 3.1% of Causeway’s total portfolio.

The international fund upped their position in KDDI 16.1% by adding 423,300 shares to their stake over the past quarter. Ketterer and her team added these shares in the second quarter price range of ¥5131 to ¥5660, with an estimated average quarterly price of ¥5726.13 per share. Since then their increase the price per share is up approximately 4.8%.

Causeway’s holding history as of the second quarter:

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KDDI Corp is a Japanese telecommunications operator. The company provides mobile cellular services, ISP network and solution services and Fiber to the Home (FTTH) services.

KDDI’s historical revenue and net income:

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The analysis on KDDI reports that the company’s dividend yield is near a 5-year low, its price is near a 10-year high and its revenue has shown predictable revenue and earnings growth. The analysis also notes that the company’s operating margin is expanding.

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

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KDDI has a market cap of ¥5009.04 billion. Its shares are currently trading at around ¥5999.00 with a P/E ratio of 13.50, a P/S ratio of 1.14 and a P/B ratio of 1.69. The company had an annual average earnings growth of 4.9% over the past ten years.

Sanofi (XPAR:SAN)

The guru’s fifth largest position is in Sanofi, where the fund holds on to 1,769,722 shares of the company’s stock. Their holdings in the company make up for 3.1% of their total portfolio holdings along with 0.13% of the company’s shares outstanding.

During the second quarter the fund upped their stake 11.77% by purchasing a total of 186,335 shares. The fund bought these shares in the quarterly price range of €74.02 to €80.12, with an estimated average quarterly price of €77.54 per share. Since this increase the price per share is up approximately 7.7%.

The fund’s historical holding history:

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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:

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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:

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Sanofi has a market cap of €110.29 billion. Its shares are currently trading at around €83.50 with a P/E ratio of 26.80, a P/S ratio of 3.35 and a P/B ratio of 1.70. The company had an annual average earnings growth of 8.20% over the past ten years.

Check out Sarah Ketterer (Trades, Portfolio)’s Causeway and International Funds’ complete portfolio’s here.

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