This past week the MS Global Franchise Fund released their second quarter portfolio. Their most recent portfolio update highlighted 28 stocks, with two of them being new buys occurring in the second quarter. The fund’s second quarter portfolio is valued at $566 million and displays a Q/Q turnover of 2%.
The following five companies represent the five largest positions amongst MS Global Franchise Fund’s second quarter portfolio.
British American Tobacco PLC (LSE:BATS)
The fund’s largest holding is in British American Tobacco where they hold on to 947,309 shares of the company’s stock. This position makes up for 10% of their total portfolio holdings as well as 0.05% of the company’s shares outstanding.
The MS Global fund cut their position -11.81% over the past quarter by selling 126,882 shares of the company’s stock. They sold these shares in the second quarter price range of £33.07 to £36.01, with an estimated average quarterly price of £34 per share. Since this increase the price per share is up approximately 3.4%.
MS Global Franchise Fund’s historical holding history:
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:
The analysis on British American Tobacco reports that the company’s Piotroski F-Score is high, its operating margin is expanding, its revenue per share has been in decline over the past year and its price is sitting near a 10-year high
The Peter Lynch Chart suggests that the company is currently overvalued:
British American Tobacco PLC has a market cap of £61.16 billion. Its shares are currently trading at around £35.95 with a P/E ratio of 17.60, a P/S ratio of 4.49 and a P/B ratio of 9.77. The dividend yield of BATS stock is currently at 4.03%. The company had an annual average earnings growth of 9.40% over the past ten years.
GuruFocus rated British American Tobacco the business predictability rank of 4.5-star.
Nestle SA (XSWX:NESN)
MS Global’s second largest position is in Nestle where they hold on to 687,710 shares of the company’s stock. This position makes up for 9.4% of the fund’s total portfolio and 0.02% of the company’s shares outstanding.
Over the past quarter Morgan Stanley cut their holdings -10.68% by selling 82,198 shares. The fund purchased these shares in the quarterly price range of CHF66.45 to CHF71.50, with an estimated average quarterly price of CHF68.83 per share. Since then the price per share is up about 3.8%.
The fund’s historical holding history of Nestle:
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:
The analysis on the Nestle reports that the company’s revenue per share has been in decline over the past year, its price is near a 10-year high and over the past year the company has issued CHF3.7 billion of debt.
The Peter Lynch Chart suggests that the company is currently overvalued:
Nestle SA has a market cap of CHF227.9 billion. Its shares are currently trading at around CHF71.45 with a P/E ratio of 22.80, a P/S ratio of 2.47 and a P/B ratio of 3.55. The company had an annual average earnings growth of 3.90% over the past ten years.
Unilever PLC (LSE:ULVR)
The fund’s third largest holding is in Unilever where they maintain 1,033,410 shares as of the second quarter. This position makes up for 8.3% of the fund’s total portfolio and 0.03% of the company’s shares outstanding.
Over the second quarter Morgan Stanley decreased their position -10.68% by selling 123,514 shares. They sold these shares in the quarterly price range of £25.37 to £27.26, with an estimated average quarterly price of £26.44 per share. Since then the price per share has increased approximately 2.5%.
MS Global’s historical holding history:
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:
Unilever is currently only held by the guru-rated MS Global Franchise Fund.
The analysis on Unilever reports that the company’s dividend yield is near a 3-year high, its revenue per share has been in decline over the past year and its price is sitting near a 10-year high.
The Peter Lynch Chart suggests that Unilever is currently overvalued:
Unilever PLC has a market cap of £81.97 billion. Its shares are currently trading at around £27.00 with a P/E ratio of 19.70, a P/S ratio of 1.92 and a P/B ratio of 6.91. The dividend yield of Unilever stocks is currently at 3.36%. The company had an annual average earnings growth of 11.50% over the past ten years.
Reckitt Benckiser Group PLC (LSE:RB.)
MS Global Fund’s fourth largest holding goes to Reckitt Benckiser Group where the fund maintains 464,789 shares. This position makes up for 7.2% of the fund’s total holdings and 0.06% of the company’s shares outstanding.
Over the past quarter MS Global cut their holdings -10.68% by selling 55,553 shares of the company’s stock. They sold these shares in the quarterly price range of £47.34 to £52.70, with an estimated average quarterly price of £49.92. Since then the price per share has increased approximately 6.8%.
Morgan Stanley’s historical holding history:
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:
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:
Reckitt Benckiser Group has a market cap of £38.66 billion. Its shares are currently trading at around £53.30 with a P/E ratio of 22.50, a P/S ratio of 3.89 and a P/B ratio of 6.09. The dividend yield of Reckitt Benckiser stocks is currently at 2.56%. The company had an annual average earnings growth of 15% over the past ten years.
GuruFocus rated Reckitt Benckiser the business predictability rank of 4-star.
Sanofi (XPAR:SAN)
The guru’s fifth largest position is in Sanofi, where the fund holds on to 300,239 shares of the company’s stock. Their holdings in the company make up for 5.6% of their total portfolio holdings along with 0.02% of the company’s shares outstanding.
During the second quarter the fund dropped their stake -10.68% by selling a total of 35,886 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 11%.
The fund’s historical holding history:
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:
The analysis on the Sanofi reports that the company’s revenue per share has been in decline over the past three years, 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 undervalued:
Sanofi has a market cap of €113.72 billion. Its shares are currently trading at around €86.10 with a P/E ratio of 27.60, a P/S ratio of 3.45 and a P/B ratio of 2.20. The company had an annual average earnings growth of 3.80% over the past ten years.
GuruFocus rated Sanofi the business predictability rank of 2-star.
Check out the MS Global Franchise Fund’s complete second quarter portfolio here.
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