French-born asset manager Charles de Vaulx (Trades, Portfolio), partner, chief investment officer and co-portfolio manager at International Value Advisers, looks for many qualities in potential investments, but the most important is fundamental value. International Value Advisers’ record has been pretty good in recent years in spite of a certain amount of volatility in the market. IVA returned 3.2% last year, nearly 17% the year before and 6.63% in 2012.
De Vaulx left most of the 12 most valuable stakes in his portfolio untouched during the first quarter. His top two holdings – Astellas Pharma Inc (TSE:4503, Financial) and Berkshire Hathaway Inc (BRK.A, Financial) – haven’t been touched since 2014. Neither, for that matter, have his fourth- and fifth-most valuable stakes – Oracle Corporation (ORCL, Financial) and Samsung Electronics Co Ltd (XKRX:005930, Financial).
But de Vaulx did some trading in his third-most valuable stake, Nestle SA (XSWX:NESN, Financial), a Swiss-based food and beverage company best known for its chocolate but also a producer of baby food, coffee, dairy products, breakfast cereals, bottled water, ice cream, pet foods and baked goods.
De Vaulx sold 688,850 shares of Nestle, nearly 16% of his stake in the company, for an average price of CHF72.44 (about $77.02 in U.S. currency) per share. The transaction had a -0.96% impact on de Vaulx’s portfolio.
Nestle has a market cap of $230.98 billion and an enterprise value of $244.81 billion. It has a P/E of 16.3, a Price/Book of 3.3 and a Price/Sales of 2.5. David Herro (Trades, Portfolio), Tweedy Browne (Trades, Portfolio) Global Value, IVA International Fund (Trades, Portfolio), Wintergreen Fund (Trades, Portfolio), MS Global Franchise Fund (Trades, Portfolio) and Signature Select Canadian Fund (Trades, Portfolio) have shares of Nestle in their portfolios.
Nestle has been contending with a couple of issues lately. In the United States, Nestle, Walmart (WMT, Financial) and other companies have come under fire for reportedly bottling California water while the state has faced severe drought conditions. In India, food safety inspectors have filed criminal complaints against two officials of Nestle India after allegedly finding seven times the permissible level of lead during routine inspection of noodle packets.
DeVaulx sold part of his ninth-most valuable stake, Genting Malaysia Bhd (XKLS:4715), a Malaysian leisure and hospitality business covering theme parks, gaming, hotels, seaside resorts and entertainment. He sold 16,717,800 shares for an average price of RM4.06 per share. The sale had a -0.37% impact on de Vaulx’s portfolio.
Genting Malaysia has a market cap of $24.1 billion and an enterprise value of $21.93 billion. It has a P/E of 20.4, a Price/Book of 1.1.5 and a Price/Sales of 2.9. Steven Romick (Trades, Portfolio), IVA International Fund (Trades, Portfolio) and Wintergreen Fund (Trades, Portfolio) also have shares of Genting Malaysia in their portfolios.
De Vaulx also sold a portion of his 12th most-valuable stake, Cimarex Energy Co (XEC), an oil and gas exploration and production company with operations mainly in the American Southwest. DeVaulx sold 1,206,063 shares of Cimarex, more than half his stake, for an average price of $107.3 per share. The sale had a -2.46% impact on his portfolio.
Cimarex has a market cap of $10.13 billion and an enterprise value of $11.51 billion. It has a Price/Book of 2.5 and a Price/Sales of 4.5. Diamond Hill Capital (Trades, Portfolio), Columbia Wanger (Trades, Portfolio), First Pacific Advisors (Trades, Portfolio), FPA Capital Fund (Trades, Portfolio), Chuck Royce (Trades, Portfolio), Steven Cohen (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), George Soros (Trades, Portfolio), Jim Simons (Trades, Portfolio), T Boone Pickens (Trades, Portfolio) and Ken Fisher (Trades, Portfolio) have shares of Cimarex in their portfolios.
DeVaulx did add to one of his 10 most valuable stakes in the first quarter – DeVry Education Group Inc (DV). The sixth-most valuable stake in deVaulx’s portfolio, DeVry is an Illinois-based higher education institution, and deVaulx bought 1,415,040 shares for an average price of $38.8 per share. The purchase had a 0.93% impact on his portfolio.
DeVry has a market cap of $2.03 billion and an enterprise value of $1.63 billion. It has a P/E of 14.3, a Price/Book of 1.3 and a Price/Sales of 1.1. First Pacific Advisors (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Steven Cohen (Trades, Portfolio), FPA Capital Fund (Trades, Portfolio), Westport Asset Management (Trades, Portfolio). Private Capital (Trades, Portfolio), John Rogers (Trades, Portfolio), David Dreman (Trades, Portfolio), Jim Simons (Trades, Portfolio), John Hussman (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) have shares of DeVry in their portfolios. Columbia Wanger (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Chuck Royce (Trades, Portfolio) and Ron Baron (Trades, Portfolio) sold their stakes in the first quarter.
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