Wintergreen Fund (Trades, Portfolio) takes a global approach when seeking companies to invest in. The firm looks for the most attractive prices on the market while also doing extensive research on the company and its management. The firm looks at qualities such as a company's market value in relation to book value, cash flow, as well as earnings.
Wintergreen's portfolio consists primarily of stocks in the Consumer Defensive sector, which makes up 34.5% of the portfolio. Next is Consumer Cyclical, which is 22.6% and third is Real Estate at 12.3%.
The portfolio has a total of 28 stocks that have a total value of $897 million and a 1% quarter over quarter turnover, which indicates that the firm does not add or sell new positions often.
Here's a look at the firm's top three most heavily weighted stocks:
Reynolds American Inc (RAI, Financial)
RAI makes up 9.09% of Wintergreen's portfolio and 0.22% of the company's shares outstanding. The firm owns 1,183,33 shares valued at $81,543,000.
Reynolds is a manufacturer of cigarettes and other tobacco products in the United States and was incorporated in 2004.
At the end of May, U.S. antitrust regulators blessed the $7.1 billion deal between Reynolds and Lorillar, which are two of the top three largest cigarette companies in the country. This deal gives Reynolds ownership of Camel, Newport and Paul Mall, as well as a market share of 34%.
RAI is currently trading at $75.85 a share with a 3 star out of 5 business predictability rating. According to the DCF calculator, its intrinsic value is $32.04, which indicates the stock may currently be overvalued.
Earnings per share for the trailing twelve months as of March 2015 was $2.81. One warning sign investors should be cautious of is the current P/E ratio is 26.77, which is close to its 10-year high of 27.9.
Canadian Natural Resources Ltd (TSX:CNQ, Financial)
CNQ makes up 8.33% of the firm's overall portfolio with 2,439,392 shares valued at $74,768,000.
Canadian Natural Resources is an independent energy company that acquires, explores, develops, produces, sells and markets crude oil. The company was incorporated in 1973 as AEX Minerals Corporation and changed its name two years later to what it currently is today.
According to the Peter Lynch earnings line, the stock's intrinsic value is $47.70, which is higher than its current trading price of $38.38. Thus, the stock may currently be undervalued.
EBITDA per share for the trailing twelve months as of March 2015 was $8.36 and its growth rate over the past year was 6.10%. Within the last 10 years, the company's growth rate was 7.50% a year.
British American Tobacco PLC (LSE:BATS, Financial)
BATS consists of 8.3% of Wintergreen's overall portfolio with 1,438,533 shares valued at $74,441,000.
British American Tobacco is a holding company that owns investments in various companies constituting the British American Tobacco Group of companies. The company was incorporated in 1997.
According to recent reports, BATS is buying TDR d.o.o. –Â an independent cigarette manufacturer –Â along with other tobacco and retail assets from Adris Grupa d.d. for a value of €550 million.
The stock is currently trading at £36.06 a share and has a 3 out of 5 star business predictability rating. According to the DCF calculator, BATS has an intrinsic value of £20.97 and a margin of safety of -72%.
One warning sign investors should be aware of is the P/E ratio of 21.64, which is currently close to its 10-year high of 22.91.
For more information on Wintergreen Fund (Trades, Portfolio)'s portfolio, click here.
