During the fourth quarter, the Polaris Global Value Fund led by Bernard Horn (Trades, Portfolio) purchased two new holdings and closed out four positions, including three in the oil industry.
In the fourth quarter commentary, Horn cited the impact of commodity price declines that caused the fund to adjust its holdings and sell its stakes in Tullow Oil (LSE:TLW, Financial), Marathon Oil (MRO, Financial) and Maurel et Prom (XPAR:MAU, Financial).
The sale of the Marathon Oil holding had the largest impact on the portfolio. The fund sold 179,682 shares for an average $16.80 per share. The natural gas and oil sands mining company has seen its stock plunge 56% in the past year.
The fund purchased 104,600 shares of WESCO International (WCC, Financial) for an average price of $46.58 per share. Polaris had closed out a prior holding in the company in the second quarter 2011. WESCO provides electrical, industrial and communications maintenance.
The stock has dropped 28% over the past year and is trading at almost 12x earnings. The Peter Lynch earnings line points to $62.50, estimating the company is undervalued.
WESCO had EPS of $1.03 during the fourth quarter, down from $1.40 in the year-ago quarter. Over the past five years, earnings have grown at an average annual rate of 11%.
Polaris also bought 1,200 shares of Samsung Electronics (LSE:SMSN, Financial)for an average $552.69 per share. Over the past year, the stock price has declined 22% and is undervalued according to the Peter Lynch earnings line.
During the fourth quarter, the Global Value Fund returned 4.99%, slightly lagging the MSCI World Index at 5.5%. Horn pointed out that the best performance came from holdings in consumer staples, financials and information technology.
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