Bernard Horn (Trades, Portfolio) of Polaris Global Value Fund added to seven positions in the portfolio in the second quarter. The top five were his most noteworthy transactions; the top four were British-based homebuilding companies.
City A.M., a London-based, business-oriented publication, reported this week that, while homebuilders struggled initially after June’s Brexit vote, most have been thriving recently.
The most significant add of the quarter was the purchase of 95,700 shares in York, England-based Persimmon PLC (LSE:PSN, Financial). The shares, which were purchased for an average price of 19.6 British pounds ($25.89 in U.S. currency) per share, represented an increase in the position of more than 65%. The transaction had a 0.53% impact on the portfolio.
Persimmon reported a strong second quarter and told the Newcastle Chronicle that customer interest has been “robust” since the Brexit vote.
The holding, now 242,176 shares, is 0.08% of Persimmon’s outstanding shares and 1.35% of the guru’s total assets. The guru is Persimmon’s only shareholder among the gurus.
Persimmon has a price-earnings (P/E) ratio of 10.5, a forward P/E of 9.8, a price-book (P/B) ratio of 2.5 and a price-sales (P/S) ratio of 2. GuruFocus gives Persimmon a Financial Strength rating of 9/10 and a Profitability and Growth rating of 8/10 with return on equity (ROE) of 24.47% that is higher than 87% of the companies in the Global Residential Construction industry and return on assets (ROA) of 15.24% that is higher than 92% of the companies in that industry.
Persimmon sold for 18.83 pounds per share at market close Friday. The DCF Calculator gives Persimmon a fair value of 19.26 pounds with a 2% margin of safety.
The guru increased the position in London-based Taylor Wimpey PLC (LSN:TW., Financial) by more than 56% with the acquisition of 952,400 shares for an average price of 1.82 pounds per share. The deal had a 0.49% impact on the portfolio.
Because of lower mortgage rates, International Business Times wrote this week that Taylor Wimpey is “well-positioned to take advantage of any resilience in new home sales.”
The stake is now 2,648,290, which is 0.08% of Taylor Wimpey’s outstanding shares and 1.35% of the guru’s total assets. The guru is Taylor Wimpey’s only shareholder among the gurus.
Taylor Wimpey has a P/E of 10, a forward P/E of 9.4, a P/B of 2 and a P/S of 1.7. GuruFocus gives Taylor Wimpey a Financial Strength of 7/10 and a Profitability and Growth of 8/10 with ROE of 20.01% that is higher than 84% of the companies in the Global Residential Construction industry and ROA of 11.18% that is higher than 88% of the companies in that industry.
Taylor Wimpey sold for 1.64 pounds per share Friday. The DCF Calculator gives Taylor Wimpey a fair value of 1.71 pounds with a 4% margin of safety.
The guru hiked the holding in Barratt Developments (LSE:BDEV, Financial), based in Coalville, England, by more than 56% with the purchase of 306,374 shares for an average price of 5.37 pounds per share. The transaction had a 0.48% impact on the portfolio.
Barratt recently raised more than 20,000 pounds for The Brain Tumour Charity’s research and awareness-raising efforts.
The position, now 853,227 shares, is 0.09% of the company’s outstanding shares and 1.33% of the guru’s total assets. The guru is Barratt’s only shareholder among the gurus.
Barratt has a P/E of 9.4, a forward P/E of 8.9, a P/B of 1.3 and a P/S of 1.3. GuruFocus gives Barratt a Financial Strength rating of 7/10 and a Profitability and Growth rating of 8/10 with ROE of 14.33% that is higher than 74% of the companies in the Global Residential Construction industry and ROA of 9.10% that is higher than 83% of the companies in that industry.
Barratt sold for 4.99 pounds per share Friday. The DCF Calculator gives Barratt a fair value of 5.56 pounds with a 10% margin of safety.
The guru boosted the position in Bellway PLC (LSE:BWY, Financial), a Newcastle, England-based company, by nearly 48% with the acquisition of 57,800 shares for an average price of 24.93 pounds per share. The deal had a 0.42% impact on the portfolio.
The position, now 179,436 shares, is 0.15% of Bellway’s outstanding shares and 1.31% of the guru’s total assets. The guru is Bellway’s only shareholder among the gurus.
Bellway has a P/E of 8.5, a forward P/E of 7.2, a P/B of 1.7 and a P/S of 1.6. GuruFocus gives Bellway a Financial Strength rating of 7/10 and a Profitability and Growth rating of 8/10 with ROE of 21.56% that is higher than 85% of the companies in the Global Residential Construction industry and ROA of 14.60% that is higher than 92% of the companies in that industry.
Bellway sold for 23.63 pounds per share Friday. The DCF Calculator gives Bellway a fair value of 29.54 pounds with a 20% margin of safety.
The guru added 600 shares to the holding in Samsung Electronics Co. Ltd. (XKRX:005930, Financial), a South Korean consumer electronics company, for an average price of 1,321,290 South Korean won ($1,181.10 in American money) per share. The acquisition was an increase of nearly 15% to the position and had an impact of 0.21% on the portfolio.
The holding, now 4,661 shares, is 1.67% of the guru’s total assets. David Herro (Trades, Portfolio) is Samsung’s leading shareholder among the gurus with 325,000 shares. The position is 0.23% of Samsung’s outstanding shares and 1.82% of Herro’s total assets.
Samsung has a P/E of 12.6, a forward P/E of 2.7, a P/B of 1.5 and a P/S of 1.5. GuruFocus gives Samsung a Financial Strength rating of 8/10 and a Profitability and Growth rating of 8/10 with ROE of 10.75% that is higher than 71% of the companies in the Global Consumer Electronics industry and ROA of 8.80% that is higher than 84% of the companies in that industry.
Samsung sold for 1,612,000 won per share Friday. The DCF Calculator gives Samsung a fair value of 3,081,667.38 won with a 48% margin of safety.
Horn also added to his stakes in BBA Aviation PLC (LSE:BBA) and Greencore Group PLC (LSE:GNC) in the second quarter.
Disclosure: I own no shares in any of the stocks mentioned in this article.
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