Oakmark’s David Herro (Trades, Portfolio) added two new holdings and divested another during the first quarter.
Seeking value in international companies trading at a discount to their estimated intrinsic values, Herro invests in securities with good growth potential and shareholder-friendly management. His current portfolio consists of 61 stocks valued at $28.3 billion. The Oakmark International Fund manager established stakes in Volvo AB (OSTO:VOLV B) and Publicis Groupe SA (XPAR:PUB, Financial) during the quarter.
Herro purchased 26.6 million shares of Volvo for an average price of 118.2 Swedish krona ($13.63) per share, giving it 1.4% portfolio space.
The Swedish truck manufacturer has a market cap of 596.7 billion krona; its shares were trading around 146.9 krona on Monday with a price-earnings (P/E) ratio of 22.8, a price-book (P/B) ratio of 2.9 and a price-sales (P/S) ratio of 1.3.
The Peter Lynch chart below shows the stock is trading above its fair value.
GuruFocus ranked Volvo’s financial strength 5 of 10 and its profitability and growth 6 of 10. The trailing dividend yield and forward dividend yield are both 2.21%.
With his purchase, Herro became Volvo’s largest guru shareholder with 1.3% of outstanding shares. Bestinfond (Trades, Portfolio) also holds the stock.
Having previously exited his Publicis stake in third-quarter 2015, Herro bought 5.55 million shares for an average price of 63.78 euros ($71.75) per share, expanding the portfolio 1.37%.
The French advertising and marketing company has a market cap of 14.9 billion euros; its shares were trading around 68.31 euros on Monday with a P/E ratio of 16.6, a P/B ratio of 2.5 and a P/S ratio of 1.6.
According to the Peter Lynch chart below, the stock is trading slightly above its fair value.
GuruFocus ranked Publicis’ financial strength 5 of 10 and its profitability and growth 7 of 10. The trailing dividend yield is 2.3%, and the forward dividend yield is 2.7%.
Herro is also the largest shareholder of Publicis among the gurus with 2.5% of outstanding shares. The Invesco European Growth Fund (Trades, Portfolio) also owns shares.
Herro exited his stake in Noruma Holdings Inc. (TSE:8604, Financial) during the quarter, selling his remaining 5.9 million shares for an average price of 725.95 yen ($6.57) per share. He established the position in second-quarter 2015 and added to it for the next three quarters, reaching a total of 191.1 million shares. In third-quarter 2016, he began to reduce the holding. The trade had an impact of -0.14% on the portfolio.
The Japanese financial services company has a market cap of 2.5 trillion yen; its shares were trading around 698 yen on Monday with a P/E ratio of 10.6, a P/B ratio of 0.9 and a P/S ratio of 1.8.
Based on the Peter Lynch chart below, the stock appears to be trading below its fair value.
GuruFocus ranked Noruma’s financial strength 5 of 10 and its profitability and growth 3 of 10. The trailing dividend yield is 2.8% and the forward dividend yield is 2.6%.
Prior to exiting the position, Herro was the only shareholder among the gurus.
Herro also increased multiple positions during the quarter, including Hennes & Mauritz AB (OSTO:HMB, Financial), Safran SA (XPAR:SAF, Financial) and Infosys Ltd. (BOM:500209). Reduced positions include Prada SpA (HKSE:01913), Daiwa Securities Group Inc. (TSE:8601), Kering SA (XPAR:KER) and Ashtead Group PLC (LSE:AHT).
Disclosure: I do not own any stocks mentioned in the article.
