David Herro

David Herro Premium Guru

Last Update: 12-06-2016
Related: Oakmark Intl Small Cap

Number of Stocks: 57
Number of New Stocks: 2

Total Value: $23,086 Mil
Q/Q Turnover: 6%

Countries: USA GBR CHE FRA ITA JPN SWE NLD CAN DEU HKG AUS KOR
Details: Top Buys | Top Sales | Top Holdings  Embed:

David Herro' s Profile & Performance

Profile

David Herro has been a manager of the Oakmark International Fund (OAKIX) since 1992, the Oakmark International Small Cap Fund (OAKEX) since 1995 and the Oakmark Global Select Fund (OAKWX) since 2006. He is also the Chief Investment Officer for International Equities at Harris Associates, which he joined in 1992.

His career honors include being named Morningstar's International Stock Fund Manager of the Year in 2006 and International Stock Fund Manager of the Decade for 2000-09.

Mr. Herro has an M.A. in Economics from the University of Wisconsin-Milwaukee (1985) and a B.S. in Business/Economics from the University of Wisconsin-Platteville (1983).

Web Page:https://www.oakmark.com/oakmark/web/me.get?WEB.websections.show&OAKMARK_948

Investing Philosophy

1. Buy businesses that are trading at a significant discount to his estimate of the company's intrinsic value.

2. Invest with companies expected to grow shareholder value over time. Value investors can sometimes fall into the trap of buying a stock that is inexpensive for a reason—because the company just does not grow. He looks for good quality, growing businesses with positive free cash flow and intelligent investment of cash.

3. Invest with management teams that think and act as owners. He seeks out companies with management teams that understand the dynamics of per share value growth and are focused on achieving such growth. Stock ownership and incentives that align managements' interests with those of shareholders are key components of this analysis

Historical Allocation of Stock, Bonds, Cash

Total Holding History

Performance of Oakmark International Fund

YearReturn (%)S&P500 (%)Excess Gain (%)
2015-3.831.19-5.0
2014-5.4113.69-19.1
201329.3432.39-3.0
3-Year Cumulative17.7 (5.6%/year)52.3 (15.1%/year)-34.6 (-9.5%/year)
201229.221613.2
2011-14.072.11-16.2
5-Year Cumulative30.6 (5.5%/year)80.4 (12.5%/year)-49.8 (-7%/year)
201016.2215.061.2
200956.326.4629.8
2008-46.06-37-9.1
2007-0.515.49-6.0
200630.615.7914.8
10-Year Cumulative66.3 (5.2%/year)102 (7.3%/year)-35.7 (-2.1%/year)
200514.124.919.2
200419.0910.888.2
200338.0428.689.4
2002-8.46-22.113.6
2001-5.13-11.896.8
15-Year Cumulative171 (6.9%/year)107.5 (5%/year)63.5 (1.9%/year)
200012.5-9.121.6
199939.4721.0418.4
1998-7.0128.58-35.6
19973.3333.36-30.0
199628.0222.965.1
20-Year Cumulative423 (8.6%/year)381.4 (8.2%/year)41.6 (0.4%/year)
19958.3237.58-29.3
1994-9.061.32-10.4
199353.5810.0843.5
19920.437.62-7.2

Top Ranked Articles

Deeply Discounted, Solid European Banks David Herro Is Buying Value guru says they're gaining strength, able to withstand storms and wrongly priced
The threat of a British exit from the European Union has contributed to a drastic decline in prices for European financial stocks, and at least one value guru, Oakmark Funds’ David Herro (Trades, Portfolio), believes the sector is highly attractive, according to his interview Thursday on CNBC. Read more...
David Herro Comments on Konecranes Guru stock highlight
The top contributor for both the quarter and fiscal year was Konecranes (OHEL:KCR1V), a Finnish company that specializes in the manufacturing and servicing of cranes, such as workstation cranes, industrial cranes, and cranes for shipyards and ports, as well as other lifting equipment. The company produces one out of every ten of the world’s cranes, and it sells primarily to industrial companies and to harbors and shipyards around the world. In addition, Konecranes is a global leader in maintenance, inspection and repair services. Read more...
Bill Nygren and David Herro Comment on LafargeHolcim Guru stock highlight
LafargeHolcim (XSWX:LHN), the largest cement maker in the world, was the largest contributor to performance for the quarter, returning 30%. Shares reacted positively to news that LafargeHolcim agreed to sell Lafarge India for approximately $1.4B with proceeds going to pay down debt. We are impressed with the progress management has made on defining and implementing true synergies following the merger. Additionally, second quarter results exceeded expectations and illustrated Europe’s improving pricing environment. Management reaffirmed its 2016 outlook as well as its commitment to targets set for 2018. Read more...
David Herro Comments on Credit Suisse Guru stock highlight
Credit Suisse (NYSE:CS), a Swiss financial services group, was the largest detractor from performance for the fiscal year. Credit Suisse’s share price has been weak over the past year for multiple reasons. The company’s investment banking results have struggled, although we recognize that the underperformance is partially due to restructuring activity and we expect performance to strengthen once restructuring is complete. One-off expenses related to litigation, pension true-up charges and write-downs on certain credit assets also hurt performance. Additionally, the U.K.’s decision to leave the European Union negatively impacted the share price. Credit Suisse’s management has responded to these challenges with a series of restructuring measures. Its management has made progress expanding its wealth management franchise, which we believe is a good move since that business is fee based, requires little capital and has very good secular growth trends. Additionally, Credit Suisse has reduced its exposure to the global markets business, which has enabled it to de-risk its balance sheet and operate with a more efficient cost structure. Read more...
David Herro Buys 3 New International Stocks in Q4 The investor found market volatility a good time to buy
David Herro (Trades, Portfolio) is the manager of the Harris Associates’ Oakmark International Fund who has delivered 10 percent returns on average per year since its 1992 inception. In an update, he talked about some new additions to the fund’s portfolio in the fourth quarter: Grupo Televisa, SMFG and Wolseley. Read more...
» More David Herro Articles

Commentaries and Stories

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David Herro Comments on Hays Guru stock highlight
There was one new security purchased in the Fund this quarter. Hays (LSE:HAS), which is headquartered in the U.K., is a worldwide provider of permanent and temporary recruitment and human resource services, employing over 9,000 staff across 33 countries. Hays conducts its business across a wide range of industries, including accountancy and finance, construction, information technology, financial services, education and energy, and oil and gas, among others. More...

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David Herro Comments on Regus Guru stock highlight
One of the largest detractors for the quarter was another U.K.-based company, Regus (LSE:RGU), a global flexible workplace provider that serves more than two million customers in 2,800 locations across 900 cities in 106 countries. During the past quarter, the company released its results for the first half of 2016, which were ahead of estimates mainly due to better-than-expected benefits from reorganization. However, the company may be facing a couple of risk factors, including a recession in the U.K. that could reduce demand for office space, a correction in the U.K. real estate market and a weakening economic environment in Europe. On the positive side, the uncertainty in the marketplace could be a tailwind to flexible space providers and could help in rent negotiations, as well as in forming additional capital-light partnerships. The main reason for the decline in share price during the quarter was that Mark Dixon, the CEO and the largest shareholder of Regus, sold shares representing 4% of the company’s total issued ordinary shares. Our discussions with More...

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David Herro Comments on Countrywide Guru stock highlight
The largest detractor for the fiscal year was Countrywide (LSE:CWD), the U.K.’s largest real estate agency group. As we discussed in our last letter, businesses that were exposed to the U.K. real estate market were the prominent detractors to Fund performance in the second quarter. Following the Brexit vote in June 2016, Countrywide shares fell 30% by the close of the month. Since then, there has been a modest decline in real estate transactions outside of London and a larger decrease in London as consumers remain reluctant to make large, life-changing decisions in such an environment. The trading atmosphere has weakened over the past three to four months and has resulted in downward revisions to Countrywide’s near-term earnings estimates. However, in our view business value is not determined by what Countrywide will earn over the next 24 months, but rather the cash flow the business will generate over the next 50 years. We continue to believe the U.K.’s decision to exit the European Union has little long-term impact on the normalized levels of transactional More...

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David Herro Comments on Konecranes Guru stock highlight
The top contributor for both the quarter and fiscal year was Konecranes (OHEL:KCR1V), a Finnish company that specializes in the manufacturing and servicing of cranes, such as workstation cranes, industrial cranes, and cranes for shipyards and ports, as well as other lifting equipment. The company produces one out of every ten of the world’s cranes, and it sells primarily to industrial companies and to harbors and shipyards around the world. In addition, Konecranes is a global leader in maintenance, inspection and repair services. More...

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David Herro's Oakmark International Small Cap Fund 3rd Quarter Commentary Review of holdings and markets David Herro - David Herro's Oakmark International Small Cap Fund 3rd Quarter Commentary
The Oakmark International Small Cap Fund returned 7% for the fiscal year ended September 30, 2016, underperforming the MSCI World ex U.S. Small Cap Index, which appreciated 14% for the same period. For the recent quarter, the Fund returned 8%, slightly outperforming the MSCI World ex U.S. Small Cap Index, which returned 8% for the period. Since the Fund’s inception in November 1995, it has returned an average of 9% per year. More...

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David Herro's Oakmark Global Fund 3rd Quarter Commentary Review of quarter and holdings
An Atypical September Quarter More...

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Bill Nygren and David Herro Comment on General Electric Guru stock highlight
General Electric (NYSE:GE), a global producer of industrial, aviation and medical goods, was the biggest detractor for the quarter. While GE has benefited from improved margins and capital allocation, shares were weak during the quarter due to concerns over the company’s 2016 guidance. After producing organic growth of 1% in the first half, the company forecasts full-year organic growth between 2-4%. GE expects its Power division will drive this growth, with planned turbine shipments nearly double what they were in the first half of the year. The market appears to believe these forecasts are aggressive and expects GE management to reduce guidance when it next reports earnings. The timing of turbine shipments is essentially irrelevant to the value of the company, and our long-term investment thesis remains entirely intact. More...

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Bill Nygren and David Herro Comment on Credit Suisse Guru stock highlight
Credit Suisse (NYSE:CS), a Swiss financial services group, was the largest detractor from performance for the fiscal year. Credit Suisse’s share price has been weak over the past year for multiple reasons. The company’s investment banking results have struggled, although we recognize the underperformance is partially due to restructuring activity and we expect performance to strengthen once restructuring is complete. One-off expenses related to litigation, pension true-up charges and write-downs on certain credit assets also hurt performance. Additionally, the U.K.’s decision to leave the European Union negatively impacted the share price. Credit Suisse’s management has responded to these challenges with a series of restructuring measures. Its management has made progress expanding its wealth management franchise, which we believe is a good move since that business is fee based, requires little capital and has very good secular growth trends. Additionally, Credit Suisse has reduced its exposure to the global markets business, which has enabled it to de-risk its balance sheet and operate with a more efficient cost structure. More...

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Bill Nygren and David Herro Comment on Apache Guru stock highlight
The largest contributor to performance for the fiscal year was Apache (NYSE:APA), a global oil and gas exploration company, which returned 66%. Oil prices have been volatile over the past year, but have rebounded in 2016 thus far. Apache has specifically benefitted from solid quarterly results that have demonstrated improved capital efficiency, including a 45% decline in North American well costs compared to 2014 levels. The company also announced the discovery of a new resource play in the Permian Basin called “Alpine High.” Initial results indicate that Apache has discovered a high quality resource at a low cost. This increased our estimate of intrinsic value and also increased our confidence in management. In our view, Apache has the balance sheet and asset quality to survive continued volatility in oil and gas prices, and we like how the management team is preserving and growing per share value during the commodity price downturn. More...

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Bill Nygren and David Herro Comment on LafargeHolcim Guru stock highlight
LafargeHolcim (XSWX:LHN), the largest cement maker in the world, was the largest contributor to performance for the quarter, returning 30%. Shares reacted positively to news that LafargeHolcim agreed to sell Lafarge India for approximately $1.4B with proceeds going to pay down debt. We are impressed with the progress management has made on defining and implementing true synergies following the merger. Additionally, second quarter results exceeded expectations and illustrated Europe’s improving pricing environment. Management reaffirmed its 2016 outlook as well as its commitment to targets set for 2018. More...

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Bill Nygren Comments on MGM Resorts International Guru stock highlight
We believe there are many ways to achieve strong returns from an investment in MGM Resorts International. MGM (NYSE:MGM) is a recovery story, driven by improving supply and demand in Las Vegas where MGM has significant exposure. The company’s Profit Growth Plan, which is a cost-cutting and revenue enhancement program, should lead to higher profitability and allow for significant operating leverage once sales recover. From a longer term perspective, we believe MGM will benefit from its increasing geographic diversity, strong property development pipeline and improving capital structure. We think that valuing MGM on a property-by-property basis using cash flow multiples from recent transactions produces a much higher value than the current stock price indicates. More...

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David Herro Comments on Olympus Guru stock highlight
We also initiated a position in Olympus (TSE:7733), the Japanese camera and endoscopes company, during the quarter. We owned Olympus in the past and most recently sold our shares in February 2016 as it approached our estimate of intrinsic value. However, by mid-August the share price had fallen over 30%, and since our investment thesis was intact, we repurchased the name into the Fund. More...

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David Herro Comments on Royal Bank of Scotland Guru stock highlight
We initiated a position in Royal Bank of Scotland (NYSE:RBS), a U.K.-based commercial and retail bank, during the quarter after the share price plummeted on news that the U.K. had voted to leave the European Union. We believed the market had overreacted as shares of RBS fell nearly 40% in the two weeks following the announcement. We used the opportunity to purchase shares of the company at a significant discount to our estimate of intrinsic value. We believe RBS has a strong competitive position and a solid management team that has made tremendous strides in de-risking the business. The company’s historical earnings have been hurt by restructuring, litigation and other non-permanent items. While RBS was the quarter’s largest detractor, we expect a significant improvement in profitability and free cash flow in the quarters ahead. More...

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David Herro Comments on Credit Suisse Guru stock highlight
Credit Suisse (NYSE:CS), a Swiss financial services group, was the largest detractor from performance for the fiscal year. Credit Suisse’s share price has been weak over the past year for multiple reasons. The company’s investment banking results have struggled, although we recognize that the underperformance is partially due to restructuring activity and we expect performance to strengthen once restructuring is complete. One-off expenses related to litigation, pension true-up charges and write-downs on certain credit assets also hurt performance. Additionally, the U.K.’s decision to leave the European Union negatively impacted the share price. Credit Suisse’s management has responded to these challenges with a series of restructuring measures. Its management has made progress expanding its wealth management franchise, which we believe is a good move since that business is fee based, requires little capital and has very good secular growth trends. Additionally, Credit Suisse has reduced its exposure to the global markets business, which has enabled it to de-risk its balance sheet and operate with a more efficient cost structure. More...

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David Herro Comments on Glencore Guru stock highlight
Glencore (LSE:GLEN), one of the world’s largest mining companies and commodities traders, was the top contributor to performance for the fiscal period and the most recent quarter. Last year, concerns about weaker-than-expected demand for copper and other industrial metals in China drove down the price of the commodity and, along with it, Glencore’s share price. Investors also doubted the company’s ability to service its debt. However, we believed that the market was overreacting, and we used the opportunity to buy shares at what we found to be attractive prices. In the interim, Glencore’s management responded to the weakening share price by announcing an aggressive plan to reduce debt and capital expenditures as well as to sell non-core assets. In 2016, investors have reacted positively to the company’s progress in deleveraging its balance sheet and the sale of its non-core assets, as well as to price increases in three of Glencore’s four core commodities: zinc, coal and nickel. Our investment thesis for this company is intact, as we believe Glencore’s More...

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Bill Nygren and David Herro's Oakmark Global Select Fund 3rd Quarter Commentary Review of quarter and holdings Bill Nygren,David Herro - Bill Nygren And David Herro's Oakmark Global Select Fund 3rd Quarter Commentary
The Oakmark Global Select Fund returned 10% for the fiscal year ended September 30, 2016, underperforming the MSCI World Index, which returned 11% for the same period. For the most recent quarter, the Fund returned 10%, outperforming the MSCI World Index, which returned 5%. The Fund has performed well versus the MSCI World Index since inception, returning on average 7% versus 4% for the benchmark. More...

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David Herro's Oakmark International Fund 3rd Quarter 2016 Review of holdings and quarter David Herro - David Herro's Oakmark International Fund 3rd Quarter 2016
The Oakmark International Fund returned 7% for the fiscal year ended September 30, 2016, nearly matching the MSCI World ex U.S. Index, which returned just over 7%. For the most recent quarter, the Fund outperformed the MSCI World ex U.S. Index, returning 13% versus 6%. Additionally, the Fund has performed well versus the MSCI World ex U.S. Index since its September 1992 inception, returning an average of 9% versus 6% over the same period. More...

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Elliott Management Picks New Fight With Samsung Hedge fund seeks change with technology giant Paul Singer,David Herro,Bernard Horn,IVA Internati - Elliott Management Picks New Fight With Samsung
Paul Singer (Trades, Portfolio)’s Elliott Management is seeking change at Samsung Electronics Co. (XKRX:005930)(SSNLF). The American hedge fund is urging the company to reshape and simplify its ownership structure. More...

SAMSUNG, ELLIOTT MANAGEMENT, PAUL SINGER


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David Herro Buys Continental German auto parts manufacturer is a new holding David Herro - David Herro Buys Continental
David Herro (Trades, Portfolio) of Oakmark Funds acquired a new holding in the second quarter. It is with Continental AG (XTER:CON). More...

OAKMARK, HERRO, CONTINENTAL, AUTOMOTIVE, EUROPE


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Oakmark Adds to Stake in Taiwan Semiconductor Company has reported strong financial results over the previous 5 years David Herro - Oakmark Adds To Stake In Taiwan Semiconductor
The Oakmark International Fund led by guru David Herro (Trades, Portfolio) boosted its stake in Taiwan Semiconductor Manufacturing Co. (TPE:2330) during the second quarter. More...

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