David Herro

David Herro Premium Guru

Last Update: 11-19-2015
Related: Oakmark Intl Small Cap

Number of Stocks: 60
Number of New Stocks: 5

Total Value: $25,392 Mil
Q/Q Turnover: 17%

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 (%)
2014-5.4113.69-19.1
201329.3432.39-3.0
201229.221613.2
3-Year Cumulative58.1 (16.5%/year)74.6 (20.4%/year)-16.5 (-3.9%/year)
2011-14.072.11-16.2
201016.2215.061.2
5-Year Cumulative57.9 (9.6%/year)105.1 (15.5%/year)-47.2 (-5.9%/year)
200956.326.4629.8
2008-46.06-37-9.1
2007-0.515.49-6.0
200630.615.7914.8
200514.124.919.2
10-Year Cumulative97.4 (7%/year)109.4 (7.7%/year)-12 (-0.7%/year)
200419.0910.888.2
200338.0428.689.4
2002-8.46-22.113.6
2001-5.13-11.896.8
200012.5-9.121.6
15-Year Cumulative217 (8%/year)86.4 (4.2%/year)130.6 (3.8%/year)
199939.4721.0418.4
1998-7.0128.58-35.6
19973.3333.36-30.0
199628.0222.965.1
19958.3237.58-29.3
20-Year Cumulative489.1 (9.3%/year)554.6 (9.8%/year)-65.5 (-0.5%/year)
1994-9.061.32-10.4
199353.5810.0843.5
19920.437.62-7.2

Top Ranked Articles

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...
Auto Stocks Struggle Despite Strong Sales How the gurus are responding to declining prices
Despite record car sales over the past year, Wall Street is seeing auto stocks tank due to factors such as rising interest rates and the struggling Chinese economy, which is the largest market for automobiles. Read more...
David Herro Comments on Sugi Holdings Guru stock highlight
A top-performing stock for the quarter (and calendar year) was Japanese drugstore chain Sugi Holdings (TSE:7649). We met with the president of Sugi on a recent trip to Japan and discussed how growth remains solid, the returns are very good and the board is returning to what we believe is the right balance of independent outside members. Sugi’s management team plans to invest in store expansions and logistic centers, as well as to commit existing stores’ floor space to wellness initiatives that are gaining popularity in Japan. We remain pleased with Sugi’s ability to drive results and are confident that the leadership team will continue to increase overall value in order to benefit shareholders. Read more...
David Herro Comments on Baidu Guru stock highlight
Baidu (NASDAQ:BIDU), China’s largest Internet search engine that commands over 70% market share, was the top contributor for the quarter, returning 38%. Shares reacted positively to the company’s nine-month earnings release in October and to the company’s plans to combine their majority-controlled travel business Qunar with Ctrip. This important deal will combine the top two online travel sites in China and should lead to significantly lower subsidies and higher profitability. Additionally, the shareholder-focused management team announced a new $2 billion share repurchase program during the quarter. Finally, we believe that management’s significant investments in new businesses, such as online-to-offline services (e.g., food delivery, ride sharing, etc.), are masking the strength of the core search business, which continues to grow at a healthy rate and generates significant profits. For these reasons, we believe today’s valuation neither reflects the fair value of the company’s search business nor gives any credit for its many non-search businesses; Read more...
David Herro Comments on Prada Guru stock highlight
Prada (HKSE:01913), the Italian fashion and luxury goods brand, was a top detractor for the quarter, declining 19%. The company reported fiscal third-quarter results that disappointed investors, as revenue and earnings figures fell short of analysts’ expectations. Sales in China, particularly of leather goods, continued to decline, and the company has struggled to find the right product offering to generate top-line growth. Management believes that Chinese customers are transitioning from just wanting global products found in the West to wanting bespoke products. The company’s plans to tailor clothing by geographic region should appeal to Chinese consumers, whose propensity toward travel should help them be aware that these products are exclusive to them. Prada’s lean and efficient distribution network will enable the company to move new product offerings from the design stage to the retail floor quickly—approximately four to five weeks’ time. We think that while Prada may face some short-term obstacles, its long-term outlook is promising and it Read more...
» More David Herro Articles

Commentaries and Stories

  • Currently 5.00/5

Rating: 5.0/5 (1 vote)

David Herro Buys 3 New International Stocks in Q4 The investor found market volatility a good time to buy David Herro - David Herro Buys 3 New International Stocks In Q4
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. More...

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Rating: 0.0/5 (0 votes)

International Investing Guru David Herro Is Finding Great Opportunities Herro talks with CNBC about his investing ideas David Herro - International Investing Guru David Herro Is Finding Great Opportunities
David Herro (Trades, Portfolio) thinks it is time to be buying stocks. More...

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Auto Stocks Struggle Despite Strong Sales How the gurus are responding to declining prices David Tepper, David Herro - Auto Stocks Struggle Despite Strong Sales
Despite record car sales over the past year, Wall Street is seeing auto stocks tank due to factors such as rising interest rates and the struggling Chinese economy, which is the largest market for automobiles. More...

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Herro: This Is the Time for Patient Investors Oakmark portfolio manager on current opportunities and Chinese market David Herro - Herro: This Is The Time For Patient Investors
David Herro (Trades, Portfolio), portfolio manager for the Oakmark International Fund, appeared on Bloomberg yesterday and confirmed that as the markets continue from its worst start to a year, it is the perfect time for patient investors to profit from the panic. More...

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Rating: 5.0/5 (1 vote)

David Herro Comments on Treasury Wine Estates Guru stock highlight
Treasury Wine Estates (ASX:TWE) (Australia), the world’s largest listed wine company, also significantly contributed to performance for the year (and quarter). As we indicated in our last letter, the company reported what we consider strong fiscal-year results in August, and they successfully resolved inventory issues in North America, allowing management to focus on growing the business. As a result, during the fourth quarter, the company announced they were acquiring wine assets from Diageo in the U.S. and Europe. The U.S. business acquired was the primary motivation for the deal. That acquisition brings a large inventory of wine, more than half of which comes from luxury and masstige grapes that generate 83% of the revenue in the U.S. These cases were sold under a number of brands that will also transfer to Treasury, and the company can now additionally use some of that high quality fruit to blend into its existing brands and expand capacity and margin. Another appeal of the U.S. business is that it is capital-light, as Treasury will own only 2% of the More...

  • Currently 0.00/5

Rating: 0.0/5 (0 votes)

David Herro Comments on Sugi Holdings Guru stock highlight
A top-performing stock for the quarter (and calendar year) was Japanese drugstore chain Sugi Holdings (TSE:7649). We met with the president of Sugi on a recent trip to Japan and discussed how growth remains solid, the returns are very good and the board is returning to what we believe is the right balance of independent outside members. Sugi’s management team plans to invest in store expansions and logistic centers, as well as to commit existing stores’ floor space to wellness initiatives that are gaining popularity in Japan. We remain pleased with Sugi’s ability to drive results and are confident that the leadership team will continue to increase overall value in order to benefit shareholders. More...

  • Currently 0.00/5

Rating: 0.0/5 (0 votes)

David Herro Comments on Prada Guru stock highlight
Prada (HKSE:01913), the Italian fashion and luxury goods brand, was a top detractor for the quarter, declining 19%. The company reported fiscal third-quarter results that disappointed investors, as revenue and earnings figures fell short of analysts’ expectations. Sales in China, particularly of leather goods, continued to decline, and the company has struggled to find the right product offering to generate top-line growth. Management believes that Chinese customers are transitioning from just wanting global products found in the West to wanting bespoke products. The company’s plans to tailor clothing by geographic region should appeal to Chinese consumers, whose propensity toward travel should help them be aware that these products are exclusive to them. Prada’s lean and efficient distribution network will enable the company to move new product offerings from the design stage to the retail floor quickly—approximately four to five weeks’ time. We think that while Prada may face some short-term obstacles, its long-term outlook is promising and it More...

  • Currently 5.00/5

Rating: 5.0/5 (1 vote)

David Herro Comments on Baidu Guru stock highlight
Baidu (NASDAQ:BIDU), China’s largest Internet search engine that commands over 70% market share, was the top contributor for the quarter, returning 38%. Shares reacted positively to the company’s nine-month earnings release in October and to the company’s plans to combine their majority-controlled travel business Qunar with Ctrip. This important deal will combine the top two online travel sites in China and should lead to significantly lower subsidies and higher profitability. Additionally, the shareholder-focused management team announced a new $2 billion share repurchase program during the quarter. Finally, we believe that management’s significant investments in new businesses, such as online-to-offline services (e.g., food delivery, ride sharing, etc.), are masking the strength of the core search business, which continues to grow at a healthy rate and generates significant profits. For these reasons, we believe today’s valuation neither reflects the fair value of the company’s search business nor gives any credit for its many non-search businesses; More...

  • Currently 5.00/5

Rating: 5.0/5 (1 vote)

David Herro's Oakmark International Small Cap Fund 4th Quarter Commentary Reflections on market and holdings David Herro,Oakmark International Small Cap Fund - David Herro's Oakmark International Small Cap Fund 4th Quarter Commentary
The Oakmark International Small Cap Fund returned 2% for the quarter ended December 31, 2015, underperforming the MSCI World ex U.S. Small Cap Index, which returned 6% for the same period. For the year ended December 31, the Fund was up 1% while the MSCI World ex U.S. Small Cap Index returned 5%. 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 International Fund 4th Quarter Commentary Reflections on the market and holdings David Herro - David Herro's Oakmark International Fund 4th Quarter Commentary
The Oakmark International Fund returned 5% for the quarter ended December 31, 2015, outperforming the MSCI World ex U.S. Index, which returned 4% over the same period. The Fund’s calendar year performance was weak in absolute and relative terms, declining 4% versus the MSCI World ex U.S. Index’s loss of 3%. Most importantly, the Fund has returned an average of 10% per year since its inception in September 1992, outperforming the MSCI World ex U.S. Index, which has averaged 6% per year over the same period. More...

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David Herro Buys Stake in Baidu in 3rd Quarter Guru raises stake in Glencore, reduces stake in Nestle David Herro - David Herro Buys Stake In Baidu In 3rd Quarter
David Herro (Trades, Portfolio) of Oakmark International Fund looks for investment opportunities that are trading below intrinsic value, are expected to grow shareholder value and have management teams that think and act as owners would. His approach endured some setbacks in 2014 but enjoyed returns in excess of 20% in the preceding years. More...

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Oakmark Invests in Finnish Machinery Company, British Investment Company Guru adds to stakes in companies providing laboratory services David Herro - Oakmark Invests In Finnish Machinery Company, British Investment Company
A quarterly peek into Oakmark Intl. Small Cap’s portfolio is like seeing a snapshot of global business activity for that time period. No single region or country tends to stand out – unless you look at the numbers, which could be reacting to or anticipating events outside the marketplace. More...

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David Herro's Interview With Barron's Guru addresses undervalued global giants David Herro - David Herro's Interview With Barron's
David Herro (Trades, Portfolio) of Oakmark International Fund sat down and did an interview with Barron's. During the interview Herro addressed undervalued global giant companies. He also discussed how Baidu (NASDAQ:BIDU), Richemont (NYSE:CFR) and Credit Suisse (NYSE:CS) are undervalued and offering great long-term value. More...

DAVID HERRO,GLOBAL,VALUE INVESTING,OAKMARK INTERNATIONAL,


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Not All Emerging Markets Are Created Equal International investing guru David Herro has some stock picks for you David Herro - Not All Emerging Markets Are Created Equal
Is it time to jump on emerging markets that are showing signs of life? More...

David Herro,stock picks


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Bill Nygren and David Herro Comments on General Electric Guru stock highlight
We added one new name to the Fund during the quarter: General Electric (NYSE:GE), the global producer of industrial, household and medical goods. GE is a company with businesses we have always admired, but we have previously questioned the stock’s valuation and management’s focus on returns when making capital allocation decisions. However, the appointment of a new CFO in mid-2013 ushered in significant changes. Since then, GE has, in our view, acquired assets cheaply (Alstom) and sold assets at good prices (Synchrony and its appliances division). GE is also significantly reducing its financial services business to focus on those lending activities that are core to its industrial products. The company has totally revamped its variable compensation plan for thousands of employees, emphasizing factors that drive return on invested capital, which should boost future results. Some investors may have a stale opinion of GE after the past 15 years of persistent underperformance, but we believe the remaining businesses will grow in excess of global GDP with high returns More...

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Rating: 5.0/5 (1 vote)

Bill Nygren and David Herro Comments on CNH Industrial Guru stock highlight
Another large detractor from performance for the quarter was CNH Industrial (NYSE:CNHI) (Netherlands), a manufacturer of agricultural and construction equipment. CNH Industrial’s fiscal first-half revenue decline of 22% (-11% in constant currency) was larger than we estimated, as revenues dropped across segments. Earnings and margins also dropped more substantially than we expected. The core agriculture segment was the driving force behind these poor results as demand for tractors and combines fell across all geographies. In response, management reduced agriculture equipment production by 33% in the second quarter year-over-year. Conversely, the Iveco segment performed better than we anticipated, as revenue declined less than our forecasts (and gained 9% in constant currency) while margins expanded. Management updated full-year guidance with a reduced operating profit margin (to a range of 5.6%-6% owing to production cuts) and unchanged sales projections. Management continues to cut costs across the board, and in light of very challenging market conditions, we believe CNH Industrial’s leadership team is executing relatively well. More...

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Bill Nygren and David Herro Comments on Apache Guru stock highlight
The largest detractor from performance for the quarter and past twelve months was Apache (NYSE:APA), the U.S.-based oil and gas exploration and production company. As with most oil and gas exploration companies, Apache’s share price is influenced by the direction of oil prices, which have fallen dramatically and remain low. Our assessment of Apache’s business value is based on the belief that the long-term market clearing oil price is in the mid-$70s. While a decline in near-term commodity prices reduced our estimate of value due to lost interim cash flows, the stock’s decline has significantly exceeded what we think is the true change in the company’s underlying business value. Despite a challenging energy market, we believe the management team has a solid plan for the future, as CEO John Christmann recently changed the company’s capital allocation process to better direct capital to the highest internal rate of return projects, regardless of where they are located. In addition, Christmann replaced the operating heads of each region, changing their compensation metrics to focus on returns. In our view, these improvements More...

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Bill Nygren and David Herro Comments on Google Guru stock highlight
Another positive contributor to performance for the quarter was Google (NASDAQ:GOOGL) (U.S.), the leading Internet search engine. Google delivered a positive second-quarter earnings report that beat market expectations. We were pleased to see that aggregate paid clicks were up 18% and that paid clicks on Google websites were up 30%. Investors were encouraged by CFO Ruth Porat’s favorable comments on “balance sheet efficiency” and “maximizing shareholder value,” which reaffirm to us that CEO Larry Page is serious about running Google with shareholders in mind. We continue to believe that Google enjoys a very strong tailwind as advertising continues to move online. More...

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David Herro Comments on Melco International Development Guru stock highlight
Sluggish gaming activity, primarily in Macau, continued to plague Melco International Development (HKSE:00200) (Hong Kong), the holding company that owns more than one-third of Melco Crown Entertainment in addition to other casino gaming and tourism assets. It was the largest detractor to performance for the fiscal year ended September 30. In July, Macau eased visa restrictions for visitors from mainland China, making it easier for tourists to access its gaming facilities, but gaming revenues have stayed depressed. We remain optimistic on Macau’s long-term prospects due to the increasing wealth of Chinese citizens and the large infrastructure projects that should help facilitate Macau’s growth. More...

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David Herro Comments on Dorma+Kaba Holdings Guru stock highlight
Dorma+Kaba Holdings (XSWX:DOKA) (Switzerland) was the largest contributor to the fiscal year ended September 30. Kaba reported strong operational results during the year as it benefited from an improving macro backdrop in Europe. Additionally, recent investments in new product development resulted in market share gains. Kaba recently completed a transformational merger with Germany-based Dorma Group. We believe the businesses are complementary, combining Kaba’s historical strength in access control with Dorma’s strength in doors. Together they are one of the largest global companies specializing in security and building-access solutions, commanding a sizable geographic footprint and a substantial research and development budget. More...

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