David Herro

David Herro Premium Guru

Last Update: 02-25-2015
Related: Oakmark Intl Small Cap

Number of Stocks: 57
Number of New Stocks: 1

Total Value: $26,961 Mil
Q/Q Turnover: 5%

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 On Banco Santander
David Herro of Oakmark commented on the European situation earlier this month. In particular, he has the following assessment for Spain’s Banco Santander (STD):Using this approach allows us to add good quality businesses at attractive price points to our portfolios. An example of this tactic is our investment in the Spanish bank, Banco Santander. This bank has been on our radar for a long time and, in our view, Banco Santander ranks among the highest quality global financial firms that exist today. Some attributes that have led to this assessment are: Read more...
David Herro: Hard to Believe Japan Selloff Is Real Value Lost
David Herro manages Oakmark International and he was named Morningstar’s Fund Manager of the Decade last year. Apparently his fund owns some Japanese names, and the recent market action there does not bore well for his fund. Read more...
David Herro on Where to Invest Now
David Herro, portfolio manager of the Oakmark International Fund, tells CNBC where he's putting his money to work now. Read more...
Oakmark Buys More Shares of Its Worst Performing Stocks
Oakmark, a long-term focused value investment firm, increased its holdings in what it called its “top detractors” -- stocks whose prices dropped -- of its international fund in the second quarter. Oakmark International underperformed the S&P benchmark with a -1% return this year through mid-September. Managers, however, viewed the short-term dip as an opportunity to buy more stocks it considers good values at even better prices. Read more...
The 3 New Buys of New Guru David Herro, International Fund Manager
A new member of GuruFocus’ list of Gurus, David Herro leads the Oakmark International Fund (OAKIX), which just celebrated its 20th anniversary, at the same firm with fellow Guru Bill Nygren, The Oakmark Funds. Herro has an M.A. in economics from the University of Wisconsin-Milwaukee and was named Morningstar’s International Stock Fund Manager of the decade from 2000 to 2009. Read more...
» More David Herro Articles

Commentaries and Stories

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David Herro Comments on Melco Crown Entertainment
An additional detractor for the quarter was Melco Crown Entertainment (MPEL) (Hong Kong), which is a developer and owner of casino gaming and entertainment resort facilities in Asia. Casino revenues in Macau were weak due to China’s anti-corruption campaign, difficult year-over-year comparisons and a weaker macro environment. Although we continue to monitor the market, we remain optimistic about Macau’s long-term prospects, given low penetration of Chinese visitors, continued wealth creation of Chinese citizens and large infrastructure projects, which should help facilitate the growth of Macau. More...

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David Herro Comments on CIE FINANCIERE RICHEMONT SA
Richemont (XSWX:CFR) (Switzerland), the world’s second-largest luxury goods company, was the quarter’s biggest detractor, falling 10%. Richemont’s stock price fell after its fiscal nine-month sales update, which indicated a slow third quarter. Thus, even though the company’s organic sales grew 2% for the full period, they still fell short of our forecast. Sales declined most in Hong Kong/Macau and in the company’s specialty watch unit, both of which generate margins greater than the group’s average. Even so, sales in Europe and the Americas increased 9% and 7%, respectively, which we see as encouraging. We expect Richemont’s near-term results will be negatively impacted by the stronger Swiss franc, as most of its watch manufacturing costs are denominated in francs while much of its revenues are not. However, the company’s brands have pricing power, and management has already announced mid-single-digit price increases in Europe. Moves like these should offset some of the currency exchange rate volatility. While Richemont is facing some short-term headwinds, we believe the long-term growth prospects remain intact. From More...

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David Herro Comments on Daimler AG
Another top contributor for the quarter was Daimler (XTER:DAI) (Germany), the global auto manufacturer of the Mercedes brand, which returned 15%. Daimler reported full-year 2014 unit sales of 2.5 million vehicles (its best unit-sales year ever), which resulted in a 10% revenue increase and a 38% increase in underlying Industrial earnings. The company’s largest division, Mercedes-Benz, continued its strong performance (14% revenue growth and 10% unit growth year-over-year along with improved margins), driven by strong performance in China, robust S-Class model sales and the launch of the new C-Class model. Overall, the results were as we expected, and management predicts these positive trends will continue in 2015. More...

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David Herro Comments on Intesa Sanpaolo
Intesa Sanpaolo (MIL:ISP), an Italian retail and commercial bank, was the top contributor for the quarter, returning 16%. Intesa’s fiscal-year results showed core revenue growth of 7%. We found these results impressive for an Italian bank, given that Italian GDP hasn’t been growing, there is low banking penetration and the household savings rate is high. We believe Intesa’s performance reflects management’s focus on growing fee-based businesses. Asset quality continues to improve with non-performing loan formation at its lowest level since 2011, down 22% year-over-year, and management expects it to fall even further in 2015. Intesa’s balance sheet remains very strong with a leverage ratio around 7%, one of the best in Europe, and its liquidity far exceeds requirements. Management has also announced a dividend increase, which will return additional capital to shareholders in 2015. We believe Intesa has a strong position and will continue to provide value for our shareholders. More...

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David Herro Comments on Melco International Development
The Fund’s largest detractor for the quarter was Melco International Development (HKSE:00200) (Hong Kong), which is a developer and owner of casino gaming and entertainment resort facilities in Asia. Casino revenues in Macau were weak due to China’s anti-corruption campaign, difficult year-over-year comparisons and a weaker macro environment. Although we continue to monitor the market, we remain optimistic about Macau’s long-term prospects, given low penetration of Chinese visitors, continued wealth creation of Chinese citizens and large infrastructure projects, which should help facilitate the growth of Macau. More...

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David Herro Comments on Michael Page International PLC
Even with high unemployment rates, staffing companies have maintained acceptable earnings due to strong demand and pricing despite market fears. Michael Page (LSE:MPI) particularly benefited from improved sentiment in Europe and a growing sense that hiring activity will increase. Because of the company’s high exposure to the more volatile permanent placement market, its earnings are especially sensitive to increased hiring trends. During 2014 Michael Page reported a respectable 15% year-over-year increase in EBIT. We expect the rate of EBIT growth to accelerate further in the coming years due to continued growth in hiring activity as well as Michael Page’s productivity improvements, driven by a new IT system. More...

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David Herro's Oakmark International Fund 1Q 2015 Letter
The Oakmark International Fund returned 7% for the quarter ended March 31, 2015, outperforming the MSCI World ex U.S. Index, which returned 4% over the same period. Most importantly, the Fund has returned an average of 11% 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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It Is A Good Time To Own Select European Banking Stocks – International Investing Star David Herro
European Bank valuations trail those of their U.S. peers, but do they present too much risk to be attractive? More...

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Exclusive: 20 Questions With Bill Nygren Coming Soon to GuruFocus Bill Nygren,David Herro - Exclusive: 20 Questions With Bill Nygren Coming Soon To GuruFocus
We recently had the opportunity to interview Oakmark International Fund's David Herro, which was conducted by Sheila Dang. Although we appreciate all questions submitted, we were only able to ask a select few due to contraints on time. More...

OAKMARK INTERNATIONAL FUND, INTERNATIONAL STOCKS, INVESTING


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A Conversation with Global Investor David Herro David Herro - A Conversation With Global Investor David Herro
David Herro is the portfolio manager for Oakmark's International Fund, International Small Cap Fund, and Global Select Fund. The global investor, who was named Morningstar's International Stock Fund Manager of the Decade for 2000-2009, recently spoke with GuruFocus for an exclusive interview. More...

DAVID HERRO, OAKMARK, GLOBAL, INTERNATIONAL, INTERVIEW, TOYOTA, HONDA, CONTINENTAL


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Five Gurus Trade in Stocks in Swedish Companies in Fourth Quarter David Herro - Five Gurus Trade In Stocks In Swedish Companies In Fourth Quarter
Gurus Wasatch International Growth (Trades, Portfolio) and David Herro (Trades, Portfolio) led a short list of investors who dabbled in Swedish stocks in the fourth quarter. More...

David Herro, International, Global, Sweden


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Oakmark Trades in Five Australian Companies in Fourth Quarter David Herro - Oakmark Trades In Five Australian Companies In Fourth Quarter
Humans are believed to have inhabited the continent of Australia for more than 40,000 years, but people in the rest of the world have only been aware of it for about four centuries. More...

David Herro, Oakmark, Small cap, Australia


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Gurus Trade in British-Based Pharmaceutical Stock in Fourth Quarter Causeway International Value, David Herro - Gurus Trade In British-Based Pharmaceutical Stock In Fourth Quarter
With health care being such a prominent topic, it shouldn’t come as a surprise that some gurus have been trading in companies whose products promote better health. More...

GlaxoSmithKline, Pharmaceuticals


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Oakmark Intl Small Cap's Most Heavily Weighted Positions David Herro - Oakmark Intl Small Cap's Most Heavily Weighted Positions
David Herro (Trades, Portfolio)'s Oakmark Intl Small Cap (Trades, Portfolio) recently added a new international position to the portfolio and increased stakes in 22 other international positions. The firm currently has 61 stocks in its portfolio valued at $2.786 billion, with a quarter over quarter turnover of 9%. More...

INTERNATIONAL STOCKS, INDUSTRIAL SECTOR, Oakmark Funds, David Herro


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Herro Adds One Stake to Portfolio in Fourth Quarter David Herro - Herro Adds One Stake To Portfolio In Fourth Quarter
Guru David Herro (Trades, Portfolio), manager of the Oakmark International Fund since 1992, the Oakmark International Small Cap Fund since 1995 and the Oakmark Global Select Fund since 2006, added one new stock to his portfolio in the fourth quarter – Continental AG (CON.Germany), a German manufacturing company emphasizing tires, brake systems, safety, powertrain and chassis components, tachographs and other parts for the automotive and transportation industries. More...

David Herro, Continental AG


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David Herro's Biggest International Stock Buys and Adds of Q4 David Herro - David Herro's Biggest International Stock Buys And Adds Of Q4
David Herro (Trades, Portfolio), who manages the Oakmark International Fund and Oakmark International Small Cap Fund, bought one new European stock and added to 20 existing holdings in the fourth quarter. More...

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International Investing Guru David Herro On Where To Buy Stocks Now David Herro - International Investing Guru David Herro On Where To Buy Stocks Now
The Nasdaq just hit 15-year highs. The market has gone basically straight up since the low in March of 2009. More...

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Submit Questions Now for An Upcoming Q&A With David Herro David Herro - Submit Questions Now For An Upcoming Q&A With David Herro
One of Oakmark Fund’s portfolio managers, David Herro (Trades, Portfolio), will be joining GuruFocus for a Q&A session in the next few weeks. Have questions about Herro’s investing philosophy or international markets? Simply ask in the comments section below, and stay tuned for his answers. More...

DAVID HERRO, OAKMARK, OAKMARK FUNDS, Q&A, INTERVIEW


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Oakmark International's David Herro Reminds Us That Volatility Is Our Friend David Herro - Oakmark International's David Herro Reminds Us That Volatility Is Our Friend
David Herro (Trades, Portfolio) is a fundamental value investor. Therefore he believes volatility is his friend. More...

David Herro, Video, Oakmark International


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David Herro Comments on Applus Services SA
We added one new security to the Fund during the quarter, Spain-based Applus Services (XMCE:APPS). Applus is a leading global certification company specializing in testing, inspection and certification services. The company provides solutions for clients in all sectors to ensure that their assets and products comply with environmental, quality, health and safety standards and regulations. More...

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