Bernard Horn

Bernard Horn Premium Guru

Last Update: 09-11-2017

Number of Stocks: 85
Number of New Stocks: 9

Total Value: $434 Mil
Q/Q Turnover: 15%

Countries: USA ITA NOR GBR BEL FIN HKG DEU KOR FRA SWE CHE JPN CAN THA AUS
Details: Top Buys | Top Sales | Top Holdings  Embed:

Bernard Horn Watch

  • Bernard Horn Comments on Greencore Group

    Greencore Group (LSE:GNC) executed seamlessly in the U.K., as their food-to-go offerings retained strong growth. U.S. operations were similarly well positioned, backed by the timely integration of the Peacock Foods acquisition and new business wins. Yet the stock price fell when the firm announced it would change production at its Jacksonville facility from frozen sandwiches to fresh food. Investors were concerned this signaled difficulty with its Starbucks business. At only 2% of Greencore’s revenues, the Starbucks contract was far from substantial, but the market extrapolated that other legacy contracts may be at risk.

    From Bernard Horn (Trades, Portfolio)'s third quarter 2017 shareholder commentary.   


  • Bernard Horn Comments on Quest Diagnostics

    Another health care sector holding, Quest Diagnostics (NYSE:DGX) reported solid quarterly revenues, attributable to their expanding book of business and healthy operating cash flow position. The company raised full-year guidance, confident in its business fundamentals and outlook. The stock price was stable until September 22, when the Centers for Medicare & Medicaid Services introduced proposed Medicare payment rates for clinical diagnostic laboratory tests. Draft rates called for a 10% rate cut in 2018 with heftier cuts from 2019-2021. Quest Diagnostics’ stock reacted negatively to this news and management intends to challenge the proposal.

    From Bernard Horn (Trades, Portfolio)'s third quarter 2017 shareholder commentary.   


  • Bernard Horn Comments on Teva Pharmaceutical

    Teva Pharmaceutical (NYSE:TEVA), the Israeli drug company, dropped materially during the quarter. The company faced a perfect storm of industry pressures and self-inflicted missteps. Pricing pressure in the U.S. generics market was worse than normal. The resultant lower cash flow, and a high debt load from the Allergan acquisition, forced the company to cut its dividend and warn that debt covenants may be violated. Management planned asset sales to help alleviate cash requirements. Generic drug competition also impacted Allergan, as the stock declined nearly 15% on concerns of a 2018 generic alternative to Allergan’s flagship Alzheimer’s drug, Namenda. However, Allergan’s current drug portfolio remains resilient, led by advances in Botox and the introduction of Namzaric. Company management also signaled its intention to add new medicines and expand via acquisitions.

    From Bernard Horn (Trades, Portfolio)'s third quarter 2017 shareholder commentary.   


  • Bernard Horn Comments on Thai Oil

    In the energy sector, Thai Oil (BKK:TOP) gained more than 20% on the back of better pricing, decent volumes and higher refining margins related to tightening refined product supply after Hurricane Harvey’s impact on Houston. WorleyParsons, the Australian energy consulting firm, reported respectable annual results with improved cash collections and a 20% increase in backlog across nearly all divisions (hydrocarbons, mining and infrastructure). Despite low energy prices, WorleyParsons’ clients have adapted their cost structures to the new reality and are beginning to revive capital investment projects. Additionally, a Middle East-based consulting firm took at 19% stake in the company with a view toward a takeover.

    From Bernard Horn (Trades, Portfolio)'s third quarter 2017 shareholder commentary.   


  • Bernard Horn Comments on Thai Oil

    In the energy sector, Thai Oil (BKK:TOP) gained more than 20% on the back of better pricing, decent volumes and higher refining margins related to tightening refined product supply after Hurricane Harvey’s impact on Houston. WorleyParsons, the Australian energy consulting firm, reported respectable annual results with improved cash collections and a 20% increase in backlog across nearly all divisions (hydrocarbons, mining and infrastructure). Despite low energy prices, WorleyParsons’ clients have adapted their cost structures to the new reality and are beginning to revive capital investment projects. Additionally, a Middle East-based consulting firm took at 19% stake in the company with a view toward a takeover.

    From Bernard Horn (Trades, Portfolio)'s third quarter 2017 shareholder commentary.   


  • Bernard Horn Comments on Kia Motors

    South Korea’s Kia Motors (XKRX:000270) and Hyundai Motors battled sales slumps in China amid regional tensions; both also had weaker U.S. sales. A South Korean court ruled Kia owes workers back wages related to prior bonus calculations in a long-running legal case. The cumulative unpaid wages amounted to $400 million. Additional labor costs and wage adjustments arising from the ruling will more than double that amount; Kia provisioned another $400 million in estimated payments. As a result, the company is expected to post an operating loss in the next quarter.

    From Bernard Horn (Trades, Portfolio)'s third quarter 2017 shareholder commentary.   


  • Bernard Horn Comments on Regal Entertainment

    Regal Entertainment (NYSE:RGC), a U.S. theater operator, detracted from consumer discretionary sector results after missing consensus estimates. The lower-than-expected revenue was primarily due to softer box office attendance, although average ticket pricing trends increased. Markets were also wary about the shorter exclusivity period from theater to DVD/on-demand and a new “movie pass” subscription service. We believe the $10 per month unlimited pass will actually be a net positive for theaters, as more visitors equate to more money spent at concessions, a major profit source for theaters. Additionally, Regal made a $173 million acquisition of theaters in Houston, Kansas and Oklahoma that are expected to be immediately accretive to earnings and free cash flow.

    From Bernard Horn (Trades, Portfolio)'s third quarter 2017 shareholder commentary.   


  • Bernard Horn Comments on Xerox Corp

    Elsewhere in the information technology sector, U.S. business service/printing company, Xerox Corp. (NYSE:XRX), reported decent sales, market share gains in managed printing services and competitive product developments. In addition to top-line growth, Xerox reduced operating expenses and projected $1.5 billion in cost cuts by 2020. The market rewarded Xerox for its proactivity, as the stock price ticked up more than 15% by quarter end.

    From Bernard Horn (Trades, Portfolio)'s third quarter 2017 shareholder commentary.   


  • Bernard Horn Comments on NEXON Co.

    NEXON Co. (TSE:3659) was the top contributor to Fund returns, up more than 30% for the quarter. The Japanese gaming company reported good second quarter results, driven by the success of their flagship game in China, Dungeon & Fighter. The recent release of Lawbreakers for the Western market, as well as some of their other titles, should help diversify their product portfolio. The company also launched MMORPG AxE in September; it became an immediate best seller in the Korean Apple store.

    From Bernard Horn (Trades, Portfolio)'s third quarter 2017 shareholder commentary.   


  • Bernard Horn Comments on Methanex Corp

    Supply-demand constraints also contributed to Methanex Corp. (NASDAQ:MEOH)’s performance for the quarter. Availability of Gulf Coast methanol was in question following Hurricane Harvey, causing prices to jump nearly 10%. About 75% of Methanex’s capacity is outside the U .S., and their Gulf Coast assets actually continued to operate normally. A large methanol-to-olefins (MTO) plant in China resumed production adding to methanol demand, which looks promising for the foreseeable future. According to a research report, one in five tons of global methanol production will be utilized for MTO production to satisfy expanding Chinese chemical demand by 2021.

    From Bernard Horn (Trades, Portfolio)'s third quarter 2017 shareholder commentary.   


  • Bernard Horn Comments on BHP Billiton

    Global demand for iron ore was strong, backed by Chinese steel production; BHP Billiton (NYSE:BHP) benefitted from rising prices of both iron ore and copper. The company also responded to an activist investor, enacting numerous asset allocation, operational and management measures most of which were in process already. Finally, BHP released robust fiscal year 2018 guidance across iron ore, copper, and coal but remained cautious on the petroleum business outlook. They decided to sell U.S. onshore (shale) oil properties.

    From Bernard Horn (Trades, Portfolio)'s third quarter 2017 shareholder commentary.   


  • Bernard Horn's 3rd Quarter Polaris Global Value Fund Shareholder Letter

    October 5, 2017


    Dear Fellow Shareholder,

      


  • Bernard Horn Comments on Infosys

    Western Union (NYSE:WU) dipped approximately 6% on concerns about compliance costs and disruptive competition. The company announced flat revenues, but noted continued growth in its online money transfer transaction and consumer bill payment business. The company returned more than $300 million to shareholder through share buybacks and dividends during the first quarter of 2017.

    From Bernard Horn (Trades, Portfolio)'s Polaris Global Value Fund second quarter 2017 shareholder letter.   


  • Bernard Horn Comments on Infosys

    Infosys (NYSE:INFY) began transitioning its business to more value-added projects, which require skilled employees with higher salaries. The original Infosys founders, no longer affiliated with the company, complained about this strategy and management pay hikes in the media. This negative news, in combination with concerns surrounding U.S. H-1B visas, depressed the stock price.

    From Bernard Horn (Trades, Portfolio)'s Polaris Global Value Fund second quarter 2017 shareholder letter.   


  • Bernard Horn Comments on Samsung Electronics

    Samsung Electronics (XKRX:005930) had two consecutive quarters of double-digit gains, driven by its DRAM and NAND flash memory chips. Total semiconductor sales were up 40% year over year, and the division generated $5.6 billion in operating income, doubling from 2016 comparable period. Management anticipates accelerated sales in the mobile phone business upon the launch of the Galaxy S8 in the second half of the year. Select information technology sector holdings detracted.

    From Bernard Horn (Trades, Portfolio)'s Polaris Global Value Fund second quarter 2017 shareholder letter.   


  • Bernard Horn Comments on Samsung Electronics

    Samsung Electronics (XKRX:005930) had two consecutive quarters of double-digit gains, driven by its DRAM and NAND flash memory chips. Total semiconductor sales were up 40% year over year, and the division generated $5.6 billion in operating income, doubling from 2016 comparable period. Management anticipates accelerated sales in the mobile phone business upon the launch of the Galaxy S8 in the second half of the year. Select information technology sector holdings detracted.

    From Bernard Horn (Trades, Portfolio)'s Polaris Global Value Fund second quarter 2017 shareholder letter.   


  • Bernard Horn Comments on Web.com Group

    Website services provider, Web.com Group (NASDAQ:WEB), gained as reports surfaced that the company was in early-stage talks with private equity firms regarding a potential leveraged buyout. The price is purported to be substantially higher than where it is currently trading, but as of now, this is purely market speculation. The company also reported earnings that exceeded guidance on revenue and profitability.

    From Bernard Horn (Trades, Portfolio)'s Polaris Global Value Fund second quarter 2017 shareholder letter.   


  • Bernard Horn Comments on Solvay AG

    Solvay AG (XTER:SOL), announced impressive first quarter numbers, with net sales up nearly 10%, margins at 21% and free cash flow from operations at nearly $181 million. Solvay has been actively transforming its portfolio to become the market leader in specialty polymers and other high performance chemicals, divesting non-core business lines. The business strategy appeared to be reaping rewards.

    From Bernard Horn (Trades, Portfolio)'s Polaris Global Value Fund second quarter 2017 shareholder letter.   


  • Bernard Horn Comments on Linde AG

    Linde AG (XTER:LIN), posted good results, with revenues and profits that beat analyst consensus. Positive trends were attributable to sales in EMEA (Europe, Middle East & Africa) and Asia/Pacific countries, as well as higher revenues in the engineering division. On June 1, Linde’s supervisory board signed off on the $73 billion merger with U.S. rival Praxair, combining forces to create the world’s largest supplier of industrial gases. News of the merger, which reunites a global Linde group split apart by World War I, sent Linde shares higher. By the end of June 2017, the stock price was up more than 15%. Belgian multi-specialty chemical company,

    From Bernard Horn (Trades, Portfolio)'s Polaris Global Value Fund second quarter 2017 shareholder letter.   


  • Bernard Horn's 2nd Quarter Shareholder Letter

    Dear Fellow Shareholder, July 11, 2017


    The Fund returned 5.20% for the quarter, outperforming the MSCI World Index at 4.03%. The Fund’s results were especially noteworthy, considering that global growth stocks appreciably outperformed their value-oriented counterparts during the period. Outperformance can be attributed to careful stock selection, as more than 70% of Fund holdings were in positive territory for the quarter. Nearly 20 companies had double-digit gains. Among the top individual performers were information technology companies, Web.com Group and Samsung Electronics; British homebuilders, Persimmon and Bellway; and healthcare companies, Anthem Inc., Quest Diagnostics and UnitedHealth Group. Detractors were mainly limited to U.S. stocks, including Avnet Inc., WESCO International, Regal Entertainment, J.M. Smucker Co and Verizon Communications.

      


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