The Signature Select Canadian Fund (Trades, Portfolio) disclosed this week that its top five buys for the six months ending Sept. 30 were SPDR Gold Trust (GLD, Financial), Merck & Co. Inc. (MRK, Financial), Danone SA (XPAR:BN, Financial), Boston Scientific Corp. (BSX, Financial) and Basf SE (XTER:BAS, Financial).
The fund, which is part of CI Investments, releases its portfolio updates semiannually. Led by Chief Investment Officer Eric Bushell, Signature Select seeks long-term capital appreciation primarily through common-stock investments in Canadian companies that pay regular income. Qualitative characteristics, including company management and governance structures, play an important role in the fund’s stock selection process.
As of third quarter-end, the fund’s $803 million equity portfolio contains 111 stocks, of which 26 represent new holdings. The fund’s top three sectors in terms of weight are financial services, energy and technology, with financial services occupying 32.68% of the portfolio.
SPDR Gold Trust
Signature Select purchased 143,400 shares of SPDR Gold Trust, giving the position 3.28% weight in the equity portfolio. Shares averaged $139.03 during the quarter.
According to its website, the SPDR Gold Trust seeks to track the price of gold bullion net of Trust expenses.
Merck
The fund purchased 65,500 shares of Merck, giving the holding 0.91% weight in the equity portfolio. Shares averaged $84.08 during the quarter.
The Kenilworth, New Jersey-based company manufactures pharmaceutical products to treat medical conditions like cardiovascular disease, asthma, cancer and infections. GuruFocus ranks Merck’s profitability 8 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7 and operating margins that have increased approximately 2.50% per year over the past five years and are outperforming 91.50% of global competitors.
Other gurus with holdings in Merck include Ken Fisher (Trades, Portfolio) and the Vanguard Health Care Fund (Trades, Portfolio).
Danone
Signature Select purchased 40,900 shares of Danone, giving the position 0.59% weight in the equity portfolio. Shares averaged 78.42 euros ($87.42) during the quarter.
The French packaged goods company manufactures well-known products like Dannon dairy products and Evian bottled water. GuruFocus ranks Danone’s profitability 7 out of 10 on several positive investing signs, which include expanding profit margins and a return on equity that outperforms 74.59% of global competitors. Despite this, Danone’s three-year revenue growth rate of 1.4% underperforms 59.41% of global packaged food companies.
Boston Scientific
Signature Select purchased 85,760 shares of Boston Scientific, giving the holding 0.58% weight in the equity portfolio. Shares averaged $42.38 during the quarter.
The Marlborough, Massachusetts-based company produces less invasive medical devices that are inserted into the human body through small openings. GuruFocus ranks Boston Scientific’s profitability 6 out of 10: Even though the company’s three-year revenue growth rate of 7.9% outperforms just 58.67% of global competitors, its operating margin has increased approximately 8% per year over the past five years and is outperforming 81.66% of global competitors.
Basf
The fund purchased 48,800 shares of Basf, giving the position 0.56% weight in the equity portfolio. Shares averaged 60.91 euros during the quarter.
The German company produces chemical products ranging from commodities to specialty products. GuruFocus ranks Basf’s profitability 7 out of 10 on the heels of net profit margins and returns outperforming over 86% of global competitors despite revenues declining 3.8% per year on average over the past three years, a rate that underperforms 84.32% of global chemical companies.
See also
Signature Select’s other buys over the past six months included 11,400 Class B shares of Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial), the conglomerate headed by co-managers Warren Buffett (Trades, Portfolio) and Charlie Munger (Trades, Portfolio). The position represents 0.39% of the equity portfolio; shares averaged $206.13 during the quarter.
Disclosure: No positions.
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