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James Li
James Li
Articles (1174)  | Author's Website |

Tweedy Browne’s Top 4 Sells of the 4th Quarter

Global Value Fund’s largest reduction is in German digital publisher

The Tweedy Browne (Trades, Portfolio) Global Value Fund disclosed this week that its top four sells during fourth-quarter 2019 were Axel Springer SE (XTER:SPR), Safran SA (XPAR:SAF), HSBC Holdings PLC (LSE:HSBA) and SINA Corp. (NASDAQ:SINA).

The fund seeks long-term capital appreciation through a Benjamin Graham-like approach, investing primarily in non-U.S. securities that are trading below intrinsic value. The fund mostly invests in developed markets with some exposure to emerging markets.


As of quarter-end, the fund’s $7.01 billion equity portfolio contains 79 stocks, with just one new holding for the quarter. The top three sectors in terms of weight are financial services, consumer defensive and industrials, with weights of 25.94%, 21.41% and 13.73%.


Axel Springer

The fund sold 3,511,394 shares of Axel Springer, reducing the equity portfolio 3.47%. Shares averaged 63.33 euros ($70.53) during the quarter.


The German publisher operates a wide range of newspapers and tabloid magazines, including Bild and Business Insider. GuruFocus ranks Axel Springer’s profitability 7 out of 10 on several positive investing signs, which include a good Piotroski F-score of 6 and operating margins that outperform 70.88% of global competitors.


Despite strong profitability, Axel Springer’s valuation ranks 2 out of 10 as price-book and price-sales ratios underperform over 68% of global competitors, suggesting moderate overvaluation. GuruFocus lists several medium warning signs, which include a price-earnings ratio near a 10-year high and a price-sales ratio near a one-year high.



The fund sold 374,514 shares of Safran, trimming the holding 15.79% and the equity portfolio 0.85%. Shares averaged 143.43 euros during the quarter.


The French aerospace and defense company designs, manufactures and services aircraft engines, mechanical and electrical systems for military and civil aircraft. GuruFocus ranks Safran’s profitability 7 out of 10 on several positive investing signs, which include expanding profit margins and a return on equity that outperforms 82.22% of global competitors.


Despite strong profitability, Safran’s valuation ranks 1 out of 10, driven by a share price and price-sales ratio near a 10-year high.


Spiros Segalas (Trades, Portfolio) also has a holding in Safran.


HSBC Holdings

The fund sold 3,416,075 shares of HSBC Holdings, trimming the stake 21.1% and the equity portfolio 0.38%. Shares averaged 5.89 pounds ($7.70) during the quarter.


The U.K.-based bank provides commercial and global banking services across Europe, Asia, the Middle East, North America and Africa. According to GuruFocus, HSBC has an equity-to-asset ratio of 0.07, which underperforms 77.91% of global competitors.


The fund sold 632,525 shares of SINA, trimming the equity portfolio 0.36%. Shares averaged $38.31 during the quarter.


The Chinese online media company operates Weibo, a social media platform that resembles that of Twitter Inc. (NYSE:TWTR). GuruFocus ranks SINA’s profitability 7 out of 10 on several positive investing signs, which include operating margins that are outperforming 82.72% of global competitors.


Disclosure: No positions.

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About the author:

James Li
I am an editorial researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

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