We established a position in Coca-Cola FEMSA (KOF, Financial), the Mexican based Coca-Cola bottler, for our unhedged Global Value Fund II. This stock has been held in our hedged Global Value Fund for years, at a varying degree, depending on the price to value relationship. As you may recall, Coca-Cola FEMSA is the world’s largest Coca-Cola bottler by volume. Distribution is in emerging market countries such as Mexico, Brazil, Colombia, Argentina, and Venezuela. The company has a strong financial record, and by our estimates has compounded its intrinsic value at approximately 10% per annum including its dividend. At purchase, the stock (an American Depository Receipt, or “ADR”) was trading at just over 70% of our conservative estimate of its underlying intrinsic value.
From Tweedy Browne (Trades, Portfolio)'s fourth-quarter 2019 commentary.
