Bernard Horn (Trades, Portfolio), manager of the Polaris Global Value Fund, disclosed this week he established four new positions during the fourth quarter of 2019: Standard Chartered PLC (LSE:STAN, Financial), Daicel Corp. (TSE:4202, Financial), Cambridge Bancorp (CATC, Financial) and Sparebanken Vest AS (OSL:SVEG, Financial).
Managing a portfolio of 84 stocks, Horn selects investments based on the belief that country and industry factors are important determinants of security prices and that global market fluctuations produce mispriced stocks.
As of quarter-end, the $468 million equity portfolio has a turnover ratio of 2%. The top three sectors in terms of portfolio weight are financial services, materials and consumer cyclical, with weights of 30.09%, 12.54% and 12.40%.
Standard Chartered
Horn purchased 393,437 shares of Standard Chartered, giving the position 0.79% weight in the equity portfolio. Shares averaged 6.94 pounds ($8.93) during the quarter.
The U.K.-based bank provides trade finance banking services around the globe. According to GuruFocus, the bank’s equity-to-asset ratio and debt-to-equity ratio underperform over 76% of global competitors, warning signs of low financial strength.
Bestinfond (Trades, Portfolio) and Tweedy Browne (Trades, Portfolio) Global Value also have holdings in Standard Chartered.
Daicel
Horn purchased 351,000 shares of Daicel, giving the holding 0.72% weight in the equity portfolio. Shares averaged 1,036.43 yen ($9.65) during the quarter.
The Osaka, Japan-based company sells chemical-based products across four business categories: plastics, cellulosic derivatives, organic chemicals and pyrotechnic devices. GuruFocus ranks Daicel’s financial strength 7 out of 10: Cash-to-debt, debt-to-equity and interest coverage ratios are outperforming over 64% of global competitors despite a low Piotroski F-score of 2.
Cambridge
Horn purchased 14,800 shares of Cambridge Bancorp, giving the position 0.25% weight in the equity portfolio. Shares averaged $78.01 during the quarter.
The Massachusetts-based bank offers a wide range of commercial and consumer banking services. GuruFocus ranks the regional bank’s financial strength 3 out of 10: Cash-to-debt ratios are underperforming 75.66% of global banks despite debt ratios outperforming 51% of global competitors.
Mario Gabelli (Trades, Portfolio) also has a holding in Cambridge Bancorp.
Sparebanken Vest
Horn purchased 140,940 shares of Sparebanken, giving the holding 0.22% weight in the equity portfolio. Shares averaged 58.41 Norwegian krone ($6.31) during the quarter.
The Norwegian financial services company provides estate agency and home mortgage services to private and corporate sectors. According to GuruFocus, Sparebanken’s debt ratios underperform over 90% of global competitors, suggesting low financial strength. Despite this, net margins are outperforming 94.33% of global banks.
Disclosure: No positions.
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