Francisco Garcia Parames (Trades, Portfolio) disclosed this week that his firm, Cobas Asset Management, started four new positions during the first quarter: Affiliated Managers Group Inc. (AMG, Financial), Sacyr SA (XMAD:SCYR, Financial), Prosegur Compania De Seguridad SA (XMAD:PSG, Financial) and Fnac Darty SA (XPAR:FNAC, Financial).
Parames, author of “Invirtiendo a largo plazo,” managed Bestinfond (Trades, Portfolio) until September 2014. His 25-year track record near the top of performance rankings makes him one of the prolific European asset managements in the value school.
The Cobas chairman and chief investment officer takes key principles of value investing from legendary investors like Ben Graham, Peter Lynch and Warren Buffett (Trades, Portfolio) and applies them within the framework of the Austrian business cycle theory.
Guru updates market situation during the first quarter
Parames said in his shareholder letter that the first quarter “has been one of the hardest” quarters he experienced as an investor as the coronavirus continues taking its toll around the globe. Despite the setback, Parames underscored that the firm “does not have to worry” if prices of good companies fall even though the losses can still place a temporary psychological burden. The fund manager further added that one way to cope with the burden is to treat the holdings as “private, unlisted companies” and focus just on the performance of the business.
As of quarter-end, Cobas’ $410 million equity portfolio contains 64 stocks with a turnover ratio of 13%. The top three sectors in terms of weight are in energy, industrials and consumer cyclical, with weights of 30.18%, 28.69% and 22.90%.
Affiliated Managers Group
Cobas purchased 55,454 shares of Affiliated Managers Group, giving the position 0.73% weight in the equity portfolio. Shares averaged $75.35 during the first quarter.
The West Palm Beach, Florida-based company makes equity investments in boutique investment management funds, which include the Austin, Texas-based Yacktman Fund (Trades, Portfolio) and Yacktman Focused Fund (Trades, Portfolio). GuruFocus ranks the company’s profitability 8 out of 10 on the heels of an operating margin that outperforms 63.99% of global competitors and a Joel Greenblatt (Trades, Portfolio) return on capital that outperforms 84.16% of global asset management companies.
Sacyr SA
The fund purchased 1,248,921 shares of Sacyr, giving the stake 0.42% weight in the equity portfolio. Shares averaged 2.26 euros ($2.45) during the quarter.
The Madrid-based company develops complex infrastructure products and provides construction services for various industrial markets. According to GuruFocus, Sacyr’s operating margin and three-year revenue growth rate are outperforming over 70% of global competitors despite returns underperforming over 80% of global construction companies.
Prosegur
Cobas purchased 545,415 shares of Prosegur, giving the holding 0.30% weight in the equity portfolio. Shares averaged 3.32 euros ($3.60) during the quarter.
GuruFocus ranks the Spanish security company’s profitability 7 out of 10 on the back of returns on equity outperforming 65.35% of global competitors and an operating margin that is outperforming approximately 60% of global business service companies despite contracting over the past five years.
Fnac Darty
The fund purchased 14,032 shares of Fnac Darty, giving the position 0.08% weight in the equity portfolio. Shares averaged 39.48 euros ($42.81) during the quarter.
The French retail company distributes entertainment and leisure products primarily to European countries. GuruFocus ranks the company’s profitability 7 out of 10 on the back of returns outperforming over 62% of global competitors.
Disclosure: No positions.
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