Bestinfond (Trades, Portfolio), the fund formerly run by Spanish guru Francisco Garcia Parames (Trades, Portfolio), disclosed this week that its top five buys in the second quarter were in GlaxoSmithKline PLC (LSE:GSK, Financial), Ams AG (XSWX:AMS, Financial), Samsung Electronics Co. Ltd. (XKRX:005930, Financial), Ashtead Group PLC (LSE:AHT, Financial) and LivaNova PLC (LIVN, Financial).
The fund, part of Bestinver, applies Parames’ strict application of the principles of value investing within a framework of the Austrian theory of economic cycles. Parames’ taught himself key principles from legends like Peter Lynch, Benjamin Graham and Warren Buffett (Trades, Portfolio).
Chief Investment Officer Beltran de la Lastra said in his first-quarter letter that Bestinver has turned knowledge, prudence and patience into its three pillars of the firm’s investment philosophy. The fund manager discussed three aspects utilizing the above three pillars: liquidity, quality of companies and diversification.
De la Lastra, who announced in March he is leaving Bestinver next October, underscored that the firm continues to meet its long-term objective by investing in equities that offer attractive returns today. As of the quarter-end, the fund’s $1.35 billion equity portfolio contains 87 positions, with 12 new holdings and a turnover ratio of 15%. The top three sectors in terms of weight are industrials, communication services and consumer cyclical, representing 20.99%, 17.86% and 14.72% of the equity portfolio.
GlaxoSmithKline
The fund purchased 1,643,389 shares of GlaxoSmithKline, giving the stake 2.20% weight in the equity portfolio. Shares averaged 16.36 pounds ($21.42) during the second quarter.
The U.K.-based drug manufacturer announced in a joint release with France-based Sanofi SA (XPAR:SAN, Financial) that the U.S. government will pay the two companies up to $2.1 billion as part of the government’s “Operation Warp Speed” effort to accelerate the development and manufacturing of a Covid-19 vaccine. The companies plan to dedicate over 50% of the funding to clinical trials and other development steps and the remainder to the manufacturing of 100 million doses.
GuruFocus ranks GlaxoSmithKline’s profitability 8 out of 10 on several positive investing signs, which include a three-year earnings growth rate that outperforms 95.36% of global competitors and an operating margin that has increased approximately 6.20% per year on average over the past five years.
The T Rowe Price Equity Income Fund (Trades, Portfolio) and Tweedy Browne (Trades, Portfolio) Global Value Fund also have holdings in GlaxoSmithKline.
Ams
The fund purchased 1,782,491 shares of Ams, giving the position 1.72% weight in the equity portfolio. Shares averaged 13.01 francs ($14.25) during the second quarter.
Ams designs, manufactures and sells a wide range of analog integrated circuit solutions worldwide. GuruFocus ranks the Austrian semiconductor company’s profitability 9 out of 10 on several positive investing signs, which include a high Piotroski F-score of 8 and operating margins that are outperforming 81.27% of global competitors.
Samsung
The fund purchased 544,635 shares of Samsung, giving the position 1.51% weight in the equity portfolio. Shares averaged 50,375 won ($42.17) during the second quarter.
GuruFocus ranks the South Korean consumer electronics company’s financial strength and profitability 8 out of 10 on several positive investing signs, which include a strong Altman Z-score of 4.95, debt ratios that outperform over 80% of global competitors and profit margins that have increased approximately 6.6% per year on average over the past five years.
Other gurus with holdings in Samsung include the Matthews Pacific Tiger Fund (Trades, Portfolio), Causeway International Value (Trades, Portfolio) and David Herro (Trades, Portfolio).
Ashtead
The fund purchased 640,609 shares of Ashtead, giving the holding 1.42% weight in the equity portfolio. Shares averaged 22.34 pounds ($29.27) during the second quarter.
GuruFocus ranks the U.K.-based equipment rental provider’s profitability 9 out of 10 on several positive investing signs, which include operating margins and returns on equity that are outperforming over 91% of global competitors.
LivaNova
The fund purchased 426,533 shares of LivaNova, giving the position 1.29% weight in the equity portfolio. Shares averaged $50.06 during the second quarter.
GuruFocus ranks the U.K.-based medical instruments company’s financial strength 5 out of 10: Although the company has a satisfactory Piotroski F-score of 4, LivaNova has a weak Altman Z-score of 1.43 and a debt-to-equity ratio that underperforms 64.23% of global competitors.
Disclosure: No positions.
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