Spanish fund azValor Iberia FI (Trades, Portfolio) has released its portfolio for the second quarter of 2020. New additions to the portfolio include Compania de Distribucion Integral Logista Holdings (XMAD:LOG, Financial), Semapa SA (XLIS:SEM, Financial), Prosegur Cash SA (XMAD:CASH, Financial), Acerinox SA (XMAD:ACX, Financial) and The Navigator Co. SA (XLIS:NVG, Financial).
The azValor Iberia FI (Trades, Portfolio) portfolio consists of Spanish and Portuguese companies listed on secondary markets, with Spanish shares not exceeding 90% of the fund. Companies are selected regardless of their size or sector. The fund is managed according to the principles of value investing with managers that search for undervalued companies with sustainable competitive advantages over time, high returns on capital employed (ROCE), are led by quality management teams and whose intrinsic value is not reflected in their share price.
Portfolio overview
The portfolio contains 32 stocks, including the five new holdings. It is valued at $46 million and has seen a 14% turnover rate.
Top holdings of the fund include Elecnor SA (XMAD:ENO) (10.34%), Tubacex SA (XMAD:TUB) (10.25%), Galp Energia SGPS SA (XLIS:GALP) (8.24%), Tecnicas Reunidas SA (XMAD:TRE) (5.07%) and Miquel y Costas & Miquel SA (XMAD:MCM) (4.97%).
By weight, the top three sectors represented are industrials (35.55%), basic materials (32.11%) and energy (12.50%).
Compania de Distribucion Integral Logista
The portfolio saw the addition of the company for the first time with the purchase of 99,036 shares. The shares were purchased at an average price of 16.15 euros ($19.02) per share and GuruFocus estimates the total gain of the holding at -2.41%.
Compania de Distribucion Integral Logista is a distributor and logistics operator. The company provides distribution channels for products and services, including tobacco and related tobacco products, convenience goods and lottery tickets. The company organizes itself into three segments: tobacco and related products, transport and other businesses. The Tobacco and related products segment contributes the vast majority of revenue. The company primarily operates in France, Italy and the Iberian Peninsula (Spain and Portugal), and derives the majority of its revenue in France.
On July 31, the company was trading at 15.76 euros per share with a market cap of 2.08 billion euros. According to the Peter Lynch chart, the stock has been trading slightly below intrinsic value since March.
GuruFocus gives the company a financial strength rating of 7 out of 10 and a profitability rank of 6 out of 10. The cash-to-debt ratio of 34.46 places it higher than 94.17% of the industry. However, an Altman Z-Score of 1.53 places it in the distress column.
Semapa
The portfolio saw the addition of Semapa for the first time since 2017, when the remaining shares of the company were sold. The team added 84,633 shares at an average price of 8.61 euros. The purchase had an overall impact of 2.35% on the equity portfolio.
Semapa makes and sells a variety of paper products as well as cement. The company organizes itself into three segments based on product type. The paper and pulp segment, which generates the majority of revenue, primarily sells tissue and printing paper. The segment also sells pulp and produces electricity from natural gas. The cement segment sells cement, ready-mix concrete and aggregates to the construction and building industries. The environment segment collects animal waste and sells animal fats, food oil and meat.
July 31 saw shares trading at 7.69 euros per share with a market cap of 614.20 million euros. The Peter Lynch chart shows the company has been trading below intrinsic value since 2018.
GuruFocus gives the company a financial strength rating of 4 out of 10, a profitability rank of 7 out of 10 and a valuation rank of 10 out of 10. The current operating margin and net margin percentages place the company higher than the majority of the industry. The company has also decreased debt over the last several years.
Prosegur Cash
The quarter saw Prosegur Cash added to the portfolio for the first time in history with the purchase of 1.22 million shares. The shares were purchased at an average price of 0.81 euros. Overall, the purchase had a 1.98% impact on the portfolio.
Prosegur Cash is engaged in the transit business and the outsourcing of services to financial institutions, retail establishments, government agencies and central banks, national mints, jewelers and other business activities around the world. The company's business lines can be categorized into transport, cash management and new products such as automation of payments in shops using self-service cash machines, among others.
The company was trading at 0.68 euros per share on Friday with a market cap of 1.02 billion euros. The Peter Lynch chart suggests that the company is currently trading well below intrinsic value.
GuruFocus gives the company a financial strength rating of 3 out of 10 and a profitability rank of 6 out of 10. Increased levels of debt have been issued over the last several years and a severe warning has been issued for declining revenue per share. An Altman Z-Score of 2 places the company in the grey zone from bankruptcy.
Acerinox
Acerinox was added to the portfolio after the holding was sold out in the first quarter of 2020. Around 107,382 shares were purchased at an average price of 6.87 euros. The purchase represented a 1.66% impact on the portfolio.
Acerinox is a Spain-based stainless steel maker. It has six stainless steel factories, three manufacturing flat and long products in Spain, one producing flat products in South Africa, one producing flat and long products in the United States and one producing flat steel products in Malaysia. The company's products are used in automotive, electrics, home appliances and other items.
On July 31, the company was trading at 7.36 euros per share with a market cap of 1.99 billion euros. The company currently does not have enough financial data to display a Peter Lynch chart.
GuruFocus gives the company a financial strength rating of 4 out of 10 and a profitability rank of 5 out of 10. The Altman Z-Score of 1.43 places the company in the distress zone, yet the cash-to-debt ratio of 0.56 places it above 63.35% of the industry.
The Navigator Co.
The Navigator Co. was added to the portfolio for the first time in the second quarter. 356,019 shares were purchased at an average price of 2.26 euros per share. Overall, the purchase had an impact of 1.66%.
Navigator produces and sells pulp, paper and energy products. The company organizes itself into four segments based on product type. The majority of revenue comes from Europe.
July 31 saw shares trading at 2.16 euros with a market cap of 1.53 billion euros. According to the Peter Lynch chart, the sstock is trading below intrinsic value and is undervalued.
GuruFocus gives the company a financial strength rating of 5 out of 10, a profitability rank of 7 out of 10 and a valuation rank of 7 out of 10. The company’s operating and net margin percentages place it well above the industry average. Cash flows have remained relatively stable throughout the last several years.
Disclaimer: Author owns no stocks mentioned.
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