David Herro (Trades, Portfolio), co-manager of the Oakmark International Fund, disclosed in a regulatory portfolio filing that his fund’s top five trades during the third quarter included new positions in Prosus NV (XAMS:PRX, Financial), Worldline SA (XPAR:WLN, Financial) and Vipshop Holdings Ltd. (VIPS, Financial) and reductions to its holdings in Naspers Ltd. (JSE:NPN, Financial) and Glencore PLC (LSE:GLEN, Financial).
The fund, part of Chicago-based Oakmark Funds, invests in the stock of international companies that are trading at discounts to intrinsic value and have the potential to increase shareholder value over time. Emphasis is placed on stocks with high-quality businesses and management teams who think and act as company owners.
As of Sept. 30, Oakmark International Fund’s $25.97 billion equity portfolio contains 67 stocks, with seven new positions and a quarterly turnover ratio of 10%. The fund’s top four sectors in terms of weight are financial services, consumer cyclical, industrials and health care, representing 25.81%, 24.57%, 10.84% and 10.63% of the equity portfolio.
Prosus
The fund purchased 6,189,626 shares of Prosus (XAMS:PRX, Financial), giving the stake 1.91% weight in the equity portfolio. Shares of Prosus averaged 74.45 euros ($83.69) during the third quarter.
GuruFocus ranks the Dutch interactive media company’s financial strength 5 out of 10 on the back of debt ratios underperforming more than half of global competitors despite the company having a high Altman Z-score of 14.
Steven Romick (Trades, Portfolio)’s FPA Crescent Fund and Invesco European Growth Fund (Trades, Portfolio) also have holdings in Prosus.
Worldline
The fund invested in 3,656,600 shares of Worldline (XPAR:WLN, Financial), allocating 1.07% of its equity portfolio to the position. Shares averaged 75.74 euros ($85.27) during the third quarter; the stock is undervalued based on Tuesday’s price-to-GF Value ratio of 0.70.
GuruFocus ranks the French payment software company’s profitability 7 out of 10 on the back of profit margins outperforming more than 60% of global competitors.
Vipshop
The fund purchased 20.62 million shares of Vipshop (VIPS, Financial), dedicating 0.88% of its equity portfolio to the holding. Shares averaged $15.77 during the third quarter; the stock is significantly undervalued based on Tuesday’s price-to-GF Value ratio of 0.51.
GuruFocus ranks the Chinese discount retail company’s financial strength 7 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7, a strong Altman Z-score of 4.25 and interest coverage ratios that are outperforming more than 83% of global competitors.
Naspers
The fund sold 2,227,193 shares of Naspers (JSE:NPN, Financial), chopping 62.78% of the position and 1.70% of its equity portfolio.
Shares of Naspers averaged 2,624.29 South African rand ($165.33) during the third quarter; the stock is significantly undervalued based on Tuesday’s price-to-GF Value ratio of 0.48.
GuruFocus ranks the South African interactive media company’s financial strength 4 out of 10 on the back of debt ratios underperforming more than 80% of global competitors despite the company having a strong Altman Z-score of 3.11.
Glencore
The fund sold 51,759,200 shares of Glencore (LSE:GLEN, Financial), trimming 22.83% of the position and 0.80% of its equity portfolio.
Shares of Glencore averaged 3.25 pounds ($4.30) during the third quarter; the stock is significantly overvalued based on Tuesday’s price-to-GF Value ratio of 1.48.
GuruFocus ranks the U.K.-based metals and mining company’s financial strength 4 out of 10 on several warning signs, which include a weak Altman Z-score of 1.63 and interest coverage and debt ratios that underperform over 80% of global competitors.
