MS Global Franchise Portfolio's Top 5 1st-Quarter Buys

Fund releases quarterly portfolio

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May 31, 2022
Summary
  • Fund establishes new positions in Otis Worldwide and Equifax.
  • It also boosts holdings in Nike, LVMH and Danaher.
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MS Global Franchise Portfolio (Trades, Portfolio), part of Morgan Stanley’s (MS, Financial) mutual funds, disclosed in a regulatory filing that its top five buys during the first quarter included new positions in Otis Worldwide Corp. (OTIS, Financial) and Equifax Inc. (EFX, Financial) and boosts to its holdings in Nike Inc. (NKE, Financial), LVMH Moet Hennessy Louis Vuitton SE (XPAR:MC, Financial) and Danaher Corp. (DHR, Financial).

The fund follows a bottom-up investing style with emphasis on security selection. The investment team looks for high-quality businesses with sustainable returns on capital and gross margins. The fund assigns sector, industry and stock weights based on an assessment of each stock’s quality and valuation characteristics.

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As of March, the fund’s $3.55 billion equity portfolio contains 33 stocks with a quarterly turnover ratio of 5%. Investors should be aware that portfolio updates for mutual funds do not necessarily provide a complete picture of a guru’s holdings. The data is sourced from the quarterly updates on the website of the fund(s) in question. This usually consists of long equity positions in U.S. and foreign stocks. All numbers are as of the quarter’s end only; it is possible the guru may have already made changes to the positions after the quarter ended. However, even this limited data can provide valuable information.

Otis Worldwide

The fund purchased 676,325 shares of Otis Worldwide (

OTIS, Financial), giving the position 1.47% weight in the equity portfolio. Shares averaged $79.93 during the first quarter.

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The Farmington, Connecticut-based elevator and escalator manufacturing company has a GF Score of 29 out of 100 based on a profitability rank of 6 and a financial strength rank of 5. However, the stock the does not have data to compute a growth rank, a GF Value rank and a momentum rank and thus, the GF Score may give an incomplete picture of a stock’s potential.

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Other gurus with holdings in Otis include Dodge & Cox,

Andreas Halvorsen (Trades, Portfolio)’s Viking Global Partners and Jeremy Grantham (Trades, Portfolio)’s GMO.

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Equifax

The fund invested in 81,981 shares of Equifax (

EFX, Financial), giving the position 0.55% equity portfolio weight. Shares averaged $235.50 during the first quarter; the stock is modestly undervalued based on Tuesday’s price-to-GF Value ratio of 0.90.

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The Atlanta-based credit report company has a GF Score of 86 out of 100 based on a profitability rank of 8 out of 10, a financial strength rank of 5 out of 10 and a rank of 7 out of 10 for growth, momentum and GF Value.

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Other gurus with holdings in Equifax include

Al Gore (Trades, Portfolio)’s Generation Investment Management and Bill Nygren (Trades, Portfolio)’s Oakmark Fund.

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Nike

The fund added 144,142 shares of Nike (

NKE, Financial), boosting the position by 52.87% and its equity portfolio by 0.55%.

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Shares of Nike averaged $140.68 during the first quarter; the stock is modestly undervalued based on Tuesday’s price-to-GF Value ratio of 0.86.

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The Beaverton, Oregon-based sports apparel giant has a GF Score of 93 out of 100 based on a momentum rank of 5 out of 10, a financial strength rank of 8 and a rank of 9 out of 10 for profitability, growth and GF Value.

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LVMH Moet Hennessy Louis Vuitton

The fund purchased 26,133 shares of LVMH Moet Hennessy Louis Vuitton (

XPAR:MC, Financial), boosting the position by 32.32% and its equity portfolio by 0.53%.

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Shares of LVMH Moet Hennessy Louis Vuitton averaged 668.54 euros ($717.61) during the first quarter; the stock is fairly valued based on Tuesday’s price-to-GF Value ratio of 1.05.

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The Paris-based luxury retailer has a GF Score of 96 out of 100, driven by a rank of 10 out of 10 for profitability and growth, a financial strength rank of 6 out of 10 and a rank of 7 out of 10 for GF Value and momentum.

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Danaher

The fund added 56,294 shares of Danaher (

DHR, Financial), boosting the position by 9.98% and its equity portfolio by 0.46%.

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Shares of Danaher averaged $282.37 during the first quarter; the stock is fairly valued based on Tuesday’s price-to-GF Value ratio of 0.92.

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The Washington, D.C.-based life sciences and diagnostics company has a GF Score of 89 out of 100 based on a growth rank of 9 out of 10, a profitability rank of 8 out of 10, a GF Value rank of 7 out of 10, a financial strength rank of 6 out of 10 and a momentum rank of 5 out of 10.

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Disclosures

I am/we currently own positions in the stocks mentioned, and have NO plans to sell some or all of the positions in the stocks mentioned over the next 72 hours. Click for the complete disclosure
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