Bill Nygren (Trades, Portfolio) of Oak Mark Fund is no newbie to the international market. Nygren added five new stocks to his profile, raising his total number of stocks in his profile to 59 with a total value of $15.499 billion.
As a value investor, Nygren invests in companies that are priced at a discount in relation to the estimate of their true business value. He also sees buying stocks as buying a portion of the business, so he makes careful selections on which businesses he is willing to partially own.
There are three key factors that go into choosing the stocks:
- As stated before, the stock price must be a direct correlation of the discounted rate to the estimated business value
- The stock must have a growing free cash flow
- The company must have a management team that thinks and acts like owners
Glencore PLC (GLEN, Financial) is the first and only European stock in Nygren's portfoilio, indicating he could possibly be testing the waters of investing in an international market, since this is also his first foreign stock in his portfolio.
Glecore PLC, formerly Glencore Xstrate PLC, was incorporated in 2011. The company produces and markets metals and minerals, energy products and agricultural products.
Nygren talks about why he sees Glencore as an attractive buy. According to the guru, "the market has overly discounted the effects of lower commodity prices and has provided us with an opportunity to buy Glencore at a compelling discount to value."
The current price of this stock is £3.36, equivalent to $5.27.
This chart shows the current price in relation to the company's revenue.
Three things we feel investors should be concerned about when investing in this stock include:
- The company's revenue has been in a 3-year decline
- Within 0.75 years, $2.6 billion has been issued in new debt
- Asset is building at 23.6% a year, while revenue growth rate is only at 10% over the past five years, meaning the company could be becoming less efficient.
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