David Winters (Trades, Portfolio)’ Wintergreen Fund (Trades, Portfolio) is a global value fund that invests anywhere in the world in almost any asset class. In the fourth quarter, he bought four new stocks from three different countries. His portfolio, valued at $1.3 billion, contains 34 stock holdings. The investor has also garnered much attention recently for striking out at the management of Coca-Cola (KO, Financial), of which he has a large holding.
In his annual shareholder letter, Winters explained his portfolio positioning and desired stock criteria:
During the recent period, Wintergreen Fund (Trades, Portfolio), Inc. (the “Fund” or “Wintergreen”) has remained true to its core investment philosophy. The Fund remains concentrated with about 35 positions. We have watched as many other funds have morphed into quasi”index funds, holding hundreds of positions and being slightly overweight or underweight to their benchmark in select cases. We don’t believe that is what the goal of an actively managed mutual fund should be. We will not invest in securities that we don’t have conviction in or jump on the bandwagon only because they are going up. The Fund’s portfolio turnover remained low (13%) in 2014, as we remain long”term investors. We will not try to time stock markets. We continue to rely on our long” standing belief that the following three criteria are the hallmark of good investments:
· First, a business that has good or improving economics, and often generates sales and profits in multiple currencies and jurisdictions;
· Second, a management team that is working for the benefit of all shareholders and not just for its own short” term compensation; and
· Third, the security is available at a compelling price. During the dot”com mania of the late 90’s, there was a similar period of time when the value investing approach was out of favor. Technology stocks were untouchable; they had wild valuations and went up every day, seemingly with complete disregard to any underlying fundamentals. As you recall, shortly thereafter, the tech bubble collapsed, value returned to favor, and the long-term value approach performed very well. Staying true to our core principals worked then, and we firmly believe our investing process will again return to favor.
Winters’ fourth quarter stock picks were: Provident Financial Plc (LSE:PFG, Financial), Jupiter Fund Management Plc (LSE:JUP, Financial), Domtar Corp (TSX:UFS, Financial) and Frutarom Industries Ltd. (XTAE:FRUT, Financial).
Provident Financial Plc (LSE:PFG, Financial)
Winters bought 278,820 shares of Provident Financial Plc, a 0.82% portfolio weight. The company’s average share price for the quarter was £22.
Provident Financial Plc was incorporated on Aug. 31, 1960. Provident Financial Plc has a market cap of ÂŁ3.99 billion; its shares were traded at around ÂŁ27.37 with a P/E ratio of 26.70 and P/S ratio of 3.51. The dividend yield of Provident Financial Plc stocks is 3.23%. Provident Financial Plc had an annual average earnings growth of 1.90% over the past 10 years.
Jupiter Fund Management Plc (LSE:JUP, Financial)
Winters purchased 1,283,036 shares of Jupiter Fund Management, a 0.56% portfolio weight. The stock’s fourth quarter average share price was £4.
Jupiter Fund Management PLC acts as a holding company for a group of investment management companies. Jupiter Fund Management Plc has a market cap of ÂŁ1.92 billion; its shares were traded at around ÂŁ4.19 with a P/E ratio of 21 and P/S ratio of 4.93. The dividend yield of Jupiter Fund Management Plc stocks is 3.06%. Jupiter Fund Management Plc had an annual average earnings growth of 7.90% over the past five years.
Domtar Corp (TSX:UFS, Financial)
Winters purchased 38,767 shares of Domtar Corp, a 0.12% portfolio weight. Winters’ average price was $45 per share for the quarter.
Domtar Corp was incorporated in 2006. It is an integrated manufacturer and marketer of uncoated freesheet paper in North America. Domtar Corp has a market cap of $3.51 billion; its shares were traded at around $56.88 with a P/E ratio of 6.70 and P/S ratio of 0.52. The dividend yield of Domtar Corp stocks is 2.84%.
Frutarom Industries Ltd. (XTAE:FRUT, Financial)
Winters purchased 8,109 shares of Frutarom Industries, a 0.019% portfolio weight. The stock’s average price for the quarter was $128.
Frutarom Industries Ltd. was established in Israel in 1933. Frutarom Industries Ltd. has a market cap of $7.45 billion; its shares were traded at around $128.00 with a P/E ratio of 17.0 and P/S ratio of 1.73. The dividend yield of Frutarom Industries Ltd. stocks is 0.22%. Frutarom Industries Ltd. had an annual average earnings growth of 9.80% over the past five years.
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