David Winters (Trades, Portfolio) formed Wintergreen Advisers in 2005, whose Wintergreen Fund (Trades, Portfolio) now manages $1.5 billion in assets.
The fund follows a global approach to investing that combines strategies such as activism and arbitrage, investing in distressed companies or those at risk of bankruptcy, and hedging.
In the fund’s fourth quarter commentary, Winters wrote that he sees the decline of oil prices as presenting more opportunity than peril.
“Auto sales, travel and entertainment are just a few of the sectors buoyed by cheaper gasoline, as dollars once earmarked for gas will now be redirected elsewhere in the economy,” he wrote.
During the fourth quarter, the fund purchased four new holdings, with a quarter-over-quarter turnover of 4%.
Provident Financial (LSE:PFG, Financial)
The fund purchased 278,820 shares of Provident Financial, which traded for an average price of £22.27 during the quarter. The company has a 0.82% portfolio weighting.
Provident Financial is a leading supplier of personal credit products in the non-standard lending market in the U.K. The consumer credit division provides home credit and collects payments every week. The company also offers the Vanquis Visa card, which has limits lower than mainstream lenders.
The company’s EBIT per share in FY 2013 was £1.84. Over the past five years, this figure had grown about 20%.
In 2013, the operating margin was 23.8%, down from 27.42% the year before. However, over the past five years, the margin has increased by about 15%.
The stock currently trades at £27.24 with a P/E ratio of 26.7 and P/S ratio of 3.51.
Jupiter Fund Management (LSE:JUP, Financial)
The fund picked up 1,283,036 shares of Jupiter Fund for an average price of £3.54. The new holding has a 0.56% portfolio weighting.
Jupiter is a holding company for a group of investment management companies, with operations in the U.K., Bermuda, Germany, and Singapore.
EBIT per share in FY 2013 was £0.26. The following graph shows the earnings trend over time.
Looking at the balance sheet, the current ratio is a comfortable 1.82, and the company has been gradually paying off its long-term debt.
The stock currently trades at £ with a P/E ratio of 21 and P/S ratio of 4.93.
Domtar Corp (TSX:UFS, Financial)
The fund also purchased 38,767 shares of Domtar for an average price of C$44.82 per share. The new holding accounts for 0.12% of the portfolio.
Domtar manufactures and distributes a wide variety of fiber-based products such as specialty, packing, and absorbent hygiene papers.
The stock has declined 7% over the past year and currently trades at C$56.88. The Peter Lynch chart indicates the stock may be undervalued.
Domtar’s EBIT per share jumped to C$6.47 in FY 2014, up from C$2.56 the year before. Over the past five years, however, earnings declined 11.8%.
The current P/E ratio is 6.8, while the P/S ratio is 0.51.
Frutarom Industries (XTAE:FRUT, Financial)
The fund’s fourth purchase during the quarter was 8,109 shares of Frutarom Industries for an average price of $101.60 per share. The company has a 0.02% portfolio weighting.
The company develops and sells ingredients used in the manufacture of food, beverages, fragrance, and personal care products.
Frutarom’s EBIT per share for the trailing 12 months is $7.56, which has been steadily increasing over time.
The current dividend yield is 0.22%, which is close to the three-year low. The payout ratio is 6%.
The stock has been up 40% over the past year and currently trades at $128.00 with a P/E ratio of 17 and P/S ratio of 2.33.
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