During the second quarter, the Oakmark International Small Cap fund led by David Herro (Trades, Portfolio), purchased three new stocks for the portfolio. The fund returned 2% for the quarter and 11% year to date, while the MSCI World ex U.S. Small Cap Index returned 4% and 8%, respectively.
In the second quarter commentary, Herro wrote that the top performing holding was Julius Baer Group (XSWX:BAER, Financial), while the top detractor was Atea (OSL:ATEA, Financial).
EFG International (XSWX:EFGN, Financial)
Herro purchased 3,643,000 shares of EFG International at an average price of CHF 13.28 per share. The stock now has a 1.75% portfolio weighting.
EFG is a Swiss banking company that provides private banking and asset management services. The stock rose just 3% over the past year, closing at CHF 10.35 on Aug. 21 with a P/E of 26.3. After reporting losses in 2010 and 2011, EPS in 2014 was CHF 0.40.
EFG pays a dividend yield of 2.49%, which is close to the company’s five-year high. The payout ratio is 34%.
MITIE Group PLC (LSE:MTO, Financial)
Herro bought 10,302,000 shares of MITIE Group, which traded for an average price of £3.01 during the quarter. MITIE is a British strategic outsourcing and energy services company, whose services include infrastructure consultancy, facilities management, and property management.
The stock price declined 11% over the past year, closing at £2.82 on Aug. 24 with a P/E of 30.8. The annual revenue growth rate over the past five years was 4.2%, while EBITDA declined 2.9%. After steady rises in EPS each year until 2012, MITIE’s earnings have fluctuated in the time since, reporting at £0.09 in 2015.
The company’s dividend yield is near its 10-year high at 4.15%, while the payout ratio is equally high at 119%.
Herro’s third purchase was 299,000 shares of ALS for an average of AUD 5.58 per share. The stock now has a 0.05% portfolio weighting.
ALS provides analytical testing services to four main markets: minerals, life sciences, energy, and industrial. The stock dropped 39% over the past year to close at AUD 4.66 on Aug. 24.
In FY 2015, ALS reported loss per share of AUD 0.43 compared to earnings per share of AUD 0.41 the year before. This can be attributed to the challenging market for ALS’ services due to falling commodity prices.
The dividend yield is close to the two-year low at 4.9%, and the payout ratio is 163%.
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