David Herro (Trades, Portfolio) of the Oakmark International Fund purchased three new holdings during the fourth quarter across a variety of industries.
In his fourth quarter market commentary, Herro maintained a positive outlook despite troubled conditions in 2015, writing that low oil prices are still a positive for many aspects of the economy, and the eurozone is slowly recovering due to limited reforms.
“Overall, despite the negatives… the world economy is still expected to grow at a 3% rate,” Herro wrote.
Sumitomo Mitsui Financial Group Inc. (TSE:8316, Financial)
The fund purchased 7,114,000 shares for an average price of ¥4768.11 per share during the quarter. Sumitomo provides commercial banking and other financial services in Japan.
The stock price has declined 33% over the past year and currently trades at 7.8x earnings. In the third quarter of 2015 ended Dec. 31, Sumitomo reported EPS of ¥133.18, down from ¥213.36 in the year-ago quarter.
The operating margin level has held steady at about 30% since FY 2012.
The bank’s trailing dividend yield is 4.86%, and the payout ratio is 38%.
Grupo Televisa SAB (TV, Financial)
Herro bought 9,586,000 shares in Grupo Televisa, a media company that operates four broadcast channels in Mexico, for an average of $25.70 per share.
Over the past year, the stock has declined 25%, and now trades at 27.5x earnings. GuruFocus rates Grupo Televisa’s business predictability as 3.5 out of 5 stars based on revenue and earnings growth. During the third quarter, the company earned 67 cents per share, an improvement from losses of 2 cents per share in the prior year.
The dividend yield is 0.44%, and the low payout ratio of 9% indicates the company has room to continue growing the dividend.
Wolseley PLC (LSE:WOS, Financial)
The fund’s third purchase during the quarter was 526,000 shares in Wolseley for an average £37.45 per share. Herro had closed out a prior position in the previous quarter, and reopened a holding as Wolseley’s stock price has continued to lower.
The company is a trade distributor of plumbing and heating products, as well as a supplier of building materials. In FY 2015 ended July, the company reported EPS of 82 pence, down from £1.89 in the prior year.
The trailing dividend yield of 2.46% is close to the five-year high, and the payout ratio is 69%.
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