In the second quarter, the Wintergreen Fund (Trades, Portfolio) sold out of two holdings. They are Sun Hung Kai Properties Ltd. (HKSE:0016, Financial) and Coca-Cola Co. (KO, Financial).
The Wintergreen Fund (Trades, Portfolio) was established in 2005 by David Winters (Trades, Portfolio), who serves as CEO and portfolio manager. The fund invests in equity securities of undervalued companies around the world. It seeks to identify securities through extensive research and analysis, taking into consideration the relationship of book-to-market value, cash flow and multiples of earnings.
Sun Hung Kai
The fund sold all 2,388,543 shares in the company for an average price of 92.24 Hong Kong dollars ($11.89) per share. The transaction had an impact of -6.13% on the portfolio.
Sun Hung Kai is engaged in the development and investment of properties for sale and rent. It is also involved in hotel operations, telecommunications, transportation, infrastructure and logistics. The company is headquartered in Hong Kong.
The company has a market cap of 316.2 billion Hong Kong dollars with an enterprise value of 377.4 billion Hong Kong dollars. It has a price-earnings (P/E) ratio of 10.5 with a forward P/E of 12.7. Its price-book (P/B) ratio is 0.7, and its price-sales (P/S) ratio is 4.6.
GuruFocus ranked the company’s financial strength 6 of 10. Its Piotroski F-Score is 4, indicating a stable financial condition. Its Altman Z-Score is 2.7, placing it in the safe zone. The company’s cash-debt ratio is 0.31, slightly below the industry median of 0.35.
GuruFocus ranked the company’s profitability and growth 7 of 10. Its operating margin is 33.8%, and its net margin is 43.3%. It has a return on equity (ROE) of 6.7% and a return on assets (ROA) of 5.04%, which are ranked above 51% and 71% of other companies in the industry.
The DCF Calculator gives the stock a fair value of 129.24 Hong Kong dollars. On Friday, the stock was trading at 109.3 Hong Kong dollars.
Wintergreen acquired its initial holding in the company in the second quarter of 2013.
Coca-Cola
The fund sold 315,473 shares in Coca-Cola for an average price of $45.19 per share. The transaction had an impact of -3.1% on the portfolio.
Coca-Cola manufactures, distributes and markets nonalcoholic beverage concentrates and syrups. Its products range from bottled water to carbonated beverages. The company owns and markets four of the world’s top five soft drink brands: Coca-Cola, Diet Coke, Fanta and Sprite. The company’s headquarters are in Atlanta.
The company has a market cap of $188.6 billion with an enterprise value if $212.8 billion. It has a P/E of 24.8 with a forward P/E of 22.7. Its P/B is 7.1, and its P/S is 4.4.
GuruFocus ranked Coca-Cola’s financial strength 6 of 10. Its Piotroski F-Score is 6, indicating a stable financial condition. Its Altman Z-Score is 3.5, placing it in the safe zone. The company’s cash-debt ratio is 0.5, below the industry median of 0.76.
GuruFocus ranked the company’s profitability and growth 7 of 10. Its operating margin is 20.6%, and its net margin is 17.6%. It has a ROE of 28.9% and a ROA of 8.24%, which are ranked above 90% and 68% of other companies in the industry.
The DCF Calculator gives the stock a fair value of $19.84. On Friday, the stock was trading for $43.67.
Wintergreen has been reducing its stake in Coca-Cola since the first quarter of 2015.
Disclosure: I do not own stock in any companies mentioned in the article.
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