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David Goodloe
David Goodloe
Articles (769) 

MS Global Franchise Fund Boosts Holdings in 3rd Quarter

Coca-cola, Microsoft, tobacco companies among guru's purchases

MS Global Franchise Fund (Trades, Portfolio) added to more than two dozen positions in its portfolio in the third quarter. The fund’s top eight additions were as follows:

The fund added to its position of Pernod Ricard SA (XPAR:RI), a Paris-based beverage company, by more than 40%, buying 68,398 shares for an average price of 102.98 euros ($110.66) per share. The transaction had a 1.05% impact on the portfolio.

David Herro (Trades, Portfolio) is Pernod Ricard’s leading shareholder among the gurus with a stake of 1,931,000 shares. The stake is 0.73% of the company’s outstanding shares.

Pernod Ricard has a price-earnings (P/E) ratio of 20.99, a forward P/E of 17.36, a price-book (P/B) ratio of 1.94 and a price-sales (P/S) ratio of 2.98. GuruFocus gives Pernod Ricard a Financial Strength rating of 5/10 and a Profitability and Growth rating of 7/10 with return on equity (ROE) of 9.23% that is higher than 60% of the companies in the Global Beverages – Wineries and Distilleries industry and return on assets (ROA) of 4.01% that is higher than 52% of the companies in that industry.

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Pernod Ricard sold for 97.62 euros per share Tuesday. The DCF Calculator gives Pernod Ricard a fair value of 49.76 euros.

The fund increased its stake of Unilever PLC (LSE:ULVR), a consumer goods company with offices in the Netherlands and London, by more than 17% with the purchase of 170,816 shares for an average price of 35.81 pounds ($45.58). The deal had a 1.05% impact on the portfolio.

Tweedy Browne (Trades, Portfolio) Global Value is Unilever’s leading shareholder among the gurus with a stake of 2,725,044 shares. The stake is 0.09% of the company’s outstanding shares.

Unilever has a P/E ratio of 24.04, a forward P/E of 19.05, a P/B ratio of 7.84 and a P/S ratio of 2.32. GuruFocus gives Unilever a Financial Strength rating of 6/10 and a Profitability and Growth rating of 7/10 with ROE of 33.37% that is higher than 93% of the companies in the Global Household & Personal Products industry and ROA of 9.42% that is higher than 81% of the companies in that industry.

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Unilever sold for 31.11 pounds per share Wednesday. The DCF Calculator gives Unilever a fair value of 13.3 pounds.

The fund raised its position of Coca-Cola Co. (NYSE:KO), the Atlanta-based beverage company, by more than 45% with the purchase of 113,029 shares for an average price of $43.82 per share. The transaction had a 0.62% impact on the portfolio.

Warren Buffett (Trades, Portfolio) is Coca-Cola’s leading shareholder among the gurus with a stake of 400 million shares. The stake is 9.27% of Coca-Cola’s outstanding shares.

Coca-Cola has a P/E ratio of 25.15, a forward P/E of 20.20, a P/B ratio of 6.87 and a P/S ratio of 4.30. GuruFocus gives Coca-Cola a Financial Strength rating of 6/10 and a Profitability and Growth rating of 7/10 with ROE of 27.91% that is higher than 91% of the companies in the Global Beverages – Soft Drinks industry and ROA of 7.80% that is higher than 68% of the companies in that industry.

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Coca-Cola sold for $41.29 per share Wednesday. The DCF Calculator gives Coca-Cola a fair value of $18.82.

The fund boosted its holding of Reynolds American Inc. (NYSE:RAI), a North Carolina-based tobacco company, by nearly 11% with the purchase of 74,050 shares for an average price of $50.16 per share. The deal had a 0.45% impact on the portfolio.

Barrow, Hanley, Mewhinney & Strauss is Reynolds American’s leading shareholder among the gurus with a stake of 5,095,964 shares. The stake is 0.36% of Reynolds American’s outstanding shares.

Reynolds American has a P/E ratio of 14.73, a forward P/E of 21.32, a P/B ratio of 3.66 and a P/S ratio of 6.22. GuruFocus gives Reynolds American a Financial Strength rating of 5/10 and a Profitability and Growth rating of 7/10 with ROE of 27.28% and ROA of 10.38% that are higher than 60% of the companies in the Global Tobacco industry.

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Reynolds American sold for $55.4 per share Wednesday. The DCF Calculator gives Reynolds American a fair value of $48.42.

The fund increased its position of British American Tobacco PLC (LSE:BATS), a London-based tobacco company, by almost 4%, buying 33,099 shares for an average price of 48.3 pounds per share. The transaction had a 0.27% impact on the portfolio.

Causeway International Value (Trades, Portfolio) is British American Tobacco’s leading shareholder among the gurus with a stake of 2,758,881 shares. The stake is 0.15% of the company’s outstanding shares.

British American Tobacco has a P/E ratio of 18.62, a forward P/E of 17.09, a P/B ratio of 13.18 and a P/S ratio of 6.14. GuruFocus gives British American Tobacco a Financial Strength rating of 5/10 and a Profitability and Growth rating of 6/10 with ROE of 76.21% that is higher than 86% of the companies in the Global Tobacco industry and ROA of 13.43% that is higher than 67% of the companies in that industry.

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British American Tobacco sold for 43.53 pounds per share Wednesday. The DCF Calculator gives British American Tobacco a fair value of 34.3 pounds.

Likewise the fund boosted its stake of Microsoft Corp. (NASDAQ:MSFT), a technology company based in Washington state, by nearly 4% with the purchase of 36,796 shares for an average price of $56.45 per share. The deal had a 0.27% impact on the portfolio.

PRIMECAP Management (Trades, Portfolio) is Microsoft’s leading shareholder among the gurus with a stake of 56,519,174 shares. The stake is 0.73% of Microsoft’s outstanding shares.

Microsoft has a P/E ratio of 29.34, a forward P/E of 20.37, a P/B ratio of 6.79 and a P/S ratio of 5.75. GuruFocus gives Microsoft a Financial Strength rating of 6/10 and a Profitability and Growth rating of 7/10 with ROE of 22.30% that is higher than 86% of the companies in the Global Software – Infrastructure industry and ROA of 8.80% that is higher than 77% of the companies in that industry.

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Microsoft sold for $61.37 per share Wednesday. The DCF Calculator gives Microsoft a fair value of $22.37.

The fund increased its holding of Reckitt Benckiser Group PLC (LSE:RB.), a British consumer goods company, by nearly 4%, buying 22,153 shares for an average price of 73.91 pounds per share. The transaction had a 0.27% impact on the portfolio.

The company has a P/E ratio of 30.19, a forward P/E of 19.61, a P/B ratio of 6.42 and a P/S ratio of 5.34. GuruFocus gives the company a Financial Strength rating of 7/10 and a Profitability and Growth rating of 6/10 with ROE of 23.01% that is higher than 86% of the companies in the Global Household & Personal Products industry and ROA of 9.92% that is higher than 82% of the companies in that industry.

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Reckitt Benckiser Group sold for 65.38 pounds per share Wednesday. The DCF Calculator gives Reckitt Benckiser a fair value of 32.7 pounds.

The fund boosted its position of L’Oreal SA (XPAR:OR), a French cosmetics company, by almost 4% with the purchase of 10,001 shares for an average price of 171.34 euros per share. The deal had a 0.24% impact on the portfolio.

L’Oreal has a P/E ratio of 31.41, a forward P/E of 23.20, a P/B ratio of 4.08 and a P/S ratio of 3.60. GuruFocus gives L’Oreal a Financial Strength rating of 8/10 and a Profitability and Growth rating of 9/10 with ROE of 12.67% that is higher than 68% of the companies in the Global Household & Personal Products industry and ROA of 8.47% that is higher than 77% of the companies in that industry.

L’Oreal sold for 160.8 euros per share Wednesday. The DCF Calculator gives L’Oreal a fair value of 55.84 euros.

Disclosure: I do not own any stocks mentioned in this article.

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About the author:

David Goodloe
I'm a journalist by training. I grew up in Arkansas and earned my B.A. at the University of Arkansas. I earned my master's degree at the University of North Texas. My background includes stints at newspapers in Arkansas and Texas and teaching news writing and news editing to students at the University of Oklahoma and Richland College here in Dallas. I'm a writer/editor at GuruFocus.

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