The Matthews Pacific Tiger Fund (Trades, Portfolio), part of investment firm Matthews Asia, established positions in three stocks and divested of one other holding in the third quarter.
With a portfolio of 66 stocks, managers Sharat Shroff and Rahul Gupta seek long-term capital appreciation by investing in Asian companies, excluding Japan. They use bottom-up, fundamental research to identify companies capable of sustained growth and have an active management team. With $8.66 billion in assets under management as of Sept. 30, the portfolio is largely composed of stocks in the financial and consumer defensive sectors.
The fund invested in Orion Corp. (XKRX:271560, Financial), United Spirits Ltd. (BOM:532432, Financial) and Just Dial Ltd. (BOM:535648, Financial).
Orion
The fund purchased 1.7 million shares of Orion for an average price of 88,929.5 won ($79.70) per share, giving it 1.75% portfolio space.
The Korean confectioner has a market cap of 4.61 trillion won; its shares were trading around 116,500 won on Monday with a price-earnings (P/E) ratio of 812.03.
The trend in the stock price is illustrated in the chart below.
GuruFocus ranked the company’s financial strength 4 of 10 and its profitability and growth 2 of 10.
With 4.38% of outstanding shares, the fund is the only guru holding the stock.
United Spirits
The Pacific Tiger Fund bought 1.18 million shares of United Spirits for 2,572.11 rupees ($39.75) per share, expanding the portfolio 0.52%.
The Indian beverage company has a market cap of 450.62 billion rupees; its shares were trading around 3,100.55 rupees on Monday with a P/E ratio of 55.12.
According to the Peter Lynch chart below, the stock is trading above its fair value.
GuruFocus ranked United Spirits’ financial strength 4 of 10 and its profitability and growth 5 of 10.
The fund holds 0.81% of the company’s outstanding shares.
Just Dial
The fund invested in 3.56 million shares of Just Dial for an average price of 372.49 rupees per share. The trade had an impact of 0.24% on the portfolio.
The Indian search engine has a market cap of 32.22 billion rupees; its shares were trading around 477.95 rupees on Monday with a P/E ratio of 24.42.
Based on the Peter Lynch chart below, the stock is trading above its intrinsic value.
GuruFocus ranked the company’s financial strength 9 of 10 and its profitability and growth 9 of 10.
The fund holds 5.28% of Just Dial’s outstanding shares.
Lenovo
During the quarter, the fund closed its Lenovo Group Ltd. (HKSE:00992, Financial) position, selling 73.4 million shares for an average price of 0.58 Hong Kong dollars (7 cents) per share. The trade had an impact of -0.59% on the portfolio. According to GuruFocus estimates, the fund lost 57% on the investment since the fourth quarter of 2012.
The Chinese computer hardware manufacturer has a market cap of 53.32 billion Hong Kong dollars; its shares were trading around 4.53 Hong Kong dollars on Monday with a P/E ratio of 22.09.
Disclosure: I do not own any stocks mentioned.
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