Charles de Vaulx (Trades, Portfolio), manager of the International Value Funds, disclosed Wednesday his IVA Worldwide Fund established 10 positions during fourth-quarter 2017. The fund’s top four buys are AIB Group PLC (LSE:AIBG, Financial), Schlumberger Ltd. (SLB, Financial), DaVita Inc. (DVA, Financial) and Omnicom Group Inc. (OMC, Financial).
AIB Group
The IVA Worldwide Fund invested in 11,411,630 shares of AIB Group for an average price of 5.25 euros ($6.41) per share, representing 1.7% of the portfolio.
Formerly known as Allied Irish Banks PLC, AIB Group provides various financial services to retail, business and corporate customers from approximately 200 branches. The company’s financial strength ranks 6 out of 10 primarily due to good equity-to-asset ratios and negligible debt. The former outperforms 84% of European banks.
Schlumberger
The fund invested in 806,458 shares of Schlumberger for an average price of $64.83 per share, representing 1.23% of the portfolio.
Schlumberger CEO Paal Kibsgaard mentioned that revenues increased during the quarter primarily due to “strong activity in North America, Saudi Arabia and Latin America.” Despite this, the Houston-based energy services company still posted an as-reported net loss of $1.505 billion, driven by higher operating costs and impairment charges.
GuruFocus ranks Schlumberger’s profitability a modest 5 out of 10 as the company’s net margin and three-year CAGR of sales underperform 52% of global competitors. The company has three severe warning signs, including contracting operating margins and revenues over the past five years.
Tom Gayner (Trades, Portfolio), Steven Cohen (Trades, Portfolio) and Jeremy Grantham (Trades, Portfolio) trimmed their positions in Schlumberger as the company offers low growth potential.
DaVita
The fund invested in 375,167 shares of DaVita for an average price of $61.55 per share, representing 0.61% of the portfolio.
Denver-based DaVita provides lab services in dialysis centers and other contracted U.S. hospitals. As of Dec. 31, 2017, the company provided services to approximately 220,600 patients, up approximately 17,000 from the prior year.
DaVita’s profitability ranks 7 out of 10, driven by expanding operating margins and good returns on capital based on Joel Greenblatt (Trades, Portfolio)’s definition. The former outperforms 61% of global competitors while the latter outperforms 76%.
Omnicom Group
The fund invested in 339,445 shares of Omnicom for an average price of $71.74 per share, representing 0.56% of the portfolio.
The New York-based advertising agency still has a GuruFocus business predictability rank of five stars even though revenues declined approximately 0.9% from 2016 to 2017. Omnicom’s profitability ranks 8 out of 10, primarily due to the five-star predictability rank, a strong Piotroski F-score of 7 and expanding operating margins.
See also
You can view the IVA Worldwide Fund’s portfolio here. De Vaulx also manages the IVA International Fund (Trades, Portfolio).
Disclosure: I do not have positions in the stocks mentioned.
