The Tweedy Browne (Trades, Portfolio) Global Value Fund seeks long-term capital appreciation primarily through foreign equity investments using a Benjamin Graham-style investing approach.
During the first quarter, fund managers William Browne, Thomas Shrager, John Spears and Robert Wyckoff expanded their positions in WPP PLC (WPP, Financial)(LSE:WPP, Financial), Inchcape PLC (LSE:INCH, Financial), Roche Holding AG (XSWX:ROG, Financial) and HSBC Holdings PLC (HSBC, Financial)(LSE:HSBA, Financial). The fund also initiated a position in Shizuoka Gas Co. Ltd. (TSE:9543).
WPP PLC
The Global Value Fund expanded its WPP PLC position 69.07%, purchasing 6,111,137 shares for an average price of 12.84 pounds ($18.24) per share. With this transaction, the fund managers stretched the portfolio 1.09%.
WPP, a U.K.-based advertising company, provides various public relations and consulting services around the world. The company’s profitability ranks 8 out of 10 as the company has strong revenue growth and expanding operating margins. Additionally, WPP’s GuruFocus business predictability ranks four stars out of five, suggesting consistent earnings growth.
Other positive investing signs include a dividend yield near a 10-year high and a price-sales ratio near a five-year low. WPP’s dividend yield of 4.85% outperforms 94% of global competitors.
Inchcape PLC
The fund managers made a big bet on Inchcape, adding 3,692,396 shares for an average price of 7.16 pounds per share. The transaction increased the portfolio 0.4%.
Inchcape distributes new vehicles and auto parts across the U.K. and various emerging markets. The company’s profitability ranks 7 out of 10: Inchcape has expanding operating margins despite underperforming 60% of global competitors.
Inchcape’s Piotroski F-score ranks a strong 7 out of 10, suggesting good business operations. The company also has good financial strength, with interest coverage around 10 and an Altman Z-score above 3.
Roche Holding
Tweedy Browne’s Global Value Fund added 114,050 non-equity voting shares of Roche Holding for an average price of 228.41 Swiss francs ($235.96) per share. The transaction increased the portfolio 0.29%.
According to the company's website, Roche Holding offers two types of securities. The “bearing” shares trade under XSWX:RO, while the “non-equity voting” shares trade under XSWX:ROG.
The Swiss biopharmaceutical company develops various oncology products and therapies, which account for approximately 60% of sales. Roche’s operating margin outperforms 87% of global competitors despite contracting approximately 4.5% per year over the past five years. GuruFocus still ranks Roche’s profitability 7 out of 10 as the company’s return on equity and return on assets outperform 95% and 83% of global drug manufacturers.
HSBC Holdings
The fund managers added 463,382 shares of HSBC Holdings for an average price of 7.36 pounds per share. The transaction increased the portfolio 0.05%.
U.K.-based HSBC provides various financial services, including commercial banking, global banking and wealth management. GuruFocus ranks HSBC’s profitability 3 out of 10 as the company’s margins and returns underperform at least 60% of global competitors.
Shizuoka
The Global Value Fund invested in 193,700 shares of Shizuoka for an average price of 937.52 yen ($8.74) per share. The position represents just 0.02% of the portfolio.
Shizuoka distributes electric power and gas through its pipeline network across Japanese municipalities between Tokyo and Nagoya. Although the company has strong financial strength, Shizuoka’s profitability ranks a weak 4 out of 10 primarily due to a negative five-year compound annual growth rate of sales and operating margins that underperform 73% of global competitors.
Disclosure: No positions.
