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James Li
James Li
Articles (464)  | Author's Website |

Tweedy Browne Global Value Fund Boosts 4 Positions in 1st Quarter

Fund managers also established 1 new position

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 (NYSE:WPP)(LSE:WPP), Inchcape PLC (LSE:INCH), Roche Holding AG (XSWX:ROG) and HSBC Holdings PLC (NYSE:HSBC)(LSE:HSBA). 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%.

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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.

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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.

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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%.

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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.

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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.

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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%.

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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.

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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%.

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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.

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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.

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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.

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Disclosure: No positions.

About the author:

James Li
I am an editorial assistant and researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

Visit James Li's Website


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