The Wasatch International Growth (Trades, Portfolio) Fund, part of Wasatch Advisors, disclosed one new position when it released its second-quarter portfolio last week.
Managed by Roger Edgley, Ken Applegate and Linda Lasater, the Salt Lake City, Utah-based fund seeks long-term growth of capital by investing in small-cap growth companies in developed and emerging markets around the world.
The fund established a position in GB Group PLC (LSE:GBG, Financial), buying 885,285 shares for an average price of 5.12 pounds ($6.59) per share. The managers allocated 0.46% of the equity portfolio to the holding.
The British software company, which provides identity intelligence solutions, has a market cap of 950.42 million pounds; its shares closed at 6.22 pounds on Friday with a price-earnings ratio of 88.86, a price-book ratio of 6.02 and a price-sales ratio of 7.96.
According to the Peter Lynch chart below, the stock is overpriced since it is trading higher than its fair value.
GB Group’s financial strength was rated 8 out of 10 by GuruFocus. While the company has issued approximately 4.6 million pounds in new long-term debt over the past several years, it is at a manageable level due to sufficient interest coverage. In addition, the Altman Z-Score of 8.7 indicates the company is in good fiscal standing.
Supported by an expanding operating margin, the company’s profitability and growth scored a 7 out of 10 rating. It also has returns that outperform industry peers and a moderate Piotroski F-Score of 5, which suggests operations are stable. GB also has a business predictability rank of one out of five stars. According to GuruFocus, companies with this rank typically see their stock prices gain an average of 1.1% per year.
The fund holds 0.58% of GB Group’s outstanding shares. No other gurus have positions in the stock.
Other trades
During the quarter, the fund also added to many other positions, including Page Industries Ltd. (BOM:532827, Financial), Aveva Group PLC (LSE:AVV, Financial), Technology One Ltd. (ASX:TNE, Financial), Endurance Technologies Ltd. (BOM:540153, Financial) and TOA Paint (Thailand) PLC (BKK:TOA).
Wasatch’s $1.5 billion portfolio, which is composed of 86 stocks, is largely invested in the technology sector. According to its website, the fund outperformed its benchmark in 2017 with a return of 33%. The MSCI AC World Ex-U.S.A. Small Cap Index posted a 31.6% return.
Disclosure: No positions.
