(GuruFocus, November 12, 2009) Investment Gurus at money management firm Tweedy, Browne Fund Inc. pulled off an remarkable quarter again for 3Q09. The flagship fund Tweedy, Browne Global Value Fund returned 15.79% for the quarter, beating the 15.04% return of the benchmark MSCI EAFE Index (Hedged to USD).
Long term, the comparison is even more remarkable, the fund returned 4.70, -2.87, 4.79, 5.48, 9.74% during the past 1, 3, 5, 10, and since inception (6/15/93) respectively, whereas the benchmark returned 0.93, -5.95, 5.01, 1.12, 5.19% during the same periods respectively. The actively managed fund wins the 1, 3, 10, and since inception race.
Commenting on the strong performance of the past week, the money managers provided the following perspective in the quarterly letter:
Looking forward, the managers admitted that bargain are hard to get by but also contested that their top holdings are not that expensive. From the same quarterly letter:
Here are the fund management firm’s top holdings:
No. 1: PHILIP MORRIS INTERNATIONAL INC (PM, Financial), Weightings: 9.29% - 3,524,933 Shares
Philip Morris International is the leading international tobacco company, with products sold in over 160 countries. They own 7 of the top 15 brands in the world and have a strong mix of international and local products that seek to appeal to a wide array of adult smokers. Philip Morris International Inc has a market cap of $96.65 billion; its shares were traded at around $49.96 with a P/E ratio of 15.6 and P/S ratio of 1.5. The dividend yield of Philip Morris International Inc stocks is 4.6%.
No. 2: CocaCola FEMSA S.A.B. de C.V. (KOF, Financial), Weightings: 7.94% - 3,053,061 Shares
Coca-Cola Femsa S.A., through its subsidiaries, produces, markets and distributes soft drinks throughout the metropolitan area of Mexico City, in Southeastern Mexico and in metropolitan Buenos Aires, Argentina. The Company produces ``Coca-Cola,`` ``Sprite,`` ``Fresca,`` ``Quatro,`` ``Powerade,`` ``Extra Poma, `` ``Etiqueta Azul`` and ``Kin.`` Cocacola Femsa S.a.b. De C.v. has a market cap of $9.8 billion; its shares were traded at around $53.05 with a P/E ratio of 13 and P/S ratio of 1.3. The dividend yield of Cocacola Femsa S.a.b. De C.v. stocks is 1%. Cocacola Femsa S.a.b. De C.v. had an annual average earning growth of 17.6% over the past 10 years. GuruFocus rated Cocacola Femsa S.a.b. De C.v. the business predictability rank of 3.5-star.
No. 3: Emerson Electric Co. (EMR, Financial), Weightings: 5.88% - 2,711,730 Shares
Emerson is engaged principally in the worldwide design, manufactureand sale of a broad range of electrical, electromechanical and electronicproducts and systems. The divisions of the company are organized into the following business segments based on the nature of the products and services provided: Process Control; Industrial Automation; Electronics and Telecommunications; Heating, Ventilating and Air Conditioning; and Appliance and Tools. Emerson Electric Co. has a market cap of $31.06 billion; its shares were traded at around $41.33 with a P/E ratio of 17.2 and P/S ratio of 1.5. The dividend yield of Emerson Electric Co. stocks is 3.2%. Emerson Electric Co. had an annual average earning growth of 5% over the past 10 years.
No. 4: Burlington Northern Santa Fe Corp. (BNI, Financial), Weightings: 5.64% - 1,305,389 Shares
Burlington North/Santa Fe, through its subsidiary The Burlington Northern and Santa Fe Railway Company, operates one of the largest railroad networks in North America. This vast network covers the western two-thirds of the United States, stretching from major Pacific Northwest and Southern California ports to the Midwest, Southeast and Southwest, and from the Gulf of Mexico to Canada. Burlington Northern Santa Fe Corp. has a market cap of $33.32 billion; its shares were traded at around $97.99 with a P/E ratio of 18.9 and P/S ratio of 1.8. The dividend yield of Burlington Northern Santa Fe Corp. stocks is 1.6%. Burlington Northern Santa Fe Corp. had an annual average earning growth of 8.1% over the past 10 years. GuruFocus rated Burlington Northern Santa Fe Corp. the business predictability rank of 2.5-star.
No. 5: SK Telecom Co. Ltd. (SKM, Financial), Weightings: 5.52% - 5,853,247 Shares
SK Telecom Co. is the world's first commercial CDMA digital cellular service. As of September 30, 1997, they have provided the highest quality service for more than 4 million cellular customers which includes 2.3 million digital cellular customers, and 7.1 million paging customers. Sk Telecom Co. Ltd. has a market cap of $11.07 billion; its shares were traded at around $16.98 with a P/E ratio of 1.8 and P/S ratio of 1. The dividend yield of Sk Telecom Co. Ltd. stocks is 3.5%. Sk Telecom Co. Ltd. had an annual average earning growth of 29.2% over the past 10 years.
No. 6: Honda Motor Co. Ltd. (HMC, Financial), Weightings: 4.63% - 2,768,855 Shares
Honda manufactures a wide range of products, including motorcycles, ATVs, generators, marine engines, lawn and garden equipment and automobiles. Historically, Honda has been a leader in fuel-efficiency and low-emission technology. Honda Motor Co. Ltd. has a market cap of $58.03 billion; its shares were traded at around $31.98 with and P/S ratio of 0.6. The dividend yield of Honda Motor Co. Ltd. stocks is 1.1%.
Conclusion
Tweedy Browne managers go around the world to find values. When they found, they tend to take a large stake in them.
GuruFocus provides real time information and insights of Investment Gurus such as Warren Buffett and Tweedy Browne managers for Premium Members. If you are not a premium member, click here to sign up or upgrade. 7-Day Free Trial is available.
Long term, the comparison is even more remarkable, the fund returned 4.70, -2.87, 4.79, 5.48, 9.74% during the past 1, 3, 5, 10, and since inception (6/15/93) respectively, whereas the benchmark returned 0.93, -5.95, 5.01, 1.12, 5.19% during the same periods respectively. The actively managed fund wins the 1, 3, 10, and since inception race.
Commenting on the strong performance of the past week, the money managers provided the following perspective in the quarterly letter:
In previous letters and updates during the downturn, we commented that the stock prices of the businesses we owned suffered far more than the businesses themselves. It has been just the reverse over the last two quarters with the stock prices of the businesses we own performing much better than the underlying businesses. 2009 AverageIn another word, what goes around turns around.
Looking forward, the managers admitted that bargain are hard to get by but also contested that their top holdings are not that expensive. From the same quarterly letter:
While the markets’ advance has been nothing short of breathtaking over the last two quarters, and bargains are harder to come by, the top 25 holdings in all three of our Funds continue to trade on average at forward price/earnings multiples of between approximately 12 and 13 times earnings and have dividend yields of between 3% and 4.5%.
Here are the fund management firm’s top holdings:
No. 1: PHILIP MORRIS INTERNATIONAL INC (PM, Financial), Weightings: 9.29% - 3,524,933 Shares
Philip Morris International is the leading international tobacco company, with products sold in over 160 countries. They own 7 of the top 15 brands in the world and have a strong mix of international and local products that seek to appeal to a wide array of adult smokers. Philip Morris International Inc has a market cap of $96.65 billion; its shares were traded at around $49.96 with a P/E ratio of 15.6 and P/S ratio of 1.5. The dividend yield of Philip Morris International Inc stocks is 4.6%.
No. 2: CocaCola FEMSA S.A.B. de C.V. (KOF, Financial), Weightings: 7.94% - 3,053,061 Shares
Coca-Cola Femsa S.A., through its subsidiaries, produces, markets and distributes soft drinks throughout the metropolitan area of Mexico City, in Southeastern Mexico and in metropolitan Buenos Aires, Argentina. The Company produces ``Coca-Cola,`` ``Sprite,`` ``Fresca,`` ``Quatro,`` ``Powerade,`` ``Extra Poma, `` ``Etiqueta Azul`` and ``Kin.`` Cocacola Femsa S.a.b. De C.v. has a market cap of $9.8 billion; its shares were traded at around $53.05 with a P/E ratio of 13 and P/S ratio of 1.3. The dividend yield of Cocacola Femsa S.a.b. De C.v. stocks is 1%. Cocacola Femsa S.a.b. De C.v. had an annual average earning growth of 17.6% over the past 10 years. GuruFocus rated Cocacola Femsa S.a.b. De C.v. the business predictability rank of 3.5-star.
No. 3: Emerson Electric Co. (EMR, Financial), Weightings: 5.88% - 2,711,730 Shares
Emerson is engaged principally in the worldwide design, manufactureand sale of a broad range of electrical, electromechanical and electronicproducts and systems. The divisions of the company are organized into the following business segments based on the nature of the products and services provided: Process Control; Industrial Automation; Electronics and Telecommunications; Heating, Ventilating and Air Conditioning; and Appliance and Tools. Emerson Electric Co. has a market cap of $31.06 billion; its shares were traded at around $41.33 with a P/E ratio of 17.2 and P/S ratio of 1.5. The dividend yield of Emerson Electric Co. stocks is 3.2%. Emerson Electric Co. had an annual average earning growth of 5% over the past 10 years.
No. 4: Burlington Northern Santa Fe Corp. (BNI, Financial), Weightings: 5.64% - 1,305,389 Shares
Burlington North/Santa Fe, through its subsidiary The Burlington Northern and Santa Fe Railway Company, operates one of the largest railroad networks in North America. This vast network covers the western two-thirds of the United States, stretching from major Pacific Northwest and Southern California ports to the Midwest, Southeast and Southwest, and from the Gulf of Mexico to Canada. Burlington Northern Santa Fe Corp. has a market cap of $33.32 billion; its shares were traded at around $97.99 with a P/E ratio of 18.9 and P/S ratio of 1.8. The dividend yield of Burlington Northern Santa Fe Corp. stocks is 1.6%. Burlington Northern Santa Fe Corp. had an annual average earning growth of 8.1% over the past 10 years. GuruFocus rated Burlington Northern Santa Fe Corp. the business predictability rank of 2.5-star.
No. 5: SK Telecom Co. Ltd. (SKM, Financial), Weightings: 5.52% - 5,853,247 Shares
SK Telecom Co. is the world's first commercial CDMA digital cellular service. As of September 30, 1997, they have provided the highest quality service for more than 4 million cellular customers which includes 2.3 million digital cellular customers, and 7.1 million paging customers. Sk Telecom Co. Ltd. has a market cap of $11.07 billion; its shares were traded at around $16.98 with a P/E ratio of 1.8 and P/S ratio of 1. The dividend yield of Sk Telecom Co. Ltd. stocks is 3.5%. Sk Telecom Co. Ltd. had an annual average earning growth of 29.2% over the past 10 years.
No. 6: Honda Motor Co. Ltd. (HMC, Financial), Weightings: 4.63% - 2,768,855 Shares
Honda manufactures a wide range of products, including motorcycles, ATVs, generators, marine engines, lawn and garden equipment and automobiles. Historically, Honda has been a leader in fuel-efficiency and low-emission technology. Honda Motor Co. Ltd. has a market cap of $58.03 billion; its shares were traded at around $31.98 with and P/S ratio of 0.6. The dividend yield of Honda Motor Co. Ltd. stocks is 1.1%.
Conclusion
Tweedy Browne managers go around the world to find values. When they found, they tend to take a large stake in them.
GuruFocus provides real time information and insights of Investment Gurus such as Warren Buffett and Tweedy Browne managers for Premium Members. If you are not a premium member, click here to sign up or upgrade. 7-Day Free Trial is available.
