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James Li
James Li
Articles (1393)  | Author's Website |

David Nadel's Top 4 Buys in 3rd Quarter

Royce International Premier Fund releases portfolio. Royce Funds' chairman will present keynote at next year's value conference

David Nadel (Trades, Portfolio), manager of the Royce International Premier Fund, disclosed this week six new positions for the third quarter. The top four buys in terms of portfolio impact are Daifuku Co. Ltd. (TSE:6383), Cosel Co. Ltd. (TSE:6905), Inficon Holding AG (XSWX:IFCN) and Benefit One Inc. (TSE:2412).

Nadel, who joined Royce Funds in 2006, previously worked as senior portfolio manager at Neuberger Berman Inc. and as senior analyst at Pequot Capital Management Inc. The manager primarily invests in “premier” non-U.S. companies with market caps less than $3 billion and seeks to identify companies with notable strengths in competitive positioning, operational efficiency, financial track record and corporate governance.

Daifuku

Nadel invested in 80,000 shares of Daifuku for an average price of 5,168.62 yen ($45.63) per share. The manager dedicated 1.58% of his equity portfolio to the position.

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The Japanese industrial products company provides solutions for logistics systems and material handling equipment. GuruFocus ranks the company’s financial strength 8 out of 10 on several positive investing signs, which include a strong Altman Z-score of 4.43 and interest coverage of 119, significantly above Benjamin Graham’s required threshold of 5.

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Daifuku’s profitability ranks 8 out of 10 on expanding profit margins and returns on capital that outperform over 90% of global competitors.

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Cosel

Nadel invested in 339,400 shares of Cosel for an average price of 1,303.62 yen per share. The manager dedicated 1.5% of his equity portfolio to the position.

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Japan-based Cosel manufactures AC-DC power supplies, DC-DC converters and noise filters. GuruFocus ranks the company’s financial strength a perfect 10 on several positive investing signs, which include zero long-term debt, a strong Altman Z-Score of 6.37 and a return on invested capital of 11.71%.

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Inficon

Nadel invested in 7,000 shares of Inficon for an average price of 484.58 Swiss francs ($482.60) per share. The manager dedicated 1.39% of his equity portfolio to the position.

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The Swiss scientific equipment developer offers products, including vacuum gauge controllers and gas leak detectors, which can help reduce energy consumption in various industrial appliances. GuruFocus ranks the company’s financial strength 9 out of 10 on several factors, which include a robust Altman Z-score of 15.40 and a Piotroski F-Score driven by strong indicators like increasing return on assets, gross margins and asset turnover year over year.

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The strong profit margins and returns, which are outperforming over 90% of global competitors, contribute to a GuruFocus profitability rank of 8.

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Benefit One

Nadel invested in 90,000 shares of Benefit One for an average price of 3,216.42 yen per share. The manager dedicated 1.14% of his equity portfolio to the position.

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The Japanese employment services company markets products through its magazines and provides lodging facilities, schools and sports clubs to people under various schemes. GuruFocus ranks the company’s profitability 7 out of 10 on several positive investing signs, which include expanding profit margins and consistent revenue growth. Despite a weak Piotroski F-Score of 3, Benefit One’s business predictability ranks four stars out of five on strong and consistent earnings growth over the past 10 years.

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Other funds that have positions in Benefit One include the T Rowe Price Japan Fund and the Hennessy Japan Small Cap Fund (Trades, Portfolio).

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See also

Nadel’s remaining two buys are Lectra (XPAR:LSS) and STRATEC Biomedical AG (XTER:SBS). The manager invested 77,518 shares of the former for an average price of 21.42 euros ($24.40) per share and 5,687 shares of the latter for an average price of 68.87 euros per share.

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Chairman of Royce Funds will be the keynote speaker at next year’s value conference

We are pleased to have Chuck Royce (Trades, Portfolio), chairman of Royce Funds, as our keynote speaker at our value conference on May 3, 2019, at the DoubleTree Hotel Omaha Downtown. Royce Funds manages a family of mutual funds that primarily invest in small-cap stocks and has been considered one of the most experienced smaller-company stock pickers. The Royce Premier Fund has outperformed the Russell 2000 for the quarter, three-year, 15-year and 20-year periods and since its Dec. 31, 1991 inception as of Sept. 30, 2018.

Other top gurus that are speaking at our value conference include Mario Gabelli (Trades, Portfolio) and “Spanish Warren Buffett (Trades, Portfolio)”  Francisco Garcà­a Paramés (Trades, Portfolio). You can still register for our value conference at a good price: register by Dec. 15 and save $200 off the regular price.

Disclosure: No positions.

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About the author:

James Li
I am an editorial 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!

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