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James Li
James Li
Articles (760)  | Author's Website |

AzValor Iberia’s 3 New Buys for the 4th Quarter

New buys include two Madrid-based companies and one Portuguese company

Alvaro Guzman de Lazaro and Fernando Bernad, managers of azValor Iberia FI (Trades, Portfolio), disclosed last week they introduced three new holdings during fourth-quarter 2018.

Managing a portfolio of 25 stocks, de Lazaro and Bernad primarily invest in Spanish and Portuguese companies with no more than 90% exposure to Spanish companies. The former managers at Bestinver seek investments in undervalued companies that meet several of Berkshire Hathaway Inc. (NYSE:BRK.A)(NYSE:BRK.B) co-managers Warren Buffett (Trades, Portfolio) and Charlie Munger (Trades, Portfolio)’s four-criterion investing approach: easy-to-understand business, sustainable competitive advantages, high return on capital and fair market price.


According to GuruFocus data, the fund’s top three sectors in terms of portfolio weight are industrials, materials and consumer discretionary. The fund’s three new holdings for the quarter are Repsol SA (XMAD:REP), Prosegur Compania De Seguridad SA (XMAD:PSG) and Cofina SPGS SA (XLIS:CFN).


De Lazaro and Bernad invested in 306,321 shares of Repsol for an average price of 15.41 euros ($17.63) per share. The fund managers increased their equity portfolio 3.91% with this transaction.


The Spanish energy company engages in the exploration, refinement and transportation of crude oil and natural gas. GuruFocus ranks the company’s financial strength 7 out of 10 on several positive indicators, including good interest coverage of 9.08, a strong Piotroski F-score of 7 and a debt-to-EBITDA ratio near a 10-year low of 0.92, safely below Joel Tillinghast’s threshold of 4.


Despite strong financial strength, Repsol’s profitability ranks a modest 5 out of 10 primarily due to a three-year revenue decline rate of 4.70% and profit margins that are close to the industry median. Repsol’s operating margin underperforms 52% of global competitors while its net margin outperforms just 53% of global competitors.


Bestinfond (Trades, Portfolio) increased its Repsol holding to 389,915 shares during the quarter.


Prosegur Compania de Securidad

The fund managers invested in 280,543 shares of Prosegur Compania de Securidad for an average price of 4.57 euros per share, giving the position 1.12% equity portfolio space.


“Compania de Securidad” is Spanish for “Security Company.” Prosegur provides a wide variety of security services, including cash-in-transit services and alarm services.


GuruFocus ranks Prosegur’s profitability 6 out of 10: even though the company’s revenues have declined over the trailing 12 months, its operating margin and return on equity are still outperforming over 64% of global competitors.



De Lazaro and Bernad invested in 187,273 shares of Cofina for an average price of 0.66 euros per share. The position occupies 0.09% of the equity portfolio.


Portugal-based Cofina publishes various newspapers, including Correio da Manhã and Jornal De Negocios. GuruFocus ranks the company’s profitability 5 out of 10: although its Joel Greenblatt (Trades, Portfolio) return on capital ranks higher than 88% of global competitors, Cofina’s operating margin of 19.24% underperforms 54% of global publishing companies. Additionally, Cofina’s three-year revenue decline rate of 5.60% ranks lower than 56% of global competitors.


Disclosure: No positions.

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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!

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