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Sydnee Gatewood
Sydnee Gatewood
Articles (964) 

The IVA International Fund Buys 4 Stocks in 1st Quarter

Fund invests in companies in Japan, France, Britain and Mexico

The IVA International Fund (Trades, Portfolio), part of New York-based International Value Advisers, disclosed four new holding in its first-quarter portfolio, which was released earlier this week.

Managed by Charles de Vaulx (Trades, Portfolio) and Charles de Lardemelle, the value-oriented fund typically invests in financially strong companies from around the world that are temporarily trading below their intrinsic value in order to generate long-term growth of capital.

Based on these criteria, the fund established positions in Sony Corp. (TSE:6758), Ipsos SA (XPAR:IPS), Inchcape PLC (LSE:INCH) and Promotora y Operadora de Infraestructura SAB de CV (MEX:PINFRAL) during the quarter.

Sony

The fund invested in 444,300 shares of Sony, dedicating 0.77% of the equity portfolio to the position. The stock traded for an average price of 5,170.29 yen ($47.71) per share during the quarter.

The Japanese conglomerate, which operates in the consumer and professional electronics, gaming, entertainment and financial services businesses, has a market cap of 6.67 trillion yen; its shares closed at 5,334 yen on Thursday with a price-earnings ratio of 7.54, a price-book ratio of 1.83 and a price-sales ratio of 0.79.

The Peter Lynch chart shows the stock is trading below its fair value, suggesting it is undervalued.

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Boosted by comfortable interest coverage, GuruFocus rated Sony’s financial strength 6 out of 10. The Altman Z-Score of 0.92, however, warns the company could be at risk of going bankrupt since it has recorded a decline in revenue per share over the last five years.

The company’s profitability and growth scored a 5 out of 10 rating. In addition to operating margin expansion, Sony is supported by strong returns that outperform over half of its competitors and a high Piotroski F-Score of 7, which indicates business conditions are healthy. It also has a business predictability rank of one out of five stars. According to GuruFocus, companies with this rank typically see their stocks gain an average of 1.1% per year.

Of the gurus invested in Sony, the Matthews Japan Fund (Trades, Portfolio) has the largest stake with 0.11% of outstanding shares. De Vaulx and the Signature Select Canadian Fund (Trades, Portfolio) are also shareholders.

Ipsos

IVA picked up 474,264 shares of Ipsos, allocating 0.49% of the equity portfolio to the holding. During the quarter, the stock traded for an average price of 21.9 euros ($24.59) per share.

The French global market research and consulting company has a market cap of 1.03 billion euros; its shares closed at 23.75 euros on Thursday with a price-earnings ratio of 9.88, a price-book ratio of 1.07 and a price-sales ratio of 0.61.

According to the Peter Lynch chart, the stock is undervalued.

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Ipsos’ financial strength was rated 6 out of 10 by GuruFocus. Although the company has issued approximately 68.4 million euros in new long-term debt over the last three years, it is at a manageable level due to sufficient interest coverage. The Altman Z-Score of 1.73, however, warns the company could be in danger of bankruptcy. It has also recorded a decline in revenue per share over the last 12 months.

The company’s profitability and growth fared a bit better, scoring a 7 out of 10 rating on operating margin expansion, good returns that outperform over 60% of industry peers and a moderate Piotroski F-Score of 6, which suggests business conditions are stable. Ipsos also has a one-star business predictability rank.

The fund is now the company’s largest guru shareholder with 1.09% of outstanding shares. Bernard Horn (Trades, Portfolio) and de Vaulx also have positions in the stock.

Inchcape

The International Fund purchased a 303,358-share holding of Inchcape, giving it 0.09% space in the equity portfolio. Shares traded for an average price of 5.81 British pounds ($7.32) during the quarter.

The London-based distributor and retailer of premium and luxury cars has a market cap of 2.53 billion pounds; its shares closed at 6.11 pounds on Thursday with a price-earnings ratio of 50.92, a price-book ratio of 1.83 and a price-sales ratio of 0.27.

Based on the Peter Lynch chart, the stock appears to be overvalued.

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GuruFocus rated Inchcape’s financial strength 6 out of 10. Despite issuing approximately 121.1 million pounds in new long-term debt over the last three years, it is at a manageable level since the company has adequate interest coverage. In addition, the Altman Z-Score of 2.92 indicates it is under some minor fiscal pressure.

The company’s profitability and growth scored a 7 out of 10 rating. While margins underperform competitors, the returns are outperforming over 60% of industry peers. Inchcape is also supported by a moderate Piotroski F-Score of 6 and a one-star business predictability rank, which is on watch as a result of a slowdown in revenue per share growth over the last year.

The Tweedy Browne (Trades, Portfolio) Global Value Fund is Inchcape’s largest guru shareholder with a 1.27% stake. De Vaulx and Horn also own the stock.

Promotora y Operadora de Infraestructura

IVA bought 268,884 shares of Promotora y Operadora de Infraestructura, expanding the equity portfolio 0.07%. During the quarter, shares traded for an average price of 125.24 pesos ($6.54).

The Mexican engineering and construction company, which develops infrastructure projects such as highways, ports, railways and sewer systems, has a market cap of 78.41 billion pesos; its shares closed at 119.01 pesos on Thursday with a price-earnings ratio of 14.81 and a price-book ratio of 1.72.

The Peter Lynch chart shows the U.S.-listed shares (PUODY) are trading near fair value.

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Promotora y Operadora’s financial strength and profitability and growth were both rated 8 out of 10 by GuruFocus. In addition to adequate interest coverage, the robust Altman Z-Score of 7.31 indicates the company is in good fiscal standing.

The company is also supported by an expanding operating margin, strong returns, consistent earnings and revenue growth, a moderate Piotroski F-Score of 5 and a five-star business predictability rank. GuruFocus says companies with this rank typically see their stocks gain an average of 12.1% per year.

The fund is the only guru invested in Promotora y Operadora.

Additional trades

The International Fund also boosted its position in multiple holdings during the quarter, including Bayerische Motoren Werke AG (XTER:BMW), Rohto Pharmaceutical Co. Ltd. (TSE:4527), Yahoo Japan Corp. (TSE:4689), Grupo Comercial Chedraui SAB de CV (MEX:CHDRAUIB) and Phoenix New Media Ltd. (FENG).

The fund’s $2.42 billion equity portfolio, which is composed of 98 stocks, is largely invested in the industrials and consumer cyclical sectors. According to GuruFocus, the International Fund posted a -12.93% return in 2018, outperforming the MSCI All Country World (except U.S.) Index’s return of -14.20%.

Disclosure: No positions.

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About the author:

Sydnee Gatewood
I am the editorial director at GuruFocus. I have a BA in journalism and a MA in mass communications from Texas Tech University. I have lived in Texas most of my life, but also have roots in New Mexico and Colorado. Follow me on Twitter! @gurusydneerg

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Comments

asawhneyy
Asawhneyy - 4 months ago    Report SPAM

According to Barrons-internatioanl core fund lost 10% last year--overall poor record over the years.

Sound international sexy>-where is the beef-so don't mention

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