Bestinfond (Trades, Portfolio), formerly led by Francisco Garcia Parames (Trades, Portfolio), disclosed this week its top five buys for the second quarter included a new position in Booking Holdings Inc. (BKNG, Financial) and increased bets in the following companies: Delivery Hero SE (XTER:DHER, Financial), Intesa Sanpaolo (MIL:ISP, Financial), BNP Paribas (XPAR:BNP, Financial) and Societe Generale SA (XPAR:GLE).
Currently managed by Beltran de la Lastra, Bestinfond (Trades, Portfolio) seeks long-term capital appreciation through three investing pillars as detailed on its website: fundamental analysis, appropriate risk management and long-term vision. The fund applies key principles of value management as discussed by legends like Benjamin Graham, Peter Lynch and Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial) CEO Warren Buffett (Trades, Portfolio) within the framework of the Austrian theory of economic cycles.
Fund leader discusses volatile market
De la Lastra said in his second-quarter letter that although the fund returned 9% for the quarter, several market factors are suggesting possible deceleration in global economy growth. The fund leader detailed an example regarding the German 10-year bond yield, which tumbled to an all-time low of -0.6% on Wednesday.
Figure 1 details the day-to-day changes of the Dow Jones Industrial Average since July 29, when the Dow closed at 27,221.35, close to the all-time high.
Figure 1
As Figure 1 illustrates, the Dow vacillated significantly during the past two weeks as investors grappled with several geopolitical factors, including the Federal Reserve, the ongoing U.S.-China trade war, European government bond yields and the U.S. Treasury yield curve.
Portfolio summary and trades overview
As of quarter-end, the fund’s $1.57 billion equity portfolio contains 95 stocks, of which three are new holdings. The fund’s top sectors in terms of portfolio weight are consumer cyclical, industrials and financial services, with weights of 25.20%, 24.10% and 18.51%.
Booking Holdings
The fund purchased 8,928 shares of Booking Holdings, giving the position 0.95% weight in the equity portfolio. Shares averaged $1,795.29 during the quarter.
The Norwalk, Connecticut-based company offers booking services for various forms of travel and leisure, including airfare, restaurants, hotels and cruises. GuruFocus ranks Booking’s profitability 9 out of 10 on several positive investing signs, which include a strong Piotroski F-score of 7, business predictability of 3.5 stars and operating margins that are outperforming over 92% of global competitors.
Other gurus riding Booking’s strong profitability include Diamond Hill Capital (Trades, Portfolio) and Wallace Weitz (Trades, Portfolio).
Delivery Hero
The fund added 481,801 shares of Delivery Hero, increasing the holding 57.90% and its equity portfolio 1.22%. Shares averaged 38.54 euros ($43.17) during the quarter.
Delivery Hero, a German online media company, operates a food ordering and delivery marketplace. GuruFocus ranks the company’s financial strength 9 out of 10 on several positive indicators, including a strong Altman Z-score of 11.24, a cash-to-debt ratio that outperforms 69.49% of global competitors and an equity-to-asset ratio that outperforms 83.57% of global competitors.
Intesa Sanpaolo
The fund added 10,034,364 shares of Intesa Sanpaolo, increasing the stake 72.16% and the equity portfolio 1.20%. Shares averaged 2.08 euros ($2.33) during the quarter.
GuruFocus ranks the Turin, Italy-based bank’s financial strength 3 out of 10 on several weak signs, which include a cash-to-debt ratio that underperforms 92.84% of global banks and an equity-to-asset ratio that underperforms 77.68% of global competitors.
BNP Paribas
The fund added 398,626 shares of BNP Paribas, increasing the position 71.15% and the equity portfolio 1.06%. Shares averaged 44.28 euros during the quarter.
Banque Nationale de Paris and Paribas merged in 2000, creating the largest publicly traded bank in France. GuruFocus ranks BNP Paribas’ financial strength 4 out of 10: Although its cash-to-debt ratio of 1.06 underperforms just 51.86% of global banks, the Paris-based bank’s equity-to-asset ratio of 0.05 underperforms 92.35% of global competitors.
Societe Generale
The fund added 679,395 shares of Societe Generale, increasing the holding 142.51% and the equity portfolio 0.96%. Shares averaged 25.08 euros during the quarter.
According to GuruFocus data, France’s third-largest bank, Societe Generale, has a cash-to-debt ratio of 1.17, outperforming 50.11% of global banks. Despite this, the bank’s financial strength ranks 4 out of 10 on the heels of equity-to-asset and debt-to-equity ratios underperforming over 87% of global competitors.
See also
GuruFocus has launched a new user-defined function for the Excel Add-in this week. Known as GURUE, the function allows users to retrieve economic indicator data directly in Excel. For example:
= GURUE (“The Dow Jones Industrial Average (DJIA)”, “2019-07-29:”) retrieves the daily close of the Dow since July 29.
Disclosure: No positions.
Read more here:
- Francisco Garcia Parames’ Top 6 Buys in the 2nd Quarter
- Diamond Hill Capital’s Top 4 Buys in 2nd Quarter
- Kahn Brothers’ Top 6 Buys in the 2nd Quarter
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