Bestinfond (Trades, Portfolio)" target="_blank" rel="noreferrer noopener">Bestinfond (Bestinfond (Trades, Portfolio)" target="_blank" rel="noreferrer noopener">Trades, Bestinfond (Trades, Portfolio)" target="_blank" rel="noreferrer noopener">Portfolio), which is part of Spanish investment firm Bestinver, recently disclosed its portfolio updates for the second quarter of 2021, which ended on June 30.
Managed by Beltran de la Lastra, the fund’s strategy seeks long-term capital appreciation through value opportunities in the markets, following in the footsteps of Benjamin Graham, Peter Lynch and Warren Buffett (Trades, Portfolio). It also utilizes the Austrian theory of economic cycles, which views cycles as a consequence of the artificial expansion of monetary supply and manipulation of interest rates by central banks or fractional reserve banks.
Based on its investing criteria, the fund’s top buys for the quarter were NatWest Group PLC (LSE:NWG, Financial) and Laboratorios Farmaceuticos Rovi SA (XMAD:ROVI, Financial), while its biggest sells were Befesa SA (XTER:BFSA, Financial) and Ashtead Group PLC (LSE:AHT, Financial).
NatWest Group
The fund established a new holding of 6,241,259 shares in NatWest Group (LSE:NWG, Financial), impacting the equity portfolio by 0.85%. During the quarter, shares traded for an average price of 2 British pounds ($2.79).
NatWest Group is a majority state-owned British banking and insurance holding company headquartered in Edinburgh, Scotland. Through its brands, the company offers personal and business banking, private banking, insurance and corporate finance.
On July 28, shares of NatWest traded around 2.02 pounds for a market cap of 22.96 billion pounds. According to the GuruFocus Value chart, the stock is modestly overvalued.
The company has a financial strength rating of 4 out of 10 and a profitability rating of 2 out of 10. The cash-debt ratio of 17.37 is better than 85% of industry peers, while the debt-to-equity ratio of 0.19 is better than the industry median of 0.57. The return on equity of 5.73% and return on assets of 0.36% show a return to profitability after several quarters of negative returns.
Laboratorios Farmaceuticos Rovi
The fund also invested in 226,969 new shares of Laboratorios Farmaceuticos Rovi (XMAD:ROVI, Financial) after selling out of its previous holding in the stock in the third quarter of 2014. The trade had a 0.75% impact on the equity portfolio. Shares traded for an average price of 51.92 euros ($61.75) during the quarter.
Based in Madrid, Spain, Laboratorios Farmaceuticos is a pharmaceutical company that is mainly involved in the development and commercialization of medicines and drugs. It operates in three segments: diagnostics, prescriptions and others.
On July 28, shares of Laboratorios Farmaceuticostraded around 63 euros for a market cap of 3.49 billion euros. According to the GF Value chart, the stock is significantly overvalued.
The company has a financial strength rating of 7 out of 10 and a profitability rating of 8 out of 10. The Piotroski F-Score of 6 out of 9 and Altman Z-Score of 12.37 show a strong financial situation. The return on invested capital is consistently higher than the weighted average cost of capital, indicating the company is creating value for shareholders.
Befesa
The fund sold out of its 599,000-share stake in Befesa (XTER:BFSA, Financial), which had a -2.08% impact on the equity portfolio. During the quarter, shares traded for an average price of 59.40 euros.
Luxembourg-based Befusa specializes in the collection and recycling of steel dust and aluminium residues as well as the provision of related services and logistics.
On July 28, shares of Befesa traded around 67.20 euros for a market cap of 2.27 billion euros. According to the GF Value chart, the stock is significantly overvalued.
The company has a financial strength rating of 4 out of 10 and a profitability rating of 6 out of 10. The cash-debt ratio of 0.28 is lower than 61% of industry peers, but the Piotroski F-Score of 5 out of 9 indicates the company is financially stable. The operating margin of 28.11% and net margin of 10.25% are both more than double the industry medians.
Ashtead Group
The fund reduced its position in Ashtead Group (LSE:AHT, Financial) by 323,254 shares, or 30.82%, for a remaining holding of 725,670 shares. The trade had a -0.98% impact on the equity portfolio. Shares traded for an average price of 49.03 pounds during the quarter.
Ashtead Group is a British industrial equipment rental company based in London. It has networks in the U.K., the U.S. and Canada, operating under the brand name Sunbelt Rentals.
On July 28, shares of Ashtead Group traded around 55.60 pounds for a market cap of 24.90 billion pounds. According to the GF Value chart, the stock is significantly overvalued.
The company has a financial strength rating of 4 out of 10 and a profitability rating of 9 out of 10. The cash-debt ratio of 0.01 is worse than 98% of industry peers, though the interest coverage ratio of 4.45 shows the company can keep making interest payments for now. The WACC has recently risen above ROIC, indicating struggles with profitability.
Portfolio overview
As of the quarter’s end, the fund held shares in 71 common stocks valued at a total of $1.76 billion. The turnover rate for the quarter was 10%.
The top holdings were HelloFresh SE (XTER:HFG, Financial) with 4.12% of the equity portfolio, Facebook Inc. (FB, Financial) with 3.16% and GlaxoSmithKline PLC (GSK, Financial) with 3.09%. In terms of sector weighting, the fund was most invested in consumer cyclical and industrials, followed distantly by basic materials and communication services.
