Earlier this week, the Invesco European Growth Fund (Trades, Portfolio) disclosed the portfolio updates for its third quarter of fiscal 2021, which ended on July 31.
Invesco is a global financial services company with headquarters in Atlanta, Georgia and offices in 25 countries around the world. The Invesco European Growth Fund (Trades, Portfolio) seeks long-term exposure to high-quality growth opportunities in both developed and emerging European markets.
Based on its investing criteria, the Invesco European Growth Fund (Trades, Portfolio) made three new buys during the quarter: Kering SA (XPAR:KER, Financial), Arkema SA (XPAR:AKE, Financial) and FDM Group (Holdings) PLC (LSE:FDM, Financial).
Kering SA
The Fund bought 14,326 shares of Kering SA (XPAR:KER, Financial), giving the position a 1.12% weight in the equity portfolio. During the quarter, shares traded for an average price of 731.11 Euros ($847.72).
Kering is a French luxury goods company that focuses on providing a modern and sustainable luxury aesthetic. It owns prominent global brands such as Gucci, Yves Saint Laurent and Bottega Veneta, and its products include couture, jewelry, leather goods, eyewear and watches.
On Oct. 1, shares of Kering traded around €616 for a market cap of €76.63 billion. According to the GuruFocus Value chart, the stock is “fairly valued.”
The company has a financial strength rating of 6 out of 10 and a profitability rating of 7 out of 10. The Piotroski F-Score of 6 out of 9 and Altman Z-Score of 3.81 indicate a healthy financial situation. The return on invested capital (ROIC) has surpassed the weighted average cost of capital (WACC) in recent years, meaning the company is creating value for shareholders.
Arkema SA
The Fund also took a 66,428-share stake in Arkema SA (XPAR:AKE, Financial), giving the position a 0.73% weight in the equity portfolio. Shares traded for an average price of €106.62 during the quarter.
Arkema is a French specialty materials and chemicals company that aims to offer sustainable and innovative materials solutions. Its products include packaging, adhesives, refrigerants, renewable energy storage, construction materials and paints.
On Oct. 1, shares of Arkema traded around €114.50 for a market cap of €8.52 billion. According to the GuruFocus Value chart, the stock is “modestly overvalued.”
The company has a financial strength rating of 5 out of 10 and a profitability rating of 6 out of 10. The cash-debt ratio of 0.87 is better than the industry median of 0.77, and the Piotroski F-Score of 4 out of 9 indicates the company is financially stable. The return on equity of 5.81% and return on assets of 3.06% are both below their respective industry medians.
FDM Group (Holdings) PLC
The Fund picked up 411,622 shares of FDM Group (Holdings) PLC (LSE:FDM, Financial), giving the position a 0.59% weight in the equity portfolio. During the quarter, shares traded for an average price of 10.25 British pounds ($13.90).
Headquartered in the UK, FDM Group is a professional services company that operates a “recruit, train and deploy” business model. It recruits university graduates, military veterans and returners to work, then trains them for the IT and business jobs that are in-demand among their clients.
On Oct. 1, shares of FDM Group traded around £12.64 for a market cap of £1.38 billion. According to the GuruFocus Value chart, the stock is “modestly overvalued.”
The company has a financial strength rating of 7 out of 10 and a profitability rating of 8 out of 10. The cash-debt ratio of 2.68 and Altman Z-Score of 21.25 show a fortress-like balance sheet. The company has a three-year revenue per share growth rate of 4.5% and a three-year Ebitda per share growth rate of 2.1%.
Portfolio overview
As of the quarter’s end, the equity portfolio consisted of positions in 59 stocks valued at $1.15 billion. In total, it established three new positions during the quarter, sold out of two stocks and added to or reduced several other holdings for a turnover of 4%.
The fund’s top equity positions were Sberbank of Russia PJSC (MIC:SBERP, Financial) with 6.01% of the equity portfolio, DCC PLC (LSE:DCC, Financial) with 4.69% and Ultra Electronics Holdings PLC (LSE:ULE, Financial) with 4.48%. In terms of sector weighting, the fund was most heavily invested in industrials and financial services, followed by communication services and consumer cyclical.
