The Causeway International Value (Trades, Portfolio) Fund, part of Los Angeles-based Causeway Capital Management, released its first-quarter portfolio update, revealing that its top five trades included new positions in Allianz SE (XTER:ALV, Financial) and Diageo PLC (LSE:DGE, Financial). The fund also exited its position in Pernod Ricard SA (XPAR:RI, Financial) and reduced its holdings of Prudential PLC (LSE:PRU, Financial) and Sands China Ltd. (HKSE:01928, Financial).
Managed by Sarah Ketterer (Trades, Portfolio), the fund seeks long-term capital appreciation by investing in the stock of companies headquartered in developed countries outside of the U.S. based on three key stages: screening and initial analysis, fundamental research and portfolio construction. The fund applies a value-driven investing approach based on fundamental analysis and bottom-up stock selection.
As of March, the fund’s $6.47 billion equity portfolio contains 64 stocks, with six new positions and a quarterly turnover ratio of 10%. The top four sectors in terms of weight are industrials, financial services, health care and consumer defensive, representing 20.16%, 18.35%, 14.30% and 11.09% of the equity portfolio.
Investors should be aware that portfolio updates for mutual funds do not necessarily provide a complete picture of a guru’s holdings. The data is sourced from the quarterly updates on the website of the fund(s) in question. This usually consists of long equity positions in U.S. and foreign stocks. All numbers are as of the quarter’s end only; it is possible the guru may have already made changes to the positions after the quarter ended. However, even this limited data can provide valuable information.
Allianz
The fund invested in 350,284 shares of Allianz (XTER:ALV, Financial), giving the position 1.25% equity portfolio weight.
Shares of Allianz averaged 215.78 euros ($233.71) during the first quarter; the stock is fairly valued based on its price-to-GF Value ratio of 0.91 as of Thursday.
The German insurance giant has a GF Score of 83 out of 100 based on a momentum rank of 10 out of 10, a rank of 7 out of 10 for growth and financial strength, and a rank of 6 out of 10 for GF Value and profitability.
Although the company has a four-star business predictability rank, Allianz’s net margin outperforms just over 57% of global competitors while its return on assets underperforms more than 58% of global insurance companies.
Diageo
The fund purchased 1,522,543 shares of Diageo (LSE:DGE, Financial), giving the stake 1.05% equity portfolio weight.
Shares of Diageo averaged 35.76 pounds ($45.63) during the first quarter; the stock is modestly undervalued based on its price-to-GF Value ratio of 0.72 as of Thursday.
The U.K.-based wine and spirits company has a GF Score of 83 out of 100 based on a GF Value rank of 9 out of 10, a profitability rank of 8 out of 10, a momentum rank of 7 out of 10, a growth rank of 6 out of 10 and a financial strength rank of 4 out of 10.
Diageo’s high profitability rank is driven by several positive investing signs, which include a high Piotroski F-score of 7 out of 9, 10 years of positive net income over the past decade and an operating margin that outperforms approximately 90% of global competitors despite declining by approximately 2.6% per year on average over the past five years.
Pernod Ricard
The fund sold all 320,024 shares of Pernod Ricard (XPAR:RI, Financial), reducing its equity portfolio by 1.11%.
Shares of Pernod Ricard averaged 195.44 euros during the first quarter; the stock is modestly undervalued based on its price-to-GF Value ratio of 0.87 as of Thursday.
The French spirits company has a GF Score of 87 out of 100 based on a profitability rank of 9 out of 10, a rank of 7 out of 10 for growth and GF Value, a momentum rank of 6 out of 10 and a financial strength rank of 5 out of 10.
Pernod Ricard’s high profitability rank is driven by several positive investing signs, which include a high Piotroski F-score of 8 out of 9, 10 years of positive net income over the past decade and an operating margin that has increased by approximately 0.80% per year on average over the past five years and outperforms more than 91% of global competitors.
Prudential
The fund sold 4,061,502 shares of Prudential (LSE:PRU, Financial), trimming 25.09% of the position and 0.97% of its equity portfolio.
Shares of the U.K.-based insurance company averaged 12.33 pounds during the first quarter; the stock is modestly overvalued based on its price-to-GF Value ratio of 1.30 as of Thursday.
The company has a GF Score of 53 out of 100 based on a momentum rank of 10 out of 10, a financial strength rank of 6 out of 10, a profitability rank of 3 out of 10 and a GF Value rank of 1 out of 10. However, the stock does not have enough data to compute a growth rank and thus, the GF Score may give an incomplete picture of the stock’s potential.
Sands China
The fund sold 15,078,800 shares of Sands China (HKSE:01928, Financial), chopping 67.35% of the position and 0.88% of its equity portfolio.
Shares of Sands China averaged 27.89 Hong Kong dollars ($3.57) during the first quarter; the stock is significantly overvalued based on its price-to-GF Value ratio of 1.38 as of Thursday.
The Macao, China-based casino company has a GF Score of 55 out of 100 based on a momentum rank of 10 out of 10, a profitability rank of 6 out of 10, a financial strength rank of 2 out of 10 and a rank of 1 out of 10 for growth and GF Value.
