The Causeway International Value (Trades, Portfolio) Fund focuses on companies with market capitalizations of at least $750 million in developed countries. The firm has a fundamentally based bottom-up approach to stock picking, and its investment process has three stages: screening and initial analysis, fundamental research, and portfolio construction.
The quarterly performance for the past three years averaged 12.9% and 8.11% since its inception in 2011.
During the fourth quarter, the fund added two new stocks to the portfolio, with a quarter-over-quarter turnover of 8%.
GlaxoSmithKline (LSE:GSK, Financial)
The fund purchased 5,269,224 shares of GlaxoSmithKline, which traded for an average price of £14.13 during the quarter. The new purchase has a 1.8% portfolio weighting.
The pharmaceutical company manufactures and sells vaccines, over-the-counter medicines, and other health-related products.
The stock has declined 8% over the past year and currently trades at £15.54. When comparing the price to the Peter Lynch earnings line, the stock appears to be overvalued.
The operating margin took a hit in 2014, recording at 15.64%, down from 26.5% the year before. The graph below shows the margin trend over time.
GSK has continuously increased its dividend since 2005, and the current yield is 5.15%. The payout ratio is 141%.
The current P/E ratio is 27.4, while the P/S ratio is 3.29.
Causeway reinitiated a position in Petrofac for an average price of £9.32 per share. The fund had previously held shares in the company, and is buying back in after a decline in the price.
Petrofac is engaged in the provision of facilities solutions to the oil and gas industry. Its business segments are onshore engineering and construction, offshore projects and operations, engineering and consulting services, and integrated energy services.
The stock has declined 36% over the past year and currently trades at £8.93. GuruFocus rates the business predictability as 3 out of 5 stars. The DCF model, which depends on earnings consistency, estimates a fair value of £27.25, giving a 68% margin of safety.
Petrofac’s EBIT per share in 2013 was £1.37. The following graph shows the earnings trend over time.
The current P/E ratio is 7.6 while the P/S ratio is 0.78.
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