Bernard Horn (Trades, Portfolio) of Polaris Global Value Fund currently owns 89 stocks, valued at $275 million, with a quarter over quarter turnover of 4%.
Horn founded Polaris in 1995, with a global value philosophy that combines technology with fundamental research. The firm's global philosophy is based on two beliefs: country and industry factors play an important role in determining security prices and fluctuations in the global market result in mispriced stocks.
21.5% of Horn's portfolio consists of stocks in the financial services sector. Consumer cyclicals is 13.7% and basic materials consists of 13.4% of his overall portfolio.
Here are his most heavily weighted stocks in his portfolio:
Greencore Group PLC (GNC.UK, Financial)
Horn currently owns 2,387,491 shares of GNC.UK, valued at $10.65 million. GNC.UK consists of 3.9% of his overall portfolio and 0.59% of the company's shares outstanding.
"On the other hand, in late September, Greencore Group (LSE:GNC) saw its stock price decline in response to negative news on the U.K. retail grocery market. Greencore subsequently released a statement reaffirming full year guidance projecting growth in the ready-to-eat/food-to-go market, which is the fastest growing category of U.K. grocery store sales. We believe investors unfairly penalized Greencore on broader market news that was not applicable," Horn said in the Polaris Global Value Fund Q3 Shareholder Letter.
Greencore is in the Consumer Packaged Goods industry. The company produces convenience foods, such as sandwiches, chilled prepared meals, chilled soups and sauces, cooking sauces and pickles, cakes and desserts and Yorkshire puddings.
The stock is currently trading at £3.30 a share.
The Peter Lymch earnings line is currently at £3.20, which indicates the stock may be slightly overvalued.
One concern is the P/E ratio of 28.70 is close to the five-year high of 25.40. Another concern is the company continues to issue more debt. Over the past 0.75 years, the company has issued ~£9.86 million in debt.
The current P/B ratio is 4.71 and the P/S ratio is 1.07.
Horn currently owns 20,689 shares of ACT, valued at $5.3 million. ACT consists of 1.9% of his overall portfolio and 0.01% of the company's shares outstanding.
Actavis is in the Drug Manufacturing industry and is a company that is involved with developing, manufacturing, marketing, sales and distributing generic, branded generic, brand name, biosimilar and over-the-counter pharmaceutical products.
"On July 1, Actavis (ACT) announced the completion of its acquisition of Forest Laboratories Inc. (a Fund holding), in a cash and equity transaction valued at approximately $28 billion. We maintained a position in Actavis, as its pro-forma financial statements fit the Polaris valuation profile. As one of the largest generic pharmaceutical companies, Actavis is expected to broaden its product platform with the Forest acquisition, increase operating cash flow and realize $1 billion in cost synergies," Horn said in the Polaris Global Value Fund Q3 Shareholder Letter.
The stock is currently trading at $293.47 a share.
The Lynch earnings line is at $136.10, which indicates the stock may be overvalued.
One warning sign investors should be aware of is the P/S ratio of 4.90, which is what the P/S ratio was at its ten-year high.
The current P/B ratio is 2.69.
Duni AB (DUNI.Sweden)
Horn currently owns 305,200 shares, valued at $4.54 million. The stock consists of 1.7% of his overall portfolio and 0.65% of the company's shares outstanding.
Duni AB is in the Consumer Packaged Goods industry. The company markets, designs and produces table covers, napkins, candles, as well as other table setting products.
"Swedish table napkin maker Duni (OSTO:DUNI)’s stock price was up more than 20%, which helped offset subpar performance among other consumer discretionary holdings. Duni’s operating profitability improved in the first quarter of 2014, and the company was able to gain market share in the moribund European market. Duni also announced the acquisition of Paper+Design Group, a German company with a dominant position in designer napkins sold in consumer markets throughout Europe," Horn said in the Polaris Global Value Fund Q3 Shareholder Letter.
The stock is currently trading at kr123.
Revenue per share for the trailing twelve months as of September 2014 was kr88.09. Over the past five years, the growth rate was -2.40% a year. Revenue has been declining for five years.
The current P/B ratio is 2.76 and the P/E ratio is 18.26.
Invrestors should be cautious of the P/S ratio of 1.40 because it is close to the five-year high of 1.42.
To view the portfolios of more gurus, visit the List of Gurus page. Not a premium member of GuruFocus? Try it free for 7 days.
