David Herro (Trades, Portfolio) of the Oakmark International Fund purchased five new stakes, two of them Japanese companies, during the second quarter according to data reported by GuruFocus Real Time Picks.
The fund declined 1% during the quarter, underperforming the MSCI World ex. U.S. Index, which returned 0.48%. In the second quarter commentary, Herro and co-portfolio manager Robert Taylor wrote that U.K. retail bank Lloyds Banking Group (LSE:LLOY, Financial) was the top contributor to the fund, while Samsung Electronics (XKRX:005930, Financial) was the top detractor.
Nomura Holdings (TSE:8604, Financial)
Herro’s largest purchase was 105,530,000 shares in Nomura Holdings, which traded for an average price of ¥788.24 during the quarter.
Nomura is a Japanese financial services company that provides financial products and investment services, as well as asset management services. The stock rose 33% over the last year and closed at ¥849.60 on Aug. 17 with a current P/E of 11.51.
The annual revenue growth rate over the past five years was 5.1%, while EBITDA grew by 21.3%. EPS in FY 2015 was ¥60.04, up from ¥55.82 the year before.
Nomura pays a dividend yield of 1.53% with a 18% payout ratio.
Glencore PLC (LSE:GLEN, Financial)
Herro also purchased 99,946,000 shares of Glencore for an average price of £2.90 per share. The stock has a 1.4% portfolio weighting.
Glencore is a commodities producer and marketer, whose business covers more than 90 commodities. The company trades and distributes physical commodities sourced from third parties, as well as those from its own production. The stock dropped 53% over the past year, closing at £1.70 on Aug. 17 with a P/E of 14.75.
After reporting loss per share of $0.45 in 2013, the company had earnings per share of $0.12 last year.
Glencore pays a dividend yield of 6.46%, with a payout ratio of 97%.
Swatch Group AG (XSWX:UHR, Financial)
Herro bought 244,300 shares of Swatch Group, a maker of watches and jewelry, for an average price of CHF 397.05 per share.
In the second quarter commentary, Herro wrote that challenging fundamentals and concerning headlines created a buying opportunity in the stock, as shares declined 30% due to weakened demand from China and competition from the Apple (AAPL) Watch.
“We believe these are short-term issues that Swatch will overcome,” the fund managers wrote. “Swiss watches are niche and, in our opinion, are unlikely to be materially impacted if smart watches gain mass market status.”
The stock price closed at CHF 361.08 on Aug. 18, and has a current P/E of 14.95. GuruFocus rates Swatch’s business predictability as 4.5 out of 5 stars, with annual revenue growth rate of 11.2% over the past five years.
Omron Corp (TSE:6645)
He also purchased 2,764,000 shares of Omron for an average of ¥5541.15 per share. The company manufactures and sells control systems and components for factory automation and industrial equipment.
The stock price increased 9% over the past year, closing at ¥4860 on Aug. 18, with a current P/E of 17.9. EPS in FY 2015 was ¥283.89, up from ¥209.82 the year before.
The company’s operating margin has also increased each year since 2012, reaching 10.22% in 2015.
Omron pays a dividend of 1.46%, which is close to the two-year high, while the payout ratio is 26%.
Bureau Veritas SA (XPAR:BVI)
Herro’s fifth purchase during the quarter was 5,021,000 shares in Bureau Veritas, which traded for an average €20.78 during the quarter.
The company provides testing, inspection and certification services to various industries, operating a network of about 1,400 offices in more than 140 countries. The stock rose 6% over the past year, closing at €21.05 on Aug. 18 with a current P/E of 31.85.
The annual revenue growth rate over the last five years was 9.6%, while EBITDA grew by 10.8%. EPS for the trailing 12 months is €0.67, which has largely remained steady since 2010.
The company pays a dividend yield of 2.28%, with a 72% payout ratio.
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