The Wasatch International Growth (Trades, Portfolio) Fund released its first-quarter portfolio update, revealing its top buys included a new position in Stabilus SE (XTER:STM, Financial) and boosts to its holdings of Pet Valu Holdings Ltd. (TSX:PET, Financial), Canada Goose Holdings Inc. (TSX:GOOS, Financial), Rakus Co. Ltd. (TSE:3923, Financial) and Endava PLC (DAVA, Financial).
The fund seeks long-term capital appreciation by investing in small-cap growth companies outside of the U.S. Wasatch applies a bottom-up, fundamental analysis approach to investing, focusing on companies that have sustainable revenue and earnings growth, proven management teams, strong balance sheets, reasonable use of debt and attractive valuations.
As of March, the fund’s $541 million equity portfolio contains 69 stocks with a quarterly turnover ratio of 4%. The top four sectors in terms of weight are technology, industrials, health care and financial services, accounting for 29.79%, 24.06%, 17.49% and 11.94% 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.
Stabilus
The fund invested in 76,185 shares of Stabilus (XTER:STM, Financial), giving the position 0.99% equity portfolio weight.
Shares of Stabilus averaged 62.93 euros ($68.69) during the first quarter; the stock is modestly undervalued based on its price-to-GF Value ratio of 0.86 as of Thursday.
The German auto parts company has a GF Score of 80 out of 100 based on a momentum rank of 9 out of 10, a growth rank of 4 out of 10 and a rank of 7 out of 10 for profitability, financial strength and GF Value.
Even though the company’s gross margin has declined by approximately 1.2% per year over the past five years, it has a high Piotroski F-score of 7 out of 9 and a return on assets that outperforms approximately 84% of global competitors.
Pet Valu Holdings
The fund added 115,690 shares of Pet Valu Holdings (TSX:PET, Financial), expanding the position by 162.86% and its equity portfolio by 0.59%. Shares averaged 39.24 Canadian dollars ($29.09) during the first quarter.
The Markham, Ontario-based company offers pet food products and services at its stores. Although the company has a financial strength rank of 4 out of 10 and a profitability rank of 7 out of 10, Pet Valu does not have enough data to compute ranks for momentum, growth and GF Value and thus, the GF Score of 30 out of 100 may give an incomplete picture of its potential.
Pet Valu’s high profitability rank is driven by several positive investing signs, which include a high Piotroski F-score of 7 out of 9 and an operating margin that outperforms approximately 90% of global competitors.
Canada Goose Holdings
The fund added 165,019 shares of Canada Goose Holdings (TSX:GOOS, Financial), increasing the position by 66.06% and its equity portfolio by 0.59%.
Shares of Canada Goose averaged CA$26.76 during the first quarter; the stock is significantly undervalued based on its price-to-GF Value ratio of 0.45 as of Thursday.
The Canadian outdoor apparel company has a GF Score of 93 out of 100 based on a momentum rank of 10 out of 10, a rank of 9 out of 10 for profitability and growth, a GF Value rank of 8 out of 10 and a financial strength rank of 5 out of 10.
The company’s high profitability rank is driven by a gross profit margin that outperforms approximately 95% of global competitors.
Rakus
The fund added 219,400 shares of Rakus (TSE:3923, Financial), boosting the position by 126.46% and its equity portfolio by 0.59%.
Shares of Rakus averaged 1,772.07 yen ($13.17) during the first quarter; the stock is significantly undervalued based on its price-to-GF Value ratio of 0.66 as of Thursday.
The Japanese information technology services company has a GF Score of 94 out of 100 based on a rank of 10 out of 10 for momentum and growth, a profitability rank of 9 out of 10, a financial strength rank of 8 out of 10 and a GF Value rank of 4 out of 10.
The stock’s high financial strength is driven by several positive investing signs, which include a high Altman Z-score of 64 and a cash-to-debt ratio that outperforms approximately 82% of global competitors.
Endava
The fund added 41,334 shares of Endava (DAVA, Financial), boosting the position by 41.37% and its equity portfolio by 0.52%.
Shares of Endava averaged $78.54 during the first quarter; the stock is significantly undervalued based on its price-to-GF Value ratio of 0.37 as of Thursday.
The U.K.-based technology solutions company has a GF Score of 87 out of 100 based on a growth rank of 10 out of 10, a rank of 8 out of 10 for financial strength and profitability and a rank of 4 out of 10 for momentum and GF Value.
The company’s high growth rank is driven by several positive investing signs, which include three-year revenue and earnings growth rates that outperform more than 85% of global competitors.
