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AzValor Iberia's Top 4 Position Boosts in 3rd Quarter

- By James Li

Alvaro Guzman de Lazaro and Fernando Bernad, the fund managers of azValor Iberia FI (Trades, Portfolio), disclosed this week the top four position boosts were Jeronimo Martins SGPS SA (JMT.LS), Mota-Engil (EGL.LS), Tecnicas Reunidas SA (TRE.MC) and Melia Hotels International SA (MEL.MC).

Managing a portfolio of 23 stocks, de Lazaro and Bernad invest over three-quarters of the fund's assets in Spanish and Portuguese companies listed on secondary markets, with Spanish shares capped at 90% of the fund. The fund managers seek undervalued companies with an easy-to-understand business, sustainable competitive advantages over time, high returns on capital and led by quality management teams. The fund's largest three sectors in terms of portfolio weight are industrials, basic materials and consumer cyclical.

Jeronimo Martins

The fund managers added 119,694 shares of Jeronimo Martins for an average price of 12.84 euros ($14.48) per share, expanding the equity portfolio 1.22%.


Jeronimo Martins engages in the production, distribution and sale of food and other fast-moving consumer goods products. GuruFocus ranks the Portugal-based company's financial strength 7 out of 10: despite a modest Piotroski F-score of 4, it has solid interest coverage of 33.30 and debt ratios that rank higher than two-thirds of global competitors.


Bestinfond (Trades, Portfolio), formerly run by Francisco Garcia Parames (Trades, Portfolio), owns 662,411 shares of Jeronimo Martins as of quarter-end.



The fund invested in 582,718 shares of Mota-Engil for an average price of 2.68 euros per share, increasing the equity portfolio 0.98%.


The Portuguese engineering and construction company engages in public and private construction work across several geographic areas, which include Europe Engineering and Construction, Europe Environment and Services, Africa and Latin America. The company's financial strength ranks 4 out of 10: although the company has a satisfactory Piotroski F-score of 5, its debt-to-EBITDA ratio of 8.06 exceeds Joel Tillinghast's safe threshold of 4 and ranks lower than 98% of global competitors.

Tecnicas Renuidas

The fund invested in 40,018 shares of Tecnicas Renuidas for an average price of 27.78 euros per share, increasing the position 0.85%.


The Spanish general contracting company engages in engineering, design and construction of industrial facilities for international customers, including principal national oil companies and multinational companies. GuruFocus ranks the company's profitability 6 out of 10: even though the company's margins have declined over the past five years, its three-year revenue growth rate of 17.20% and Joel Greenblatt (Trades, Portfolio) return on capital of 21.53% outperform over 80% of global competitors.


Melia Hotels

The fund invested in 78,020 shares of Melia Hotels for an average price of 10.84 euros per share, increasing the equity portfolio 0.60%.


The Spanish lodging company operates midscale, upscale and premium hotels across several brands, including Sol Hotels & Resorts, Melia Hotels & Resorts and Gran Melia. GuruFocus ranks the company's financial strength 6 out of 10: even though it has weak Piotroski and Altman scores, the company has robust interest coverage of 144.18 and a 52.05% return on invested capital.


Disclosure: No positions.

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This article first appeared on GuruFocus.