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Bestinfond's Top 5 New Buys in the 4th Quarter

Bestinfond (Trades, Portfolio), the Spanish fund formerly run by Francisco Garcia Parames (Trades, Portfolio), disclosed this week that its top five new buys during fourth-quarter 2019 were in Tencent Holdings Ltd. (HKSE:00700)(TCEHY), GrubHub Inc. (NYSE:GRUB), ArcelorMittal SA (LUX:MTL), South32 Ltd. (LSE:S32) and Aperam SA (LUX:APAML).

Currently managed by Beltran de la Lastra, the fund seeks long-term capital appreciation through an investing approach that combines the Austrian theory of economic cycles with key value investing principles from Ben Graham, Peter Lynch and Berkshire Hathaway Inc. (BRK.A)(BRK.B) co-managers Warren Buffett (Trades, Portfolio) and Charlie Munger (Trades, Portfolio).


As of quarter-end, the fund's $1.7-billion equity portfolio contains 86 stocks, including eight new positions. The top three sectors in terms of weight are communication services, industrials and financial services, with weights of 22.35%, 21.06% and 19.60%, respectively.



The fund purchased 792,230 shares of Tencent, giving the position 2.05% weight in the equity portfolio. Shares averaged 337.67 Hong Kong dollars (approximately $43.50) during the quarter.


The Shenzhen, China-based company operates a wide range of services, including social media platforms like WeChat and QQ. GuruFocus ranks Tencent's profitability 10 out of 10 on several positive investing signs, which include a five-star business predictability rank and operating margins that are outperforming 83.80% of global competitors despite contracting approximately 3.1% per year on average over the past five years.


The Matthews China Fund (Trades, Portfolio) and Matthews Pacific Tiger Fund (Trades, Portfolio) also purchased shares in Tencent during the quarter.



The fund purchased 595,059 shares of GrubHub, giving the position 1.55% weight in the equity portfolio. Shares averaged $45.62 during the quarter.


The Chicago, Illinois-based company provides an online takeout food platform for consumers, diners and restaurants. GuruFocus ranks the company's financial strength 6 out of 10: GrubHub has a strong Altman Z-score of 4.4 and a solid Piotroski F-score of 5, even though debt ratios are underperforming 71.81% of global competitors.


Other gurus with holdings in GrubHub include Andreas Halvorsen (Trades, Portfolio) and Pioneer Investments (Trades, Portfolio).



The fund purchased 1,026,790 shares of ArcelorMittal, giving the position 0.95% weight in the equity portfolio. Shares averaged 14.70 euros (approximately $16.13) during the quarter.


The Luxembourg-based steel company produces steel products around the globe, with approximately 40% of sales coming from emerging markets. GuruFocus ranks the company's financial strength 6 out of 10: Although ArcelorMittal's interest coverage and debt-to-Ebitda ratios outperform over 89% of global competitors, the company has a weak Altman Z-score of 1.18 and a cash-to-debt ratio that underperforms 50.09% of global steelmakers.



The fund purchased 9,319,373 UK shares of South32, giving the position 0.91% weight in the equity portfolio. Shares averaged 1.40 British Pounds (approximately $1.81) during the quarter.


The Australian materials company is comprised of BHP Billiton's (BBL) former aluminum and manganese businesses, South African energy coal business and New South Wales metallurgical coal business. GuruFocus ranks the company's financial strength and profitability 7 out of 10 on several positive investing signs, which include a debt-to-Ebitda ratio, operating margin and a return on equity outperforming 78.84%, 76.10% and 83.51% of global competitors, respectively.



The fund purchased 478,861 shares of Aperam, giving the position 0.81% weight in the equity portfolio. Shares averaged 25.81 euros (approximately $28.35) during the quarter.


The Luxembourg-based company operates three business segments: stainless and electrical steel, services and solutions and alloys and specialties. GuruFocus ranks the company's financial strength 6 out of 10. While debt ratios are outperforming over 71% of global competitors, Aperam's Altman Z-score of 2.77 falls below the safe threshold of 2.99.


Disclosure: No positions.

Read more here:

  • Francisco Garcia Parames' New Buys for the 4th Quarter
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This article first appeared on GuruFocus.