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Invesco European Growth Fund's Top 5 Trades of the 4th Quarter

GuruFocus.com
·3 min read

- By James Li

The Invesco European Growth Fund (Trades, Portfolio) disclosed last week that its top five trades during the fiscal fourth quarter included new holdings in Heineken NV (XAMS:HEIA), TGS-NOPEC Geophysical Co. ASA (OSL:TGS) and Sanofi SA (NASDAQ:SNY)(XPAR:SAN). The fund also divested out of Allianz SE (XTER:ALV) and Essilorluxottica (XPAR:EL).


According to Invesco's website, the fund seeks long-term capital appreciation through investments in the stocks of reasonably-priced European companies that have strong fundamentals and sustainable earnings growth.

Invesco European Growth Fund's Top 5 Trades of the 4th Quarter
Invesco European Growth Fund's Top 5 Trades of the 4th Quarter

As of October 2020, the fund's $879 million equity portfolio contains 56 stocks with a turnover ratio of 5%. The top three sectors in terms of weight are industrials, financial services and health care, representing 22.41%, 19.01% and 13.81% of the equity portfolio.

Invesco European Growth Fund's Top 5 Trades of the 4th Quarter
Invesco European Growth Fund's Top 5 Trades of the 4th Quarter

Heineken

The fund purchased 106,403 shares of Heineken, giving the position 1.07% weight in the equity portfolio. Shares averaged 78 euros ($94.91) during the quarter ending October 2020; the stock is modestly overvalued based on a price-to-GF Value ratio of 1.12.

Invesco European Growth Fund's Top 5 Trades of the 4th Quarter
Invesco European Growth Fund's Top 5 Trades of the 4th Quarter

GuruFocus ranks the Dutch beer giant's profitability 8 out of 10 on the back of a high Piotroski F-score of 7 and a 4.5-star business predictability rank.

Invesco European Growth Fund's Top 5 Trades of the 4th Quarter
Invesco European Growth Fund's Top 5 Trades of the 4th Quarter

Other gurus with holdings in Heineken include Charles de Vaulx (Trades, Portfolio)'s IVA International Fund (Trades, Portfolio) and the MS Global Franchise Fund (Trades, Portfolio).

Invesco European Growth Fund's Top 5 Trades of the 4th Quarter
Invesco European Growth Fund's Top 5 Trades of the 4th Quarter

TGS-NOPEC Geophysical

The fund purchased 990,078 shares of TGS-NOPEC Geophysical, giving the holding 1.04% weight in the equity portfolio. Shares averaged 112.6 Norwegian kroner ($13.22) during the quarter; the stock is fairly valued based on a price-to-GF Value ratio of 0.94.

Invesco European Growth Fund's Top 5 Trades of the 4th Quarter
Invesco European Growth Fund's Top 5 Trades of the 4th Quarter

GuruFocus ranks the Norwegian energy company's financial strength 6 out of 10: Debt ratios are outperforming over 76% of global competitors despite a weak Piotroski F-score of 2 and Altman Z-score of 1.68.

Invesco European Growth Fund's Top 5 Trades of the 4th Quarter
Invesco European Growth Fund's Top 5 Trades of the 4th Quarter

Sanofi

The fund purchased 100,052 shares of Sanofi, giving the position 1.03% weight in the equity portfolio. Shares averaged 85.8 euros ($104.37) during the quarter; the stock is fairly valued with a price-to-GF Value ratio of 0.95.

Invesco European Growth Fund's Top 5 Trades of the 4th Quarter
Invesco European Growth Fund's Top 5 Trades of the 4th Quarter

GuruFocus ranks the French drug manufacturer's profitability 7 out of 10: Operating margins and returns are outperforming over 85% of global competitors despite three-year revenue and earnings growth rates underperforming more than half of global drug manufacturers.

Invesco European Growth Fund's Top 5 Trades of the 4th Quarter
Invesco European Growth Fund's Top 5 Trades of the 4th Quarter

Gurus with large holdings in Sanofi's U.S. shares include Dodge & Cox and Ken Fisher (Trades, Portfolio).

Invesco European Growth Fund's Top 5 Trades of the 4th Quarter
Invesco European Growth Fund's Top 5 Trades of the 4th Quarter

Alliance

The fund sold 93,356 shares of Alliance, trimming the equity portfolio 1.99%. Shares averaged 173.32 euros ($210.65) during the quarter; based on GuruFocus estimates, the fund gained approximately 28.31% on the stock since initially buying shares during the second quarter of 2013.

Invesco European Growth Fund's Top 5 Trades of the 4th Quarter
Invesco European Growth Fund's Top 5 Trades of the 4th Quarter

GuruFocus ranks the German insurance company's profitability 6 out of 10: Although the company has a 4.5-star business predictability rank, three-year revenue and earnings growth rates are underperforming more than half of global competitors.

Invesco European Growth Fund's Top 5 Trades of the 4th Quarter
Invesco European Growth Fund's Top 5 Trades of the 4th Quarter

Essilorluxottica

The fund sold 94,514 shares of Essilorluxottica, trimming the equity portfolio 1.29%. Shares averaged 112.57 euros ($136.78) during the quarter; based on GuruFocus estimates, it gained approximately 1.80% on the stock since initially buying shares during the first quarter of 2017.

Invesco European Growth Fund's Top 5 Trades of the 4th Quarter
Invesco European Growth Fund's Top 5 Trades of the 4th Quarter

GuruFocus ranks the French optical lenses manufacturer's financial strength 5 out of 10 on the back of modestly weak Piotroski F and Altman Z scores.

Invesco European Growth Fund's Top 5 Trades of the 4th Quarter
Invesco European Growth Fund's Top 5 Trades of the 4th Quarter

Disclosure: No positions.

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This article first appeared on GuruFocus.