Invesco European Growth Fund's Top 5 Trades of the 4th Quarter
- 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.
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.
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.
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.
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).
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.
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.
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.
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.
Gurus with large holdings in Sanofi's U.S. shares include Dodge & Cox and Ken Fisher (Trades, Portfolio).
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.
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.
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.
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.
Disclosure: No positions.
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This article first appeared on GuruFocus.
