Polaris Global Value Fund, the fund led by 2023 GuruFocus Value Conference Keynote Speaker Bernard Horn (Trades, Portfolio), disclosed in a regulatory portfolio update filing that its top trades during the fourth quarter of 2022 included the closure of its positions in Cinemark Holdings Inc. (CNK, Financial) and Brother Industries Ltd. (TSE:6448, Financial) and a reduction to its holding in Marathon Petroleum Corp. (MPC, Financial). With the proceeds of the sales, the firm entered four new positions during the quarter: Northern Trust Corp. (NTRS, Financial), MKS Instruments Inc. (MKSI, Financial), Horizon Therapeutics PLC (HZNP, Financial) and Koninklijke Ahold Delhaize NV (XAMS:AD, Financial).
Horn founded Boston-based Polaris Capital Management in April 1995 and has been managing the firm’s global and international value portfolios since inception. The investor’s pure global value philosophy combines investment technology with traditional research. His 40+ year track record exceeds most current competitors in length and has produced admirable risk-adjusted returns since inception. GuruFocus is happy to have Horn as the keynote speaker at its value conference on May 4-5. Register now to secure your spot!
As of December 2022, Polaris’ $377 million equity portfolio contains 94 stocks with a quarterly turnover ratio of 10%. The top four sectors in terms of weight are financial services, consumer cyclical, health care and technology, with weights of 24.37%, 16.78%, 13.99% and 11.70%.
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.
Cinemark
Polaris sold all 363,600 of its shares of Cinemark (CNK, Financial), trimming 1.33% of its equity portfolio. Shares averaged $11.27 during the fourth quarter.
GuruFocus’ GF Value chart labeled the Plano, Texas-based movie theater company a possible value trap due to the company’s low price-to-GF-Value ratio of 0.52 as of Wednesday and poor ranks for financial strength and growth.
Cinemark’s financial strength ranks 3 out of 10 on several warning signs, which include a low Altman Z-score of 0.51 and an interest coverage ratio that underperforms over 90% of global competitors.
The company’s GF Score of 69 out of 100 is driven by its low growth rank of 1 out of 10 and financial strength rank of 3 out of 10 despite GF Value ranking 8 out of 10 and profitability and momentum ranking 7 out of 10.
Brother Industries
The fund sold all 248,400 of its shares of Brother Industries (TSE:6448, Financial), curbing 1.29% of its equity portfolio.
Shares of Brother Industries averaged 2,305.52 Japanese yen ($16.94) during the fourth quarter; the stock is modestly undervalued based on its price-to-GF-Value ratio of 0.77 as of Wednesday.
The Japanese office equipment and supplies company has a GF Score of 75 out of 100 based on a rank of 7 out of 10 for profitability and financial strength, a growth rank of 5 out of 10, and a rank of 4 out of 10 for momentum and GF Value.
Marathon Petroleum
Polaris sold 61,000 shares of Marathon Petroleum (MPC, Financial), slicing 58.66% of the position and 1.84% of its equity portfolio.
Shares of Marathon Petroleum averaged $113.97 during the fourth quarter; the stock is fairly valued based on its price-to-GF-Value ratio of 1.05 as of Wednesday.
The Findlay, Ohio-based petroleum refining company has a GF Score of 75 out of 100 based on a rank of 7 out of 10 for profitability and financial strength, a momentum rank of 6 out of 10, a GF Value rank of 5 out of 10 and a growth rank of 3 out of 10.
Northern Trust
Polaris purchased 52,500 shares of Northern Trust (NTRS, Financial), giving the position 1.23% equity portfolio weight. Shares averaged $87.59 during the fourth quarter; the stock is modestly undervalued based on its price-to-GF-Value ratio of 0.83 as of Wednesday.
The Chicago-based wealth management company has a GF Score of 85 out of 100 based on a rank of 9 out of 10 for growth and GF Value, a momentum rank of 7 out of 10, a profitability rank of 6 out of 10 and a financial strength rank of 4 out of 10.
MKS Instruments
Polaris purchased 54,600 shares of MKS Instruments (MKSI, Financial), giving the position 1.23% equity portfolio weight. Shares averaged $80.14 during the fourth quarter.
GuruFocus’ GF Value Line labeled the Andover, Massachusetts-based industrial equipment company a possible value trap based on the company’s low price-to-GF-Value ratio of 0.55 and poor financial strength rank of 4 out of 10.
Despite having low financial strength, MKS Instruments' high GF Score of 93 out of 100 is driven by a growth rank of 10 out of 10, a profitability rank of 9 out of 10, a GF Value rank of 8 out of 10 and a momentum rank of 7 out of 10.
Horizon Therapeutics
The fund purchased 39,800 shares of Horizon Therapeutics (HZNP, Financial), giving the position 1.20% equity portfolio weight. Shares averaged $83.06 during the fourth quarter; the stock is modestly undervalued based on its price-to-GF-Value ratio of 0.87 as of Wednesday.
The Irish drug manufacturing company has a GF Score of 79 out of 100 based on a profitability rank of 6 out of 10, a momentum rank of 3 out of 10, and a rank of 7 out of 10 for growth, GF Value and financial strength.
Koninklijke Ahold Delhaize NV
The fund invested in 143,600 shares of Koninklijke Ahold Delhaize NV (XAMS:AD, Financial), giving the position 1.09% equity portfolio weight. Shares averaged 27.67 Euros ($29.53) during the fourth quarter; the stock is fairly valued based on its price-to-GF-Value ratio of 0.96 as of Wednesday.
The Dutch grocery retail company has a GF Score of 91 out of 100 based on a growth rank of 10 out of 10, a profitability rank of 9 out of 10, a financial strength rank of 6 out of 10, and a rank of 5 out of 10 for momentum and GF Value.
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