Finding Value In A Frenzy: First Eagle Global Fund's Top 5 Stock Picks – ValueWalk Premium
First Eagle

Finding Value In A Frenzy: First Eagle Global Fund's Top 5 Stock Picks

The managers of the First Eagle Global Fund seek out resilient businesses in beaten-down sectors. via Barron’s 

H/T Dataroma

When discussing the prospect of a down market, Matthew McLennan and Kimball Brooker are nearly giddy.

The managers of the First Eagle Global Fund (SGENX) search out companies that have a “margin of safety,” meaning the stocks trade at a discount to what McLennan and Brooker have determined to be their intrinsic value. However, with both the Standard & Poor’s 500 and the Dow Jones Industrial Average reaching record levels, the value opportunities have been hard to come by.

“We view our key asset as temperament. We’re very patient long-term investors,” says McLennan. “In ebullient markets like the one we’ve seen, we are happy to be a net seller of overpriced securities.” With the lack of value prospects as of late, the $50 billion fund currently has a 20% allocation of cash and another 9% in gold bullion and gold miners. “We’d look to put the cash to work in a more-distressed business cycle, and we view gold as a potential hedge against the frailties of the monetary architecture.”

First Eagle Global Fund: Oracle, National Oilwell Varco and Bank of New York Mellon are good buys

While the environment might not be ideal for the value investors, McLennan and Brooker still think that Oracle (ORCL), National Oilwell Varco (NOV) and Bank of New York Mellon (BK) are good buys right now. “We are tending to emphasize businesses that have resilience in terms of their market position and generation of free cash flow, or that already incorporate some element of cyclical-distress in their valuations,” says McLennan.

The fund has a successful long-term track record. Over the last 15 years the fund has topped 98% of its peers, with an average annual return of 11.57%, according to Morningstar. Over the five-year and 10-year periods the fund ranks in the top decile in performance. This year the fund is up 3.72%, well behind the 12.65% of the broader market but ahead of the 1.97% average return of its category. Barrons.com asked McLennan and Brooker to share five global stocks they like.

First Eagle Global Fund: Portfolio holdings

Oracle:

National Oilwell

Fresnillo:

Groupe Bruxelles Lambert:

 

First Eagle

TFull article via Barron’s

LEAVE A COMMENT


X
Saved Articles
X
TextTExtLInkTextTExtLInk

The Life and Career of Charlie Munger

Charlie is more than just Warren Buffett’s friend and Berkshire Hathaway’s Vice Chairman – Buffett has actually credited him with redefining how he looks at investing. Now you can learn from Charlie firsthand via this incredible ebook and over a dozen other famous investor studies by signing up below:

  • Learn from the best and forever change your investing perspective
  • One incredible tidbit of knowledge after another in the page-turning masterpiece of a book
  • Discover the secrets to Charlie’s success and how to apply it to your investing
Never Miss A Story!
Subscribe to ValueWalk Newsletter. We respect your privacy.

What’s missing today for many investors is real, straightforward advice.

Especially when it comes to Value Investing and Hedge Funds. 💵

That’s what makes ValueWalk Premium different. Some would say we’re “unusual.”

Our subscribers look forward to clear, easy-to-understand information they can act on.

Sign up for  today for only a few dollars a day and get a 3 day no obligation trial with a targeted 20% discount coupon code.

Cancel anytime during trial and you are never charged.

Limited time offer: For first 50 subscribers

0