Transcript
SKAGEN Focus Statusrapport juli 2015
Hovedtrekk - juli 2015 • Fondet er svært konsentrert og med et bredt globalt mandat. Målsetningen er å investere i noen få
selskaper med eksepsjonell risk/reward-profil med fokus på absolutt avkastning. • Målet er 30-35 poster, hvorav de 10 største skal utgjøre 40-50 prosent av porteføljen. Ved utgangen av juli var det 28 poster i fondet, og de ti største posisjonene utgjorde 50 prosent av porteføljen. Den største posisjonen i fondet er det amerikanske forsikringsselskapet AIG, som utgjør 8,1 prosent av fondet. • Fondet falt med 1,6 prosent i juli, og var negativt påvirket av fortsatt fall i råvarepriser, deriblant olje. Det har også vært en generell negativ utvikling i Kina-relaterte selskaper i porteføljen som følge av en bred nedgang i kinesiske aksjer. Siden start 26. mai 2015 har fondet falt 5,5 prosent. Vi har benyttet denne nedgangen til å pløye mer kapital inn i de posisjonene vi har plukket ut for fondet. Kontantbeholdningen er i øyeblikket så vidt over 9 prosent. • AIG, Jenoptik og Omega Protein var de sterkeste positive bidragsyterne til fondets avkastning i juli. Whiting Petroleum, Pan America Silver og SK Hynix var de største negative bidragsyterne i løpet av måneden• Fondets brede mandat reflekteres i både den geografiske og sektormessige sammensetningen. Fondet er i tillegg agnostisk når det gjelder market cap, og i øyeblikket utgjør small-cap 25 prosent av fondet. Mid- og large-cap er respektive 25 og 40 prosent av fondet. Disse tallene kan variere mye over tid. • Fondet søker å måle avkastning og potensialet i absolutte termer. Når det gjelder risiko, akkumulert og etter vårt interne monitoreringssystem, så er de største risikofaktorene “Acquisition Risk,” noe som reflekterer mye kontanter i selskapenes balanser, samt “Price Competition,” som indikerer kontrære posisjoner i det som er oppfattet som sykliske industrier. I tillegg, på grunn av upopulære undersektorer innen finans, vil en økning i rentene i verden påvirke flere poster svært positivt.
* Med mindre annet er oppgitt er alle avkastningstall for fondet i denne rapporten knyttet til klasse A, og etter fradrag for gebyrer
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Avkastning, juli 2015
Juli SKAGEN Focus A Verdensindeks* Meravkastning
*Note: Start dato: 26. mai 2015
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Siden start* -1,6% -5,5% 4,3% 3,4% -5,9% -8,8%
Markedsutvikling i juli 2015 (%) Danmark Frankrike USA (Nasdaq) Ungarn Sveits Belgia Nederland Italia Finland Spania Østerrike Storbritannia USA (S&P 500) Tyskland Sverige India Verdensindeksen Japan Norge Mexico Indonesia Sør-Afrika Polen Singapore Canada SKAGEN Focus A Sør-Korea Tyrkia Hong Kong Russland Vekstmarkedsindeksen Thailand Taiwan Brasil Kina (lokal) Kina (Hong Kong) 4
10 9
8 7 7 7 6 6 6 5 5 4 4 1 1 0 -1 -1
-10 -10 -11
-4 -4 -4
-2 -2 -2 -2
-2
0
2
7
8 8
9 8
Største bidragsytere juli 2015 Største positive bidragsytere
Selskap
Største negative bidragsytere
NOK (000)
Selskap
NOK (000)
American International Group
4 560
5E+06 Whiting Petroleum
-7 564
Jenoptik
3 850
4E+06 Pan American Silver
-5 458
Omega Protein Corp
2 626
3E+06 SK Hynix
-5 192
SBI Holdings
1 673
2E+06 Rentech
-3 831
Ubiquiti Networks
1 454
1E+06 China Child Care Corp
-2 420
Sandisk
1 442
1E+06 Solazyme
-2 018
Aercap Holdings
1 337
1E+06 GCL-Poly Energy Holdings
-1 988
Uniqa Insurance Group
1 016
1E+06 AirAsia
-1 818
Stock Spirits Group
987 987414 Magforce
-1 690
CIT Group
867 867349 Fila Korea
-1 289
Total verdiskapning hittil i 2015:
Note: Bidrag til absoluttavkastning
5
NOK -16 millioner
Største bidragsytere siden oppstart Største positive bidragsytere
Selskap
Største negative bidragsytere
NOK (000)
Selskap
NOK (000)
American International Group
7 664
5E+06 SK Hynix
-10 344
Omega Protein Corp
3 748
4E+06 South32
-8 316
Jenoptik
2 606
3E+06 AirAsia
-8 186
Ubiquiti Networks
2 230
2E+06 Pan American Silver
-6 949
CIT Group
1 412
1E+06 Whiting Petroleum
-6 930
Stock Spirits Group
1 174
1E+06 GCL-Poly Energy Holdings
-5 574
Uniqa Insurance Group
877
1E+06 Rentech
-5 105
Citizens Financial Group
865
1E+06 China Telecom Corp
-4 917
Aercap Holdings
762 987414 China Child Care Corp
-3 809
Magforce
646 867349 Hyundai Motor
-2 483
Total verdiskapning hittil i 2015:
Note: Bidrag til absoluttavkastning
6
NOK -48 millioner
Kjøp og salg, juli 2015 Kjøp •
Vi var med på kjøpersiden i Citizens Financial når RBS solgte ned sin eierandel. Vi mener at en større andel fri flyt av aksjer i selskapet og en potensiell inkludering i indekser i fremtiden vil være positivt for aksjen, i tillegg til forbedringer i selskapets drift og resultater.
•
Det fant sted et kraftig likviditetsdrevet fall i kinesiske aksjer i juli. Dette fallet gjorde det mulig for oss å øke vår posisjon i China Telecom på veldig attraktive nivåer.
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Det var noen bransjerelaterte rykter rundt SK Hynix, som gjaldt oppkjøpsinteresse for en av Hynix sine konkurrenter fra kinesiske aktører, noe som skapte bekymring rundt økt minnetilbud. Vi brukte denne kurssvekkelsen til å øke vår posisjon.
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Salg
Viktigste endringer i juli 2015 Økte poster
Reduserte poster Juli
Juli
SK Hynix Inc Uniqa Insurance Group AG Fila Korea Ltd Pan American Silver Corp China Telecom Corp Ltd Citizens Financial Group Inc
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Største poster i SKAGEN Focus per 30. juli 2015
Kurs American International Group Inc Carlsberg AS-B SBI Holdings Inc Citizens Financial Group Inc SK Hynix Inc Jenoptik AG Omega Protein Corp South32 Ltd China Telecom Corp Ltd Hyundai Motor Co Pref (2pb) Vektet gjennomsnitt topp 10 Vektet gjennomsnitt alle 28 posisjoner
64,1 592 1723 26,1 37100 11,9 14,2 1,8 4,3 103000
P/E 2015e 13,0 17,5 12,0 16,3 6,1 14,5 12,2 18,2 17,6 3,6
P/E 2016e 11,5 15,4 11,3 13,2 6,2 13,5 9,7 11,4 15,8 3,9
P/BV siste 0,8 1,6 1,0 0,7 1,5 0,5 1,2 0,5 1,2 0,4
Kurs Posisjonens mål størrelse (%) 90 8,1 900 5,2 3000 5,2 35 5,2 65 000 4,7 20 4,6 20 4,3 3 4,3 8 4,2 200 000 4,0
10,6
9,8
0,8
49,9 % 90,6 %
Kontanter
9,4 %
Total portefølje
100 %
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Sektor og geografisk fordeling mot indeks, juli 2015 Geographical distribution
Sector distribution
Fund
4
Energy
Asia DM
7 7
Materials
5 13 10
Europe EM
10
21 0 1 34
North America
3
Health
55
13 27
Banking & Finance
4
Oceania
2
22 10
IT
5
The Nordics
2
Latin America
0 1
Middle East & Africa
0 1
14 7
Telecom
10
15
Europe DM ex. The Nordics
13 13
Consumer staples
Cash
7
7
Consumer discretionary
4 0 3 9 0
Cash
Index
20
Asia EM
Industrials
Utilities
11 10
9 0
Nyheter og annet om porteføljeselskaper – på engelsk
Key earnings releases and corporate news, July 2015 Citizen Financial (5.2% weight) (xxx%)
Investment case update: After suffering from a long period of mismanagement within Royal Bank of Scotland (RBS LN; still owns 40% of CFG), the company is producing returns that are roughly half the level of relevant US regional bank competitors. The company has implemented a cost-savings program of USD 200M to the end of 2016. There is a substantial gap between the deposit market shares of the company and market shares in traditional banking products, such as mortgages, which highlights the business growth opportunity for the company. The company still has capital levels that are meaningfully higher than its competitors and there are substantial opportunities to optimize its capital levels. The company highlighted headwinds from the pro-longed low interest rate environment; they have one of the most asset-sensitive balance sheets among the regional banks in the US. We think this may push out mid-term ROE ambitions somewhat but not to an extent that derails the investment case. We still think CFG should be able to generate at least peer group ROE’s in the mid-term (around 10%) and possibly levels of around 12 % longer term and over time command a much higher valuation of its stock. The company also filed for an upcoming share offering of a shareholder, presumably RBS, which still owns about 40% of the stock. This may help explain the short term negative reaction in the shares, but over time this will be a positive factor with increasing free float and potential inclusion in broader US indices. Summary: The company reported, adjusted for restructuring costs, net income of USD 215M (40 cent/share) which was a 5% increase over last year. Net interest income was up 1% YoY while non-interest income was up 2%. Non-interest expenses were down 4% from a year earlier. Loan/deposit ratio stable at 97%. Guidance: Broadly reaffirm overall FY 2015 guidance provided on 4Q14 earnings call. Main headwind from pro-longed low interest rate environment; now assuming only one rate hike to year end 2015.
SK Hynix (4.7% weight)
Investment case update: SK Hynix announced on 22 July that it has decided to buy back KRW 859bn worth of common shares (22mn, around 3% of market cap). This is the first time SK Hynix has decided to buy back its shares since 2000, when the global semiconductor market reached its highest peak prior to the recent bull cycle. The second-quarter profit missed analysts’ estimates as weakening demand for personal computers reduced prices for its memory chips. Net income, excluding minority interest, was 1.11 trillion won second quarter which was slightly below consensus expectations. The company is seeing slowing demand for smartphones and computing devices in its key markets, especially China, which reduced orders for the chipmaker’s dynamic random access memory chips. The company however continues to be well positioned for a structural recovery and we think that concerns regarding further PC weakness and Samsung supply increases are overdone and to a large extent already discounted in the company’s very attractive valuation metrics. Summary: Share buyback: According to a regulatory filing SK Hynix announced that the company will aim to buy back 22m shares between July 23 and October 22. Current number of outstanding shares are 728m, which makes the buyback program equivalent of 3% of current market cap. Q2: The Company posted the consolidated second quarter revenue of 4.6 trillion won; a decrease of 4% from 4.8 trillion won for the previous quarter due to declines in PC demand. However, year-on-year the revenue rose 18% as well as operating profit totaled 1.38 trillion won; an increase of 27% thanks to steady demand for server and mobile applications. Net income amounted to 1.1 trillion won with net margin of 24%. Over the previous quarter, DRAM and NAND Flash bit shipment increased 4% and 8% but the average selling price slipped 8% and 6% respectively.
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Key earnings releases and corporate news, July 2015 South32 (4.3% weight) (xxx%)
Investment case update: Australia based South32 is a diversified mining company with production in alumina (32%), aluminium (24%), silver (17%), coal (14%), manganese (7%) and nickel (6%). The company was demerged from BHP Billiton in May 2015. The company’s first stand-alone production report results did not however yield many surprises. Amongst the major commodities both silver, manganese ore, coal, nickel were in line, but alumina and aluminium production were somewhat below views. The company had earlier communicated they would temporarily suspend capacity in certain manganese production assets to respond to challenging market conditions and also take a USD 1,9bn non-cash write down on assets mainly in manganese. In its short life as a stand-alone company; the development for commodity prices has clearly not benefited the company. However, the company will host its first strategy update in late August as a stand-alone company which could provide tangible triggers for the investment case. We would expect details on the strategy for substantial cost-cutting in its operations and intentions to execute future asset sales/optimization of its asset portfolio. The solid balance sheet and substantial free cash flow generation would also support attractive shareholder returns in the mid-term. Summary: The company reported quarterly production numbers. The separated S32 assets within each metal (production, YoY): Alumina -1%, Aluminium (-14%), Energy Coal (12%), Metallurgical coal (25%), Manganese ore (4%), Manganese alloy (7%), Nickel (-9%), Silver (-10%), Lead (-2%), Zinc (24%).
SBI Holdings (5.2% weight) (xxx%)
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Investment case update: In line with expectations the company delivered driven by SBI securities +10bn (already reported sales) and positive results from biotech when adjusting for 3.8bn write down. Aiming for 40% total payout ratio, which implies a 4% dividend/buyback. Summary: 1Q pretax profit rose 10% QoQ to ¥14.9bn and NP rose by 13% to ¥11.6bn. Net profit came to 37% and 43% of the consensus and our full-year forecast in 1Q FY3/16, respectively, a robust start helped by a higher stock market and one-time low nominal tax rate (22%). Annualized ROE came to 12%.
Key earnings releases and corporate news, July 2015 CIT Group (3.1% weight) (xxx%)
Investment case update: CIT is a specialty finance company operation in the US. The in-line earnings report, indicating further pressure on net finance margin from a year ago but relatively stable credit metrics was overshadowed by potentially more clarity with regards to the synergies in the OneWest acquisition. This was unfortunately pushed out by another quarter. The company has been suffering from uncertainty on the deal approval and in general negative earnings revisions due to the continued low interest rate environment and increased competitive pressures. We continue to believe the company is at an inflection point, where the synergies from the cash-financed OneWest deal and potentially a more benign interest rate climate, will drive returns significantly higher in the mid-term. The stock is trading at a discount to tangible book value (USD 47.5 as of 30th of June). The company continues to return excess capital and bought back another 1.3M shares in 2Q15 and has decreased its share count by 13% over the last three years. Summary: The company reported net income of USD 115M (0.66/share), up 10% Q/Q. Interest income was largely flat (USD 275M), while provisions were lower Q/Q driving an improvement. Rental income was flat Q/Q (USD 532M). Operating expenses were down 3% from last quarter. Tangible book value per share increased slightly to USD 47.5. Tier one capital ratio of 14.4% unchanged from a year ago (fully phased in Basel III). Non-accrual loans increased somewhat to 1% of receivables from 0.95% in the last quarter.
Komatsu (3.1% weight) (xxx%)
Investment case update: Japanese construction and mining equipment producer Komatsu reported quarterly numbers in line with low expectations. While the North American and Japanese construction business within the company is producing decent results, the mining equipment business has been suffering from large cuts in spending by the major miners globally on the back of falling commodity prices. However, we think the current very conservative guidance (-30% Y/Y) for mining equipment units could be met or even be exceeded with replacement demand. Also, parts sales and services are growing at a healthy clip (12% Y/Y). Mining part sales increases (20% Y/Y) as miner inventories normalize after delaying purchases. Any further signs of stabilization in the mining segment would be a positive catalyst for the stock. Summary: The company reported net sales of JPY 446bn (down 3% Y/Y). Operating income fell to JPY 50bn (down 21% Y/Y). The company maintained its guidance for the year indicating marginally falling net sales and operating profit for the full year. Encouraging signs in the report were a 35% Y/Y increase in North American construction sales; however negatively compensated with a decrease in Chinese construction sales. Another positive sign in the report was signs of stabilization in mining equipment units that were flat Q/Q vs an annual guidance of -30%.
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Key earnings releases and corporate news, July 2015 SanDisk (2.4% weight) (xxx%)
Investment case update: SanDisk reported Q2 results that were ahead of in general depressed expectations. NAND pricing continues to be under pressure which brought revenues down 24% year on year. Revenues (USD 1.23bn) came in better than expected in the quarter but importantly the company reported higher than expected gross margins (41.9%). The better margins were mainly due to improved product mix of retail and enterprise along with lower costs. Supply constraints first reported in the end of 2014 it seems now have been fully addressed through a 5% increase in production capacity. Management also confirmed the outlook for 2015 in terms of revenues (USD 5.4bn – 5.7bn) and expects a stable industry environment during the rest of the year. We see the margin improvement as a positive sign of management’s ability to turn around the business and continue to believe that SanDisk is a key target in the ongoing consolidation in the industry. The company further has a solid balance sheet with a net cash position (USD 1.5bn) which would support increased shareholder returns in the mid-term. Summary: The company announced results for the second quarter. Second quarter revenue of 1.24 billion decreased 24 percent on a year-over-year basis and decreased 7 percent sequentially. Second quarter net income was 136 million, or 0.66 per share, compared to net income of 329 million, or 1.41 per share, in the second quarter of 2014. The company reported a gross margin of 41.9%.
Whiting Petroleum (1.9% weight) (xxx%)
Investment case update: Whiting Petroleum is an independent E&P company primarily focused on on-shore oil properties in the US. The company did raise capital in early 2015 after the poorly timed acquisition of Kodiak Oil and Gas, and has bought itself time to become a more efficient operator at current oil price levels. The company is implementing several initiatives to bring down costs across its operations. More efficient drilling techniques are driving significant improvement in well results (disclosed 40-50% uplift in key Bakken fields vs 15% cost increase in the quarter). Oil service costs are falling rapidly and could come down another 10% in 2016 if oil prices were to stay on these levels. In the quarter non-core asset sales of USD 180M were announced and we expect the company to execute further divestures to bring down net debt. The updated guidance for lower capex in 2015/2016 is a prudent measure in current oil price environment. Summary: The company reported a roughly breakeven quarter (adjusted Q2 EPS of USD 0.04) which was an improvement from the previous quarter, and generated a 2% Q/Q production growth (170 mboed) despite asset sales of USD 180M. Realizations (incl hedges) averaged USD 44.6/boe. The company cut its capex outlook for next year to about USD 1bn (from about USD 2bn this year) in line with estimated cash flows. For next year, the production is estimated to fall 10% from 2015.
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The largest companies in SKAGEN Focus AIG is an international insurance company serving commercial, institutional and individual customers. The company provides property-casualty insurance, life insurance and retirement services. AIG was at the very centre of the financial crisis as the central bank for mortgage insurance – it was bailed out in a USD 180bn bail out. The company has two core insurance holdings: Sun America and Chartis that it intends to keep. The company has set a target to achieve 10% ROE by 2015. Carlsberg A/S is an international brewing company. The company produces branded beers and regional brands. Carlsberg makes most of its beer outside of Denmark and it is sold in markets around the world. The company also markets and produces soft drinks, water and wine.
Japanese company established in 1999 as an online financial services company, incubation arm of Softbank. Acquired E*Trade Securities in 2003, Softbank sold out in 2006. Three main businesses: i) Financial services; ii) Asset management, iii) Biotech Financial services: Building ecosystem to offer full range of financial services: SBI Securities: Dominant provider of online securities services in Japan #3 in new tax-saving NISA behind Nomura and Daiwa. SBI Sumishin Net Bank: pureplay internet bank. Also active within insurance (Life & Non-life), Mortgages (through securitization), trading system and FX trading.
The company is one of the oldest financial firms in the US, with headquarters in Providence, Rhode Island, with its roots going back to 1828. It is today the 13th largest retail bank in the US with a footprint in New England, the Mid West and the Mid Atlantic, with over 1200 branches in 11 states. The company was listed in September 2014 after being spun off from the UK-based bank Royal Bank of Scotland (RBS).
SK Hynix Inc. is a Korea-based company engaged in the manufacture of semiconductors. The Company mainly develops and manufactures memory and non-memory semiconductors. Its memory semiconductors include dynamic random access memory (DRAM), multi-chip products (MCPs) and NAND flash memory semiconductors, which are used for cellular phones, PC, digital televisions, digital cameras and other electronic products. The company has the number three market share (in the current oligopoly) in DRAM, behind Samsung and Micron
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The largest companies in SKAGEN Focus Jenoptik AG is a Germany-based company engaged in the field of optoelectronics. Its main activities are divided into three segments: the Laser & Optical Systems segment, the Metrology segment, the Defense & Civil Systems segment. The Laser & Optical Systems segment encompasses Laser and Material processing division, which is engaged in semiconductor materials and diode lasers. The Metrology Segment is engaged in manufacturing of high precision contact and non-contact metrology systems; and the Traffic Solutions division comprises products and solutions for road safety. The focus areas of the Defense & Civil Systems are military and civil vehicle, rail and aircraft equipment. Omega Protein Corporation is a nutritional ingredient company and the United States that markets fish meal and fish oils from menhaden, an oily, virtually inedible fish found in the Gulf of Mexico and in the Atlantic Ocean. The Company fishes for its own source of raw material and without their own catch. They are the largest U.S. producer of Omega -3 fish oil and specialty fish meal products. These heart-healthy fish oils have experienced rapid growth as a dietary supplement and the fish meal is finding increasing usage nutritional food additives. Australia based South32 is a diversified mining company. The company is active in Alumina, Aluminium, Silver, Coal, Manganese and Nickel. The company was demerged from BHP Billiton in May 2015. The operating assets of the company are located in Australia (Alumina, Silver and Manganese), South Africa (Aluminium, Energy coal, Manganese) and Brazil (Aluminium). The majority of the assets are in the first or second quartile of their respective cost-curves. It is one of the few miner majors that do not have exposure to iron ore.
China Telecom is full services integrated information service operator in China. The Company, along with its subsidiaries, is engaged in the provision of basic communications services, including wireline telecommunications services, mobile telecommunications services, value-added services, such as Internet access services, integrated information services and other related services within the service area of the Company. China Mobile, China Telecom and Unicom are the largest and dominant service providers in the country. China Telecom is the growing 2nd player behind China Mobile, in a maturing industry, yet with massive growth in data downloads.
Hyundai Motor is the world's 5th largest car maker, including their 39% stake in Kia Motor. Sold 8m cars in 2014 and has a ca. 5% global market share. Focus on smaller/less expensive cars. Strong position in several countries and in emerging markets such as India and China.
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For mer informasjon, vennligst se: Siste Markedsrapport Informasjon om SKAGEN Focus på våre nettsider
Historisk avkastning er ingen garanti for framtidig avkastning. Framtidig avkastning vil blant annet avhenge av markedsutviklingen, forvalters dyktighet, fondets risiko, samt kostnader ved kjøp og forvaltning. Avkastningen kan bli negativ som følge av kurstap. SKAGEN søker etter beste evne å sikre at all informasjon gitt i denne rapporten er korrekt, men tar forbehold for eventuelle feil og utelatelser. Uttalelsene i rapporten reflekterer porteføljeforvalternes syn på gitt tidspunkt, og dette synet kan bli endret uten varsel. Rapporten skal ikke forstås som et tilbud eller en anbefaling om kjøp eller salg av finansielle instrumenter. SKAGEN påtar seg intet ansvar for direkte eller indirekte tap eller utgifter som skyldes bruk eller forståelse av rapporten. Ansatte i SKAGEN AS kan være eiere av verdipapirer utstedt av selskaper som er omtalt enten i denne rapporten eller inngår i fondets portefølje.
