LongLeaf Partners 2014 Semi-Annual Report This appears to be a longer report from the one we posted several weeks ago (which can be found here).
Sino Land in the first quarter, we added Hopewell, K. Wah, and Mineral Resources over the last three months. As these recent purchases indicate, we are currently seeing more opportunities in companies that are based in – or impacted by – macroeconomic factors in the Asia Pacific region. Broad macro fears of reduced Chinese consumer demand, as well as worries of a potential Chinese real estate bubble, have impacted companies as far ranging as Hong Kong
real estate, Macau gaming, and Australian mining services. What separates the companies we have bought from others impacted by China fears are our management partners, most of whom are significant owner-operators with track records of value creation.
Conversely, in Europe and particularly the U.S., many companies are reaching and surpassing intrinsic worth. We sold
DIRECTV in the first quarter and TNT Express more recently. The Fund’s geographic distribution reflects the disparity in valuations – less than 40% of the portfolio is in U.S. companies while over one-third is in the Asia Pacific region.
The Fund’s price-to-value ratio (P/V) is in the mid- 70s% with cash at 9%. This liquidity will give us agility when individual stocks from our on-deck list come into the range of our required discount to intrinsic value. We expect new purchases at deep discounts will make the P/V even more
attractive, as should the strong value growth we
anticipate our management partners delivering.
Ful PDF here QuarterlyReport2Q2014-0_0