Polaris Global Value Fund
Polaris Capital Management
Performance
Products & Services
Management Reports
Polaris In The Media
Press Releases
Request To Be Contacted
125 Summer Street
Boston, MA 02110
Ph: (617) 951-1365
adviser_info@polariscapital.com
Management, LLC 2007.
All Rights Reserved.
The views in these article excerpts and hyperlinks were those of the Fund manager as of each article's publication date and may be subject to change. For the period ending December 31, 2007 the Fund's 1-, 5-, 10-year and since inception (7/1/89) average annual returns were -3.97%, 19.17%, 9.82% and 11.68%, respectively. Performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than original cost. Please click here for the Fund's most recent month end performance and related information. The article excerpxts and hyperlinks reference individual securities that may or may not currently be held by the Fund. Click here to view a recent listing of the Fund's top 10 holdings. Furthermore, please see additional disclosure at the end of this section.
|
Archive | ||||||
Investor’s Business Daily
“Fund Follows Cash Trail Across Globe”
December 21, 2004
In order to get into the Polaris Global Value Fund portfolio, stocks must clear a hurdle rate set for each, based on expected earnings growth, local economic growth rates and exchange rates, says Fund Manager Bernard R. Horn Jr. He argues that international markets have averaged about 6% after inflation and as a rule of thumb, if the fund’s management can’t buy a stream of cash thrown off by a company at a price that beats that particular market, then the management will look somewhere else.
Mr. Horn has learned valuable lessons about how firms operate overseas, providing examples of how earnings can be manipulated. If you really want to get a good picture of a company’s profitability, Mr. Horn claims, you should look at cash flow rather than just earnings. After checking with regional hurdle rates, Mr. Horn and his management team come up with an estimate of how much a firm can produce in cash flow for the next several years. Usually, Polaris is looking at three- to five-year horizon. Horn and his team dig into a company’s financial statements, talk with rivals and then meet with individual company managements.
Portfolio
International
“Economic
Power To Shift From US”
November 2004
(Byline
Highlights -- Author Bernard R. Horn Jr.)
-
There is little question that foreign markets can outperform the U.S. market for lengthy periods and vice versa. International investments outperformed U.S. investments for most of the 1960s, 70s and 80s, based on the S&P 500 and the Morgan Stanley Capital International – Europe, Australia and Far East Index. However, the close correlations of the mid 90s/early 2000 are an aberration resulting from fluctuations in the global “TMT” sector: telecom, media & technology.
-
Years of outperformance and an abundance of cheap stock picks reinforce the investing argument skewed to foreign bourses. Consider small and mid-cap companies demonstrating better value and dependence on local economies, as well as value stocks with strong cash flow, little debt and simple business models.
-
When determining stocks geographically, utilize a holistic approach. Carefully analyze the economic conditions/expansion and government policies of the country, and simultaneously assess how stocks and corporate managements capitalize on developments. For example, China has benefited from production and manufacturing outsourcing, leading to the prospect of 7% to 8% annualized economic growth. ASM Pacific Technology of Hong Kong has prospered as they sell equipment to process, package, and test the computer chips manufactured in the new Chinese high-tech factories.
International Herald Tribune
"Take Advantage of Global Boom"
June 26, 2004
Bernard Horn Jr., president and portfolio manager of Polaris Capital Management, has concentrated on foreign markets for about a quarter of a century. He points to the apparent correlation between foreign and U.S. stocks in the late 1990s and early 2000s as a fluke, resulting from a run-up in the telecom, media and technology sector. According to Mr. Horn, high-tech stocks worldwide rose so much that they distorted the broader country indexes. As examples, Mr. Horn notes that Nortel became one-third of the Canadian market and Nokia became one-half of the Finnish market. As a result of the sector rise, the indexes appeared more correlated. But this shouldn't discourage investors from considering international investing, he says.
U.S. News &
World Report
"Money & Business: Time for an Accent?"
Bernard R. Horn, manager of the Polaris Global Value Fund, has grown optimistic about Japan's domestic economy. He describes how many export companies already have high valuations, but many low-price opportunities exist in the smaller domestic-oriented companies. Mr. Horn mentions Maruichi Steel Tube, a maker of steel pipes and tubes, as one of his picks in the region. Elsewhere around the globe, Mr. Horn points to an upbeat U.K. market, where Polaris invests in homebuilders including Barrett Developments and George Wimpey.
Dow Jones Newswires
Future
wages will soon be undercut by lower-cost employees around the world,
according to Bernard R. Horn Jr., portfolio manager of the Polaris
Global Value Fund. He
believes a coming wage slide in the U.S. is one reason investors should
seek returns from international markets.
Seeking to offset loss of human wages by increases in wealth, Polaris scours the globe looking for value plays. Polaris recently added positions in electrical utilities in Japan and the U.S. Another sector where Mr. Horn has seen success is in United Kingdom homebuilders. Finally, Mr. Horn highlights what he considers well-valued companies in the global paper and metals industries.
The
Boston Globe
March
12, 2004
Bernard
R. Horn, Jr., president of Polaris Capital Management, comments on U.S.
market reactions and the vulnerability of the U.S.
The threat of terrorist attacks continues to cause world markets'
volatility.
The
Spain bombing allowed investors to sell, coming down off the stock
valuations reached at the end of 2003, Mr. Horn says. Now that large and
small stocks have shed gains, some prices are beginning to look more
attractive to bargain-hunting shops like Polaris. A value-oriented firm
with $235 million under its management, Polaris has been sitting on a
larger-than-usual pile of cash, waiting to take advantage of lower stock
prices.
Financial
Advisor
Bernie
Horn, manager of the Polaris Global Value Fund, discusses strong U.S.
investment plays as the economy recovers.
He mentions telecom operators, which are generating free cash flow,
as very strong competitors in the economic up cycle.
Verizon Communications likely will profit, according to Mr. Horn,
as the company has a very strong fixed line and wireless network.
Mr.
Horn also expresses optimism with U.S. healthcare companies (insurers and
HMOs). He predicts that the
growing collection of demutualized Blue Cross/Blue Shield plans could
allow for Anthem Inc. to become one of the biggest healthcare providers in
the country. Anthem's proposed merger with Wellpoint also leads to this
conclusion, according to Mr. Horn.
Entrepreneur
Magazine
"World Class: Diversity Pays Off For This Global Fund"
When shopping for new company investments, Polaris combines a number of investing strategies seeking positive fund performance. Polaris uses a combination of high-tech quantitative analysis, old-fashioned bottom-up stock picking, and a proprietary value calculation to determine stocks for the Fund's portfolio. Polaris' portfolios typically are well-diversified, holding at least 15 industries in 15 different countries. Portfolios typically have a low turnover rate, as the manager doesn't mind holding onto stocks evidencing potential, such as British homebuilders.
SmartMoney Magazine
“Goodbye U.S.A., Hello World”
January 2004
Bernie Horn, fund manager
of the Polaris Global Value Fund, spends a significant amount of time
reviewing countries, industry sectors and companies that offer the best
opportunities worldwide. Mr.
Horn has serious concerns about the U.S., finding that most stocks and the
market are overpriced, even considering recent strong economic growth. As
a result, Mr. Horn cut back his U.S. stock positions in the past year,
trimming back on Amkor Technologies, Sears Roebuck, Ametek and others –
but not before getting great returns on all of these stocks.
Mr. Horn’s philosophy/process is worth consideration, as he has been one of the most consistently good world-equity managers of the past five years. If not the U.S., then where does Mr. Horn see good opportunities? He mentions Japan utilities, UK homebuilders, Scandinavian basic-materials and industrial equipment firms and Swedish papermaker Svenska Cellulosa, among others.
On June 1, 1998, a limited partnership managed by the adviser reorganized into the Fund. The predecessor limited partnership maintained an investment objective and investment policies that were, in all material respects, equivalent to those of the Fund. The Fund's performance for the periods before June 1, 1998 is that of the limited partnership and includes the expenses of the limited partnership. If the limited partnership's performance had been readjusted to reflect the first year expenses of the Fund, the Fund's performance for all the periods would have been lower. The limited partnership was not registered under the Investment Company Act of 1940 ("1940 Act") and was not subject to certain investment limitations, diversification requirements, and other restrictions imposed by the 1940 Act and the Internal Revenue Code, which, if applicable, may have adversely affected its performance.
The Fund invests in securities of foreign issuers, including issuers located in countries with emerging capital markets. Investments in such securities entail certain risks not associated with investments in domestic securities, such as volatility of currency exchange rates, and in some cases, political and economic instability and relatively illiquid markets.
The MSCI World Index ("MSCI") measures the performance of a diverse range of global stock markets in the United States, Canada, Europe, Australia, New Zealand and the Far East. The MSCI is unmanaged and does include the reinvestment of dividends, net of withholding taxes. Price to cash flow is the ratio of a stock's latest closing price divided by cash flow per share for the past 12 months.