Polaris Capital Management, LLC
A leading global & international money manager
In The News: 2005
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The views in these article excerpts and hyperlinks were those of the portfolio manager as of each article's publication date and may be subject to change. 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 refer the composite's most recent quarter end performance and related information. The article excerpts and hyperlinks reference individual securities that may or may not currently be held by the portfolios.
Reuters
"Investing: Asia--so far, so good. But so risky, so be careful"
October 10, 2005
There are good growth and investment
opportunity in Asia, according to Bernie Horn, portfolio manager at Polaris Capital Management. He claims that the difficulty lies in
picking the best stocks and sorting through the myriad conflicting issues
encountered when investing in Asia. Mr. Horn attempts to profit from
China's growth without buying Chinese stocks. Instead, he has been
investing in western companies that sell to China, thus seeking to
capitalize on the growth without getting over invested in companies that
might not be ready.
Smartmoney Magazine
"Around The World In 80 Stocks"
August 19, 2005
Bernard Horn, portfolio manager of Polaris Capital Management, believes some pockets of
value still exist in the U.S., but most are international. In picking
stocks that comprise the global portfolio, the management team scans
a universe of more than 24,000 stocks across 40 countries. Once stock
choices are made, Mr. Horn and his team apply the portfolios' capital
democratically, spreading assets evenly among the holdings instead of
loading up on favorites. Mr. Horn believes people might be
preparing for the day when the majority of investing is global.
MSN Money
"Company Focus: Stocks That Will Ride Europe’s Next Boom"
August 17, 2005
Bernie Horn, portfolio manager for Polaris Capital Management, discussed international stocks that are likely to thrive
in the near future. He points to ENI, an Italian energy company, which has a lot of refining capacity -
an advantage since tight production capacity has driven up refining margins. Another pick has been Dublin, Ireland-based CRH,
which supplies many of the basic building blocks of construction, like cement, asphalt, glass stone and gravel. The company
has low-cost sources for raw materials, says Mr. Horn, noting that the company also has a knack for growing through acquisition.
Boomer Market Advisor
"Should The Falling Dollar Matter?"
May 2005
(Byline Highlights -- Author Bernard
R. Horn Jr.)
around the world,
not to serve as a short-term currency play. Over long periods
of time,
the impact that currency gains and losses have on total equity returns
is immaterial (approximately 0.1% over the last 10 or more years).
long-term data that has
weathered differentmarket cycles.
most of the 60s, 70s and
80s as defined by the S&P 500 and MSCI-EAFE
Indices, while U.S.
stocks outperformed in the 1990s. In the future investors
will likely
experience periods when U.S. stocks outperform international equities
and vice versa. However, over time, returns of broad stock indexes have
been
similar.
tough global competition,
companies worldwide are aggressively restructuring.
In many cases,
foreign stocks now have significantly lower price/cash earnings
(P/CE)
ratios than their U.S. counterparts. Price to cash earnings ratio is the
value of a company's stock price relative to its cash earnings.
Investment News
"Investment Outlook: Prognosticators Offered Their Forecasts For 2005"
January 10, 2005
Investors looking for higher returns
in 2005 would be smart to look outside the United States, according to
Bernie Horn, president and portfolio manager of Polaris Capital
Management. A manager who
identifies companies that he feels are undervalued relative to their
peers, Mr. Horn believes returns in the U.S. will continue to be modest
and that outperformance remains within the international arena. He outlines the price to cash
earnings (P/CE) basis, where non-U.S. companies are trading at 8.6x
compared with 12.4x for U.S. companies. The disparity
in multiples is huge, according to Mr. Horn, partially due the 1990s
market activity.
The New York Times
"For Value Funds, A Tough Act To Follow"
January 9, 2005
Bernard Horn Jr. of Polaris Capital Management notes domestic blue-chip stocks now trade at
a 50% premium to their foreign equivalents on a price-to-cash earnings
(P/CE) basis. Accordingly,
the firm's management team has cut Polaris' portfolio exposure in domestic
stocks to 36%. Overseas,
Polaris has bought shares of George Wimpey P.L.C., a British homebuilder
whose P/CE multiple of six is half that of American competitors, Mr. Horn
said. The global portfolios are
also accumulating shares of Japanese utilities like Kansai Electric Power
and Tokyo Electric Power that are finally "getting religion" by curbing
capital spending to deliver free cash flow to
shareholders.
Bloomberg Television
"Morning Call: Bernie Horn Transcript"
January 3, 2005
Porfolios invested overseas are positioned
to do well in 2005, according to Bernie Horn, president of Polaris Capital
Management. In describing
Polaris' investment strategy, Mr. Horn and the management team look
for companies that have good free cash flow and that can be bought at a
good price. Mr. Horn and his team are looking
overseas to areas of the world that are growing rapidly - noting that the
job market is much stronger in low-cost countries. Outside the U.S.,
Polaris likes Japanese utility companies including Tokyo Electric Power,
Swedish air-bag maker AutoLiv, and an old favorite, German auto parts
maker Continental AG.
Financial Planning
"Global Goodies"
January 2005
(Byline Highlights -- Author Bernard
R. Horn Jr.)
review long-term data that
has weathered different market cycles. Consider an
historical market
perspective, with data gleaned from January 1969 to June 2004
(414
monthly observations). This data illustrates that the beta (measure of
volatility) of the MSCI-EAFE Index versus the S&P 500 Index is 0.59 when
measured using
monthly returns from this 35-year period. Measured this way
the benefits
of international diversification still exist.
most of the 60s, 70s and
80s as defined bythe S&P 500 and MSCI-EAFE Index,
while U.S. stocks
outperformed in the 1990s.
Investors should experience
periods when U.S. stocks outperform
international equities and vice versa. The
weak U.S. dollar
has also advanced foreign stocks held by U.S. investors - all
other
things being equal foreign stocks become more valuable as the underlying
foreign currencies appreciate.
baggage in favor of efficient environments. Following
lackluster stock
performance coupled with corporate restructuring,
foreign stocks now have
substantially lower price/cash earnings (P/CE)
ratios than U.S. counterparts.
9x
expected 2004 cash earnings (for the trailing 12 months), while many
U.S.
stocks (especially large-caps) remain overvalued. To justify the
high P/CE ratio
in the U.S. market, corporate earnings would have to
grow 50% faster than
foreign market companies. U.S. growth
is likely to outpace that of Europe and
Japan, but not by 50%; and many
Asian economies, such as Korea and China,
have actually been growing
faster than the U.S.
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