Polaris Capital Management, LLC
A leading global & international money manager
In The News: 2007
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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.
Fortune Magazine
"Investor's Guide 2008 - Harvesting The Top Foreign Stocks"
December 24, 2007
Smart value hounds continue to sift through the battered financial sector, looking for stocks that have been unfairly punished for the sins of others. The Bank of Ireland is one such name, suggests Bernard Horn, manager at Polaris Capital Management. The stock has taken a hit as Ireland suffers through its own housing slump, but Mr. Horn argues that the long-term picture for the Bank of Ireland remains solid, largely because favorable corporate tax rates could result in a continuing flow of businesses and immigrants into the country. The bank also has little exposure to structured investment vehicles or collateralized debt obligations.
Business Week
"Stocks Drop On Profit, Oil Concerns"
October 17, 2007
Major U.S. stock indexes ended lower on continued worries about fourth-quarter corporate profits and the inflation implications of surging oil prices. Downbeat news on the housing sector also weighed on equities. This is the first quarter where the negative fallout is being seen from the upward adjustment of interest rates on the riskier loans the more aggressive banks began to make once credit spreads flattened, said Bernard Horn, Jr., a portfolio manager at Polaris Capital Management in Boston. The more aggressive banks may not have sufficient reserves to back the loans they've made, while the banks backed by deposits, on which the interest rates have come down since the Federal Reserve interest rate cut, should have a fair amount of [higher-quality] capital that should allow them to easily weather the storm, commented Mr. Horn.
Smartmoney Magazine
"Fishing for Values In Foreign Markets"
August 1, 2007
A homebuilder based in Helsinki, Finland, YIT has discovered a profitable niche: building Western-style housing in Russia. Thousands of middle-class Russians are moving out of rundown Soviet-era apartments into modern, amenity-laden homes, and YIT is building those units as fast as it can. According to Bernard Horn of Polaris Capital Management: People are lifting themselves up in Russia and YIT is benefiting. You can’t buy into that trend with a U.S. company.
Kiplinger's
"Screening The World's Bargain Bins"
June 7, 2007
Polaris Capital Management illustrates one of the advantages of a quantitative approach to stock picking: Computers are immune to pressure from fads and indexes. Not to mention they can crank through thousands of stocks like it's nobody's business -- sometimes with marvelous results. Horn's computers focus foremost on free cash flow, basically the amount of cash profits left after the capital expenditures needed to maintain a business. His quantitative models rank 24,000 companies around the globe on the basis of free-cash generation. The screens churn out about 500 names that merit further attention. Horn and his four analysts develop financial models of each company and in many cases meet with executives of potential investments, as well as officials from rival corporations. Horn brings a cautious eye to the table -- he likes companies that appear to be good buys regardless of future growth.
The Wall Street Journal
"Global Investing: One-Stop Shopping"
June 4, 2007
The case for buying a world stock fund can be pretty simple: The globe is your oyster. Managers of world-stock funds can pool the best ideas of analysts across their firms, regardless of where the companies those analysts follow are based. To get a look at the world funds category, The Wall Street Journal turned to three managers who Morningstar says represent different and smart ways of approaching a world fund – one of whom is Bernard Horn Jr. at Polaris Capital Management.
At Polaris Capital Management, stock selection begins with data crunching. Using proprietary software, computers continually screen thousands of stocks from around the world, zeroing in on free cash flow, a measure of a company's available cash. Currency risk and country-specific data like economic growth and demographics are incorporated. Of the several hundred stocks that emerge from that process as candidates for investment, dozens end up in the portfolio at any one time based on further research. Historically, stock selections typically span about 15 countries and 15 industries and are held for three to five years.
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