The focus: Companies in foreign countries that trade at a bargain.
The process: David Herro and his comanager Michael Manelli seek firm with executives who act like owners, that generate positive free cash flow (cash earnings after capital expenditures) and that reinvest profits wisely. But they only buy if the stock sells for at least 30% below their assessment of a firm’s intrinsic value per share—what a buyer would pay to acquire that entire business.
The track record: Over the past year, the fund’s return outpaces all but 7% of its peer group, funds that invest in large, value-priced foreign companies. The fund’s long-term record is even better: Over the past 10 and 15 years, it ranks among the top 1% of its peers. If you want to buy shares for the first time in Oakmark International, you must now buy directly from the firm. The fund is closed to new investors at most brokerage firms, including Fidelity and Schwab. If you already own shares, this news doesn’t affect you. You can still buy shares through your brokerage firm or directly from Oakmark.
