Smead International Value Fund Class A Shares · NASDAQ:SVXAX
Smead International Value Fund Class A Shares — Smead US Value UCITS Fund — Q1 2021 Earnings Presentation
46 slides from Smead International Value Fund Class A Shares's earnings presentation, June 2021
Slide 1: Smead US Value UCITS Fund 1st Quarter 2021 Webcast
©2021 Smead Capital Management, All Rights Reserved Smead US Value UCITS Fund 1st Quarter 2021 Webcast This material is provided for informational purposes only and should not be construed as investment advice. Forecasts and opinions reflect the personal judgments of the presenter and may not reflec
Slide 2: Today's Agenda
Today’s • Performance, Characteristics and Top 10 Holdings Agenda Cole Smead, CFA, Portfolio Manager • Featured Stock: Merck & Co., Inc. (MRK) Tony A. Scherrer, CFA, Portfolio Manager • Winning the Peace Bill Smead, Lead Portfolio Manager 2
Slide 3: Quarter-End Performance
Quarter-End Performance As of 31 March 2021 Since Inception Q1 2021 YTD 1 Year 3 Year 5 Year (29/11/2013) I USD ACC 13.32% 13.32% 69.47% 13.03% 13.12% 9.15% Smead US Value UCITS Fund S&P 500 NR Index 11.26% 11.26% 56.09% 10.96% 11.74% 7.59% Russell 1000 Value Net Index 6.18% 6.18% 56.35% 16.78% 16.2
Slide 4: Key Facts and Characteristics
Key Facts and Characteristics As of 31 March 2021 Past performance is no guarantee of future results. P/E: Price to earnings ratio. 4
Slide 5: Top Ten Holdings
Top Ten Holdings As of 31 March 2021 Percentage of Fund Lennar Corp 6.37% American Express Co 5.72% Target Corp 5.62% NVR Inc 5.34% Amgen Inc 4.95% Merck & Co Inc 4.91% Continental Resources Inc 4.67% JPMorgan Chase & Co 4.58% Bank of America Corp 4.23% eBay Inc 4.11% 0.00% 1.00% 2.00% 3.00% 4.00% 5
Slide 6: Portfolio Additions / Deletions
Portfolio Additions / Deletions AsFirst of 31Quarter March 2021 • New positions: • Trims to position weightings: - Discovery Inc Series C (DISCK) - Accenture (ACN) - Walgreens Boots Alliance Inc. (WBA) - Walt Disney Co. (DIS) • Adds to position weightings: - Discovery Communications Inc. (DISCA) - A
Slide 7: Today's Agenda
Today’s Performance, Characteristics and Top 10 Holdings Agenda Cole Smead, CFA, Portfolio Manager • Featured Stock: Merck & Co., Inc. (MRK) Tony A. Scherrer, CFA, Portfolio Manager • Winning the Peace Bill Smead, Lead Portfolio Manager 7
Slide 8: Featured Stock: Merck & Co., Inc. (MRK) - Our Eight Criteria
Featured Stock: Merck & Co., Inc. (MRK) OUR EIGHT CRITERIA Required over entire holding period 1. Meets an economic need 2. Strong competitive advantage (wide moats or barriers to entry) 3. Long history of profitability and strong operating metrics 4. Generates high levels of free cash flow 5. Avail
Slide 9: Featured Stock: Merck - Meets an Economic Need
Featured Stock: Merck & Co., Inc. (MRK) MEETS AN ECONOMIC NEED Past performance is no guarantee of future results. Source: Company Fact Sheet 9
Slide 10: Featured Stock: Merck - Strong Competitive Advantage
Featured Stock: Merck & Co., Inc. (MRK) STRONG COMPETITIVE ADVANTAGE Past performance is no guarantee of future results. Source: Trefis 10
Slide 11: Featured Stock: Merck - Strong Competitive Advantage
Featured Stock: Merck & Co., Inc. (MRK) STRONG COMPETITIVE ADVANTAGE Past performance is no guarantee of future results. Source: Merck Pipeline Q1 2021; RBC Initiation of Coverage report 11
Slide 12: Featured Stock: Merck - Profitability & Operating Metrics
Featured Stock: Merck & Co., Inc. (MRK) LONG HISTORY OF PROFITABILITY & OPERATING METRICS Past performance is no guarantee of future results. Source: Bloomberg. 12
Slide 13: Featured Stock: Merck - High Levels of Free Cash Flow
Featured Stock: Merck & Co., Inc. (MRK) HIGH LEVELS OF FREE CASH FLOW Past performance is no guarantee of future results. Source: Bloomberg. 13
Slide 14: Featured Stock: Merck - Low Price Relative to Intrinsic Value
Featured Stock: Merck & Co., Inc. (MRK) LOW PRICE IN RELATION TO INTRINSIC VALUE Past performance is no guarantee of future results. Source: FactSet. 14
Slide 15: Featured Stock: Merck - History of Shareholder Friendliness
Featured Stock: Merck & Co., Inc. (MRK) HISTORY OF SHAREHOLDER FRIENDLINESS Past performance is no guarantee of future results. Source: Bloomberg. 15
Slide 16: Featured Stock: Merck - Strong Balance Sheet
Featured Stock: Merck & Co., Inc. (MRK) As of 31 March 2021 STRONG BALANCE SHEET Past performance is no guarantee of future results. Source: 16
Slide 17: Featured Stock: Merck - Insider Ownership
Featured Stock: Merck & Co., Inc. (MRK) As of 31 March 2021 INSIDER OWNERSHIP Past performance is no guarantee of future results. Source: Merck Investor Day 17
Slide 18: Today's Agenda
Today’s Performance, Characteristics and Top 10 Holdings Agenda Cole Smead, CFA, Portfolio Manager Featured Stock: Merck & Co., Inc. (MRK) Tony A. Scherrer, CFA, Portfolio Manager • Winning the Peace Bill Smead, Lead Portfolio Manager 18
Slide 19: Winning the Peace
©2021 Smead Capital Management, All Rights Reserved Winning the Peace Presented by: Bill Smead Lead Portfolio Manager www.smeadcap.com/UCITS Opinions expressed are those of Smead Capital Management, are subject to change, are not guaranteed, and should not be considered recommendations to buy or sel
Slide 20: Agenda
Agenda • Who Won the War? • Who Wins the Peace? • Where to Invest for the Peace? 20
Slide 21: Who Won the War? Stay At Home Stocks
Winning the Peace Who Won the War? Stay At Home Stocks Past performance is no guarantee of future results. Source: Yardeni; Cypress Capital March 26, 2021 21
Slide 22: Who Won the War? Work From Home Stocks
Winning the Peace Who Won the War? Work From Home Stocks Past performance is no guarantee of future results. Source: Bloomberg 22
Slide 23: Who Won the War? The Unprofitable
Winning the Peace Who Won the War? The Unprofitable Past performance is no guarantee of future results. Source: Cypress Capital March 26, 2021; 23 https://www.barrons.com/articles/the-booming-ipo-market-shows-no-signs-of-slowing-what-investors-need-to-know-51615546800
Slide 24: Who Won the War? The Fed / Deficit Spending
Winning the Peace Who Won the War? The Fed / Deficit Spending Past performance is no guarantee of future results. Source: Cypress Capital March 12, 2021 24
Slide 25: Who Won the War? Equity Enthusiasm
Winning the Peace Who Won the War? Equity Enthusiasm Past performance is no guarantee of future results. Source: JP Morgan; Cypress Capital March 26, 2021 25
Slide 26: Who Won the War? Insane Speculation-SPACTACULAR
Winning the Peace Who Won the War? Insane Speculation-SPACTACULAR Past performance is no guarantee of future results. Source: Bloomberg; https://www.ft.com/content/3258285a-00c2-445e-a318- 3e760c298698. A special purpose acquisition company (SPAC) is a company with no commercial operations that is f
Slide 27: Who Won the War? Fleas and Lice / Bitcoin and Tesla
Winning the Peace Who Won the War? Fleas and Lice / Bitcoin and Tesla Past performance is no guarantee of future results. Source: Bloomberg 27
Slide 28: Agenda
Agenda Who Won the War? • Who Wins the Peace? • Where to Invest for the Peace? 28
Slide 29: Who Wins the Peace? 1918 vs. 1945
Winning the Peace Who Wins the Peace? The Importance of Winning the Peace: 1918 vs. 1945 Past performance is no guarantee of future results. Source: The Winnipeg Evening Tribune, Nov 4, 1918 29
Slide 30: Who Wins the Peace? The Vaccine Army
Winning the Peace Who Wins the Peace? The Vaccine Army Past performance is no guarantee of future results. Source: Fundstrat; JP Morgan Guide to the Markets, 31 March 2021 30
Slide 31: Who Wins the Peace? The Demographic Pig Through the Python
Winning the Peace Who Wins the Peace? The Demographic Pig Through the Python Past performance is no guarantee of future results. Source: Fundstrat 31
Slide 32: Who Wins the Peace? Necessary Industries
Winning the Peace Who Wins the Peace? Necessary Industries Past performance is no guarantee of future results. Source: Fundstrat 32
Slide 33: Who Wins the Peace? Unlevered Personal Balance Sheets
Winning the Peace Who Wins the Peace? Unlevered Personal Balance Sheets Ready to Go Past performance is no guarantee of future results. Source: Bloomberg 33
Slide 34: Who Wins the Peace? Main Street Ability to Take Risk
Winning the Peace Who Wins the Peace? Main Street Economic Ability to take Risk Mortgage Burden Past performance is no guarantee of future results. Source: https://themortgagereports.com/61853/30-year-mortgage-rates- 34 chart
Slide 35: Agenda
Agenda Who Won the War? Who Wins the Peace? • Where to Invest for the Peace? 35
Slide 36: Where to Invest for the Peace? Homebuilders
Winning the Peace Where to Invest for the Peace? Homebuilders Past performance is no guarantee of future results. Source: Advisor Perspectives November 2019; Cypress Capital March 26, 36 2021
Slide 37: Where to Invest for the Peace? Class A Mall REITS
Winning the Peace Where to Invest for the Peace? Class A Mall REITS Past performance is no guarantee of future results. Source: Bloomberg 37
Slide 38: Where to Invest for the Peace? Banks
Winning the Peace Where to Invest for the Peace? Banks Past performance is no guarantee of future results. Source: Bloomberg; https://www.wsj.com/articles/the-pandemic-ignited-a- 38 housing-boombut-its-different-from-the-last-one-11615824558?mod=article_inline
Slide 39: Where to Invest for the Peace? Energy
Winning the Peace Where to Invest for the Peace? Energy Past performance is no guarantee of future results. Source: JP Morgan Guide to the Markets, 31 March 2021 39
Slide 40: Where to Invest for the Peace? Drug/biotech blue chips
Winning the Peace Where to Invest for the Peace? Drug/biotech blue chips NYSE Arca Pharmaceutical forward P/E relative to the S&P 500 Past performance is no guarantee of future results. Source: Factset 40
Slide 41: Where to Invest for the Peace? Dividends & Book Value
Winning the Peace Where to Invest for the Peace? Dividends & Book Value Past performance is no guarantee of future results. Source: Cypress, January 15, 2021 + March 12, 2021 41
Slide 42: Agenda
Agenda Who Won the War? Who Won the War? Where to Invest for the Peace? 42
Slide 43: Today's Agenda
Today’s Performance, Characteristics and Top 10 Holdings Agenda Cole Smead, CFA, Portfolio Manager Featured Stock: Merck & Co., Inc. (MRK) Tony A. Scherrer, CFA, Portfolio Manager Winning the Peace Bill Smead, Lead Portfolio Manager 43
Slide 44: Definitions
Definitions Basis point: A basis point is one hundredth of one percent, used chiefly in expressing differences of interest rates. Book Value: A company's common stock equity as it appears on a balance sheet, equal to total assets minus liabilities, preferred stock, and intangible assets such as good
Slide 45: Disclosures
Disclosures The information contained herein represents the opinion of Smead Capital Management and is not intended to be a forecast of future events, a guarantee of future results, nor investment advice. This does not constitute the solicitation of an offer to purchase or subscribe for any investme
Slide 46: Questions & Answers
Questions & Answers +44 (0)20.8819.6490 Sales Desk International +352.46.40.10.600 Shareholder Services 877.701.2883 Sales Desk US Smead Capital Management 2777 East Camelback Road, Suite 375 Phoenix, AZ 85016 info@smeadcap.com www.smeadcap.com
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