David Samra ’86 figures that he has scrutinized more than 10,000 companies throughout the world during his nearly 20 years in international investing. His mission: finding stocks that are trading at bargain prices relative to the underlying value of the companies they represent.
As lead manager of the Artisan International Value Fund, Samra practices a disciplined style of value investing – an approach made famous by Warren Buffett – that identifies stocks trading for less than their intrinsic value. These are stocks of companies that the market has undervalued for one reason or another, generally based on emotional or other factors that do not necessarily correspond with the company’s long-term fundamental health.
“Over time, I’ve learned what makes a good risk/reward profile and a bad risk/reward profile,” Samra says of plucking the gems from a sea of other stocks that deserve their low price.
Macro Meets Micro
Specializing by country but not industry, the Artisan International Value Fund can invest in virtually any type of company as long as it operates outside the United States.
“As generalists, we do have the challenge of understanding multiple business models,” says Samra. “But with that understanding comes the advantage of knowing how returns and risks can correlate across sectors and industries.”
His team starts from scratch in researching each new company tagged for investment.
“We have to learn how government, cultural and political systems operate and influence the business environment in countries where we invest. That’s in addition to studying aspects of the company itself, such as whether the management team is trustworthy and the product has promise,” explains the former Finance major, noting that combined macro- and microanalysis “is what keeps me interested.”
The objectives that Samra set upon launching the fund in 2002 call for it to hold between 40 and 60 stocks at time. The group should range across all major investment sectors and at least five countries, with a maximum 35 percent of the fund’s net assets invested in any one country at the time of investment and up to 20 percent of assets in emerging markets.
Meeting those objectives while generating a reasonable level of investment return is the principal task at hand for Samra and portfolio co-manager Daniel O’Keefe. Their record speaks for itself. Since inception, the fund has returned 14.7 percent on an average annualized basis (compared with 9.5 percent for the Lipper International Multi-Cap Value Funds Index during the same period). The Artisan International Value Fund has amassed about $8.5 billion in assets under management, including both mutual fund and separate account assets, and is closed to new investors.
Mutual fund research firm Morningstar has taken note, according its highest five-star rating to the fund and naming Samra the International Fund Manager of the Year for 2008. He was again among five nominees for the honor in 2011.
“Morningstar recognized through our return pattern that we were able to accomplish our objectives during a very challenging time,” Samra says of the recognition, which arrived as financial crisis in the United States rocked the global economy.
As you might guess, the work makes Samra an uber-frequent flier, with two to three weeks of travel outside the United States each quarter. Seoul and Tokyo were recent stops.
“It’s significant travel, but not always exciting travel,” he says, adding that his favorite worldwide destination is San Francisco, where he resides with his wife, Erica, and daughters Lily and Grace.