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Monthly Report International Fund April 2023


International Fund April Monthly Report

April was another positive month for the Fund and the wider market. The unit price of the Forager International Shares Fund rose 2.0%, slightly underperforming a 2.6% return from the index. While most portfolio investments will report results in May, those that were out in April were good.

Meta Platforms (Nasdaq:META) released its first-quarter results and continued its share price run for the calendar year, up 100% since 31 December 2022. Advertising revenue from the company’s social media platforms increased 4% compared to the prior year, after three consecutive quarters of revenue declines. Users are sharing Reels twice as much as they were six months ago and newly introduced AI recommendation tools have driven a whopping 24% increase in time spent on Instagram. That’s equal parts scary and impressive. Meta’s margins are still lower than they were a year ago but there was a nice improvement versus the last quarter of 2022. Cost guidance for 2023 was lowered again.

Online travel agency (SWX:LMN) has been on a similar trajectory, though on a smaller scale. After Swiss legal troubles, a board and management sweep and some underwhelming fourth-quarter results, we were running out of patience for this business. The rest of the market was too. But there was some light at the end of the tunnel with the company’s full-year result this month. 2022 was a lackluster year for the business, with revenues still 10% below 2019 levels and margins much worse. But trading for the first quarter of 2023 looks promising. Sales were 10% above the same period in 2019 and while margins aren’t quite there yet, they’re definitely getting better. We need both of these trends to continue throughout the year.

UK stalwart Tesco (LSE:TSCO) continued to deliver on its promises with the release of its full-year results. Retail sales of £56bn were up 5% on the prior year as the grocery retailer maintained its market share against competitors. The company generated £2.1bn of free cash flow in its retail operations, most of which was returned to shareholders through a combination of dividends and share buybacks. Exactly what we want to see from this business.

Sony (TSE:6758) finished up 7% for the month. Investors were pleased that the UK antitrust regulator blocked Microsoft’s (Nasdaq:MSFT) acquisition of Activision Blizzard (Nasdaq:ATVI), which was seen as a potential threat to Sony. The company also reported a solid set of March-quarter results and provided conservative guidance for the upcoming fiscal year. The PlayStation 5 continued to sell well. Sony shipped a record number of units in the quarter and the PS5 is outselling the new Xbox three to one. The company continues to trade at an attractive valuation relative to the quality of its underlying businesses.

GasLog Partners (NYSE:GLOP) received an updated bid from its major shareholder GasLog Ltd (NYSE:GLOG-A) (30% owner) to take the company private for $8.65 per share. We first bought the stock just over a year ago at $4.60 and increased our investment substantially in the second half of 2022. It’s not the most appealing price—just four times last year’s earnings—but with Gaslog’s vice-like grip on the partnership, the low likelihood of a competing bid and the strong share price performance over the past six months, we have now sold the investment for a tidy profit.