This month, we screen for attractive “bond replacement” investment candidates using new holdings of the Clipper Fund (CFMIX), managed by Chris Davis and Danton Goei.

We have selected the stocks that this fund reported purchasing in the second quarter of 2016 (the latest period for which data was available) and have limited the list based on two criteria:

  1. Stocks listed represented more than 1% of the portfolio’s value
  2. Stocks listed had been bought by the fund in the reported quarter

These conditions were to screen for the stocks in which the managers had demonstrated the most confidence (by portfolio weight) and about which they had made an active decision to invest. As we explain in our video introduction to “Bond Replacement” investments, we are using these portfolio managers’ actions as an indication of undervaluation.

Morningstar’s report on this fund may be found here, and a prospectus for the fund may be found here. We chose this fund on the basis of its reputation for a solid value investing process, but since the managers tend to hold concentrated positions, there are only eight names that met the criteria above. One of these names, Safran SA (SAFRY) – the Boeing / Lockheed Martin of Europe – has its primary listing in Europe and only trades on the Pink Sheets here in the U.S., so does not have any listed options. This cuts the universe down to seven names for this month.

Please reach out if you have any questions about this spreadsheet!