Our international deep value portfolio presents a compelling snapshot of global markets in transition during September 2025. The portfolio’s diverse geographic and sector composition continues to reflect the fundamental thesis of acquiring quality assets at substantial discounts to intrinsic value, while generating meaningful dividend income across volatile market conditions.
The average stock in the Perfect Stock Portfolio is up 7.87% for the month. Year to date the average gain in existing positions is over 30%. The average closed trade is up 195%.
The average yield is 3.31%
The portfolio has an average price to tangible book value is 82%
The portfolio’s performance this month illustrates the inherent tensions within global value investing. Asian holdings demonstrate the ongoing complexity of China’s economic trajectory and its ripple effects across the region, while European positions navigate persistent macroeconomic headwinds stemming from geopolitical uncertainties and monetary policy transitions.
Meanwhile, our commodity-linked and maritime transportation investments continue to benefit from structural supply-demand dynamics that have persisted longer than many market participants initially anticipated.
What emerges from this month’s analysis is a portfolio that embodies the patient capital approach characteristic of deep value investing. Many positions trade at significant discounts to both book value and historical multiples, while simultaneously generating dividend yields that substantially exceed broader market averages. This combination of downside protection through asset backing and income generation through dividends remains the cornerstone of our investment approach.
Regional Market Dynamics
The Asian Complex: Navigating Transformation
The Asian component of our portfolio, representing approximately 40% of total holdings, continues to exemplify the complexities of investing in markets undergoing fundamental structural changes. The region’s performance this month reflects both the opportunities and challenges inherent in value investing across diverse Asian economies.
Sun Hung Kai Properties (Ticker: SUHJY) remains emblematic of the Hong Kong property market’s ongoing adjustment. Trading around $9.91, the company sits well below its 52-week high of $13.44, yet recent developments suggest underlying resilience beneath the surface volatility. The company’s success in selling out apartment offerings on consecutive release days signals that underlying demand for quality Hong Kong residential properties persists despite broader market concerns. This disconnect between market sentiment and operational performance creates the type of opportunity that defines deep value investing.
The property developer’s financial position remains robust, with tangible assets significantly exceeding current market capitalization. This asset backing provides the downside protection that value investors seek, while the 6% dividend yield offers meaningful income during the wait for market recognition. The company’s position as Hong Kong’s largest property developer by revenue provides both scale advantages and diversification across the territory’s real estate markets.
China Yuchai International (Ticker: CYD) presents perhaps the most dynamic story within our Asian holdings. The company’s stock price has experienced remarkable volatility, surging over 80% in a two-week period before settling in the $20-23 range. This price action reflects the market’s evolving assessment of China’s industrial recovery and the company’s positioning within the commercial vehicle ecosystem.
The fundamental developments underlying this price movement appear substantive. The company’s first-half 2025 results demonstrated robust growth across key metrics, while strategic initiatives including expansion into the Mexican bus market and casting product exports to Germany suggest successful geographic diversification. The raising of price targets by research analysts to $28 from $22 reflects growing confidence in the company’s long-term positioning, despite the inherent volatility associated with China-focused investments.
Yuchai’s cash-rich balance sheet and established relationships with original equipment manufacturers provide the stability that value investors prize, while the company’s investments in hybrid engine technology position it favorably within China’s evolving automotive landscape. The company’s 8,930 employees and vertically integrated operations reflect the scale and operational depth that characterize successful industrial franchises.
Kyocera Corporation (KYOCY) and Subaru Corporation (Ticker: FUJHY) represent the Japanese component of our Asian exposure, offering exposure to the country’s industrial and automotive sectors, respectively. Kyocera’s diversified technology platform spans cutting tools, industrial automation, and renewable energy applications, providing multiple avenues for growth as global industrial activity evolves. The company’s global customer base and technological capabilities position it well within ongoing trends toward industrial digitization and automation.
Subaru’s recent upgrade to a buy rating by research analysts reflects growing optimism about the company’s earnings trajectory. With annual production of approximately one million vehicles and two-thirds of sales concentrated in the United States market, Subaru offers a compelling combination of operational efficiency and geographic diversification. The company’s focus on all-wheel drive technology and its reputation for reliability continue to resonate with consumers, while strategic investments in hybrid systems and partnerships with government entities suggest forward-looking management.
European Holdings: Navigating Complexity
The European component of our portfolio, representing roughly 35% of holdings, reflects the continent’s ongoing economic and political transitions. These positions demonstrate both the opportunities available in European markets and the challenges associated with investing across diverse regulatory and economic environments.
A.P. Møller-Mærsk (Ticker: AMKBY) exemplifies the transformation occurring within global logistics and transportation. Trading around $10.69 after reaching a 52-week high of $11.50, the Danish shipping and logistics giant continues to benefit from the structural changes in global supply chains that emerged following the pandemic. The company’s integrated approach to transportation and logistics services positions it advantageously as global trade patterns continue to evolve.
The company’s 7.44% dividend yield reflects both the cash generation capabilities of the shipping industry during this cycle and management’s commitment to returning capital to shareholders. Technical analysis suggests potential for further appreciation, with analysts projecting possible 19% upside over the coming quarters. This combination of immediate income through dividends and potential capital appreciation embodies the total return approach that characterizes successful value investing.
The Swatch Group (Ticker: SWGAY) provides exposure to European luxury goods manufacturing, with particular strength in Swiss watchmaking traditions. The company’s portfolio of brands, including Omega, Tissot, and Breguet, spans multiple price points and market segments. Approximately three-quarters of revenue derives from higher-end brands that remain largely insulated from smartwatch competition, while the company’s innovation in lower-price segments has helped stabilize market share.
The geographic distribution of demand presents both opportunities and risks, with roughly 50% of sales coming from Asian customers, particularly in China. This exposure to Chinese luxury consumption patterns creates sensitivity to Chinese economic conditions but also positions the company to benefit from any recovery in Chinese consumer spending. The company’s employment of over 33,000 people, half in Switzerland, reflects both its scale and commitment to traditional Swiss manufacturing excellence.
Porsche Automobile Holding SE (Ticker: POAHY) represents our exposure to German automotive manufacturing, though through a holding company structure that provides indirect exposure to the broader Volkswagen Group. Trading at $4.12 within a 52-week range of $3.30 to $4.71, the security reflects the ongoing challenges facing traditional European automotive manufacturers as the industry transitions toward electric vehicles.
Recent technical indicators have turned negative, suggesting near-term price pressure may persist. However, the 4.83% dividend yield provides income while shareholders await clearer direction from the broader automotive sector transition. The company’s connection to the Volkswagen Group provides exposure to one of Europe’s largest automotive franchises, though this connection also creates exposure to the regulatory and competitive challenges facing traditional automotive manufacturers.
Bolloré SE (Ticker: BOIVF) represents our most diversified European holding, with operations spanning transportation and logistics, communications, oil logistics, and electricity storage systems. Founded in 1822, the company’s longevity reflects its ability to adapt to changing economic conditions over nearly two centuries of operation. The company’s French headquarters and European operational focus provide geographic diversification within our European holdings.
Maritime Transportation: Structural Advantages
Our shipping investments continue to demonstrate the benefits of investing in industries experiencing favorable supply-demand dynamics. These positions, while subject to cyclical volatility, benefit from structural factors that appear likely to persist over extended periods.
Scorpio Tankers (Ticker: STNG) trades around $47.05, well within its 52-week range of $30.63 to $75.69, reflecting the inherent volatility of shipping investments. However, the underlying fundamentals supporting tanker shipping remain compelling. Global refining capacity additions and the ongoing reconfiguration of energy trade flows following geopolitical developments continue to support tanker demand, while new vessel construction remains constrained by shipyard capacity limitations and environmental regulations.
The company’s position within the product tanker segment provides exposure to refined petroleum product transportation, which tends to be less volatile than crude oil transportation. Analyst consensus suggests significant upside potential, with price targets averaging $66.33 representing substantial appreciation from current levels. This analyst optimism reflects both current market conditions and expectations for continued strength in tanker fundamentals.
Genco Shipping & Trading (Ticker: GNK) operates within the dry bulk shipping segment, transporting commodities including iron ore, coal, and grain. The company has maintained dividend payments for 24 consecutive quarters, with the most recent payment of $0.15 per share reflecting management’s confidence in cash generation capabilities. The company’s nearly net cash balance sheet provides financial flexibility rare among shipping companies, while its diversified fleet composition offers exposure to multiple commodity trading routes.
Recent earnings results showed some volatility, with the company reporting a loss of $0.14 per share for the most recent quarter. However, this performance met analyst expectations, suggesting that current challenges were anticipated and are reflected in current valuations. Forward-looking analyst expectations call for a return to profitability, with estimated earnings of $0.18 per share projected for the coming quarter.
The dry bulk shipping industry continues to benefit from global commodity demand, particularly from emerging markets, while vessel supply growth remains constrained. The average age of the global dry bulk fleet suggests increasing scrapping rates in coming years, which should support vessel utilization rates and day rates for well-positioned operators like Genco.
Energy and Commodities: Navigating Transition
Our energy and commodity investments reflect both traditional energy demand patterns and the ongoing global energy transition. These positions provide portfolio diversification while generating meaningful cash flows during a period of elevated energy prices and supply constraints.
Peabody Energy (Ticker: BTU) represents our exposure to thermal and metallurgical coal markets. While coal faces long-term challenges from renewable energy adoption, near-term demand remains robust due to global energy security concerns and the time required for energy transition implementation. The company’s position as the largest US coal producer provides scale advantages and geographic diversification across multiple coal-producing regions.
Global metallurgical coal demand for steel production continues to support pricing, while thermal coal demand has proven more resilient than many analysts anticipated. The company’s operational efficiency improvements and disciplined capital allocation reflect management’s adaptation to the evolving energy landscape.
Africa Oil Corporation (Ticker: AOIFF) provides exposure to African energy development through a Canadian-listed structure. Trading around $1.25-$1.29, the company has attracted analyst attention with average price targets of $2.37, representing potential upside of over 80%. The company’s recent dividend payment of $0.0371 per share demonstrates management’s commitment to returning capital to shareholders while pursuing development opportunities.
African energy development faces unique challenges including political risk, infrastructure constraints, and regulatory complexity. However, the continent’s substantial hydrocarbon resources and growing energy demand create opportunities for well-positioned companies. The company’s Canadian listing and governance structure provide some mitigation of direct political risks while maintaining exposure to African energy development potential.
Industrial and Technology: Quality Franchises
Several portfolio holdings represent exposure to established industrial and technology franchises that have demonstrated resilience across economic cycles while trading at attractive valuations.
Johnson Outdoors (Ticker: JOUT) has reported strong third-quarter performance, reflecting robust demand for outdoor recreation equipment. The company’s diversified product portfolio spans fishing, camping, watercraft, and diving equipment, providing multiple channels for growth as outdoor recreation participation continues to expand. Recent quarterly results have exceeded expectations, while the company’s consistent dividend payments reflect steady cash generation capabilities.
The outdoor recreation industry has experienced sustained growth following pandemic-related lifestyle changes, with many consumers maintaining elevated participation in outdoor activities. Johnson Outdoors’ established brand portfolio and distribution network position it well to benefit from these trends, while its focus on innovation and product development supports market share maintenance across competitive categories.
Imkta (Ticker: IMKTA) and Centrus Energy (Ticker: CEPU) represent more specialized industrial exposures within the portfolio. These positions reflect the value investing principle of investing in companies with unique assets or market positions that trade below intrinsic value due to temporary factors or market neglect.
Market Environment and Portfolio Implications
The September 2025 market environment continues to present both challenges and opportunities for deep value investors. Global central bank policies remain in transition, with the Federal Reserve appearing positioned to reduce interest rates for the first time in the current cycle. This potential policy shift could benefit value-oriented investments, as lower rates typically support higher valuations for dividend-paying securities and companies with strong asset bases.
Currency movements continue to influence international investment returns, with US dollar strength pressuring returns from international holdings when measured in dollar terms. However, this currency headwind could reverse if Federal Reserve policy becomes more accommodative relative to other central banks, potentially providing a tailwind for international investments in coming quarters.
Geopolitical tensions persist across multiple regions, creating both risks and opportunities for portfolio companies. Shipping companies continue to benefit from longer shipping routes and supply chain disruptions, while energy companies face both elevated prices from supply constraints and uncertainty about long-term demand patterns. Companies with geographic diversification and strong balance sheets appear best positioned to navigate this environment.
The portfolio’s emphasis on dividend-paying securities with strong asset backing provides some insulation from market volatility while generating meaningful income. Average dividend yields across portfolio holdings substantially exceed broader market averages, providing tangible returns while awaiting potential capital appreciation. This income component becomes particularly valuable during periods of market uncertainty.
Valuation metrics across the portfolio remain attractive relative to historical averages and current market conditions. Many holdings trade below book value while generating positive cash flows and maintaining dividend payments. This combination suggests that current market prices may not fully reflect underlying asset values or earning power.
The portfolio’s sector diversification across shipping, energy, industrial, luxury goods, real estate, and technology provides exposure to multiple economic themes while limiting concentration risk. Geographic diversification across Asia, Europe, and North America similarly reduces exposure to region-specific risks while capturing opportunities across diverse markets.
Outlook and Considerations
Looking ahead, several themes appear likely to influence portfolio performance. The ongoing evolution of China’s economy and policy environment will significantly impact Asian holdings, with both risks and opportunities depending on policy implementation effectiveness. European positions will continue to navigate the continent’s economic and political landscape, with particular sensitivity to energy costs and regulatory developments.
The shipping complex appears well-positioned to benefit from continuing supply-demand imbalances, though cyclical volatility remains inherent in these investments. Energy holdings face both near-term support from elevated prices and long-term uncertainty from energy transition dynamics.
The portfolio’s deep value orientation positions it to benefit from any broad rotation toward value investing styles, while the strong dividend yields provide downside protection and immediate returns independent of market sentiment. The combination of attractive valuations, strong asset backing, and meaningful dividend income continues to define the portfolio’s investment proposition.
Risk management remains paramount, with attention to position sizing, geographic diversification, and sector allocation. The portfolio’s emphasis on companies with strong balance sheets and established market positions provides some protection against adverse developments, while the diversified structure limits exposure to any single risk factor. The September 2025 portfolio review reveals a collection of investments that embody classic deep value characteristics while providing exposure to diverse global markets and economic themes. The patient capital approach inherent in value investing continues to guide portfolio positioning, with emphasis on fundamental analysis, attractive valuations, and long-term value creation potential.
