This analysis summarizes the strategic investment decisions made by the Oakmark Global Fund, highlighting the rationale behind its recent acquisitions. The fund strategically leveraged market fluctuations, particularly downturns, to acquire shares in promising companies. The portfolio additions include Dassault Systèmes, a prominent software firm, Hexagon, a company expected to show improved financial metrics, and Targa, an entity acquired at a favorable valuation. Additionally, Salesforce, recognized for its business transformation, was a key purchase. These investments reflect a meticulous approach to identifying value and potential for long-term growth.
Strategic Acquisitions Amidst Market Fluctuations
The Oakmark Global Fund's latest commentary for Q3 2025 details several calculated investment moves. One notable acquisition was Dassault Systèmes, a French software innovator specializing in virtual twin technology. Despite its robust foundational strength, the company's stock experienced a significant drop, nearly 40% from its peak, due to cyclical market downturns. This presented a prime opportunity for the fund to acquire shares at an attractive valuation, betting on its underlying resilience and future growth prospects in an essential technological domain. The fund's strategy involves identifying such moments where market sentiment temporarily undervalues fundamentally sound businesses, allowing for strategic entry points.
Another significant addition to the portfolio is Hexagon, a company where the fund foresees a substantial improvement in its return on capital employed (ROCE), cash flow generation, and ultimately, its share price over an extended period. This investment underscores a belief in Hexagon's operational efficiency and its capacity to enhance shareholder value through sustained financial performance. Furthermore, the fund acquired shares in Targa at a considerable discount relative to its industry counterparts. This decision was driven by an analysis of Targa's normalized earnings power and a thorough estimation of its intrinsic value, indicating a strong belief in the company's long-term worth despite its current market pricing. These selective purchases highlight a disciplined approach to value investing, aiming to capture growth potential from well-managed, robust businesses during opportune market conditions.
Identifying Growth and Value in Key Industries
The Oakmark Global Fund's investment philosophy extends to recognizing companies undergoing positive transformations and those with strong inherent value. Salesforce was identified as an exemplary business currently transitioning into a more profitable and shareholder-centric entity. This strategic vision for Salesforce underlines the fund's commitment to investing in companies that not only possess strong market positions but are also actively enhancing their operational models to deliver greater value to their investors. The inclusion of Salesforce reflects a forward-looking perspective, targeting businesses that are adapting to market dynamics and repositioning themselves for sustained financial success and increased profitability.
The overarching strategy behind these new purchases revolves around a deep-seated belief in value investing and rigorous fundamental research. The fund aims to invest in companies trading below their true economic worth, guided by the conviction that market prices will eventually align with intrinsic values. This approach requires a comprehensive understanding of each company's business model, competitive advantages, and management quality. By focusing on firms like Dassault Systèmes, Hexagon, Targa, and Salesforce, the Oakmark Global Fund demonstrates a consistent and analytical method for portfolio construction, designed to navigate market complexities and capitalize on opportunities that promise long-term capital appreciation. The emphasis is on acquiring stakes in businesses that are not only leaders in their respective fields but also show clear pathways to improved financial health and shareholder returns, ensuring a robust and growth-oriented portfolio.