Should You Still Consider Investing in Komatsu (KMTUY)?

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Harding Loevner, an investment management firm, published its “International Equity Fund” first-quarter 2022 investor letter – a copy of which can be downloaded here. The International Equity Composite fell 10.2% in the quarter gross of fees, well beyond the 5.3% decline of the MSCI All Country World ex-US Index. In a quarter during which investors fled from richly priced, high-quality growth companies, it should come as no surprise that, whether viewed through the lens of sector or geographic attribution, Harding Loevner’s portfolio underperformed within most sectors and regions. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Harding Loevner International Equity Fund mentioned Komatsu Ltd. (NYSE:KMTUY) and explained its insights for the company. Founded in 1921, Komatsu Ltd. (NYSE:KMTUY) is a Tokyo, Japan-based construction, mining, forestry, and military equipment manufacturer with a $21.6 billion market capitalization. Komatsu Ltd. (NYSE:KMTUY) delivered a -2.22% return since the beginning of the year, while its 12-month returns are down by -10.30%. The stock closed at $22.87 per share on June 21, 2022.

Here is what Harding Loevner International Equity Fund has to say about Komatsu Ltd. (NYSE:KMTUY) in its Q1 2022 investor letter: 

“We continue to root out the potential knock-on effects of the Ukraine crisis on our portfolio companies. Harrowing as it was to mark our two Russian positions down to zero, the erasure of Russia and Ukraine from the global economy was but a small shock to the system of global trade since their combined contribution to global GDP is less than 2%. The effect on individual companies’ sales can nevertheless be substantial. Roughly 6% of its sales in Russia in its recent fiscal year, Japanese construction and mining equipment manufacturer Komatsu (OTCPK:KMTUY); we expect their Russian sales to decline markedly this year. European carmakers that had been sourcing parts from Ukraine were forced to close some assembly lines for weeks until they could procure alternative inputs, which may indirectly depress demand for Infineon’s automotive power chips and sensors.”

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Our calculations show that Komatsu Ltd. (NYSE:KMTUY) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Komatsu Ltd. (NYSE:KMTUY) was in 2 hedge fund portfolios at the end of the first quarter of 2022, compared to 2 funds in the previous quarter. Komatsu Ltd. (NYSE:KMTUY) delivered a -5.10% return in the past 3 months.

In September 2021, we also shared another hedge fund’s views on Komatsu Ltd. (NYSE:KMTUY) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.