For the past decade, the US stock market has been the only game in town. However, valuations in the S&P 500 have stretched to levels that make traditional value investors uncomfortable. As we review the institutional activity from the end of 2025, it becomes clear that firms like Tweedy Browne are increasingly looking across the Atlantic (and Pacific) for opportunities.
The "Home Country Bias" often blinds retail investors to the fact that some of the world's best industrial and pharmaceutical companies are listed in Europe and Asia, trading at half the valuation of their American peers. The latest data suggests a continued rotation out of expensive US large-caps and into depressed foreign markets.
The "Price to Value" Discrepancy
The core of the tweedy browne q4 2025 13f holdings reveals a deep commitment to the "intrinsic value" methodology. While US tech stocks trade at 30x or 40x earnings, Tweedy Browne is finding multinational giants in Germany, Switzerland, and the UK trading at 10x or 12x earnings.
This arbitrage is massive. You are essentially buying the same quality of earnings—often from companies that sell globally—but paying a massive discount simply because the company's headquarters isn't in Silicon Valley or New York. This is classic "global value" investing.
🌍 GEOGRAPHIC DIVERSIFICATION TARGETS
1. European Industrials: Manufacturing powerhouses that have been beaten down by energy fears but have robust order books.
2. Swiss Pharma: Defensive healthcare plays with strong dividends and currency stability (the Swiss Franc hedge).
3. UK Financials: Banks and insurers trading below book value despite strong cash generation.
The Role of Currency Hedging
One often-overlooked aspect of Tweedy Browne’s strategy is how they handle currency risk. Unlike many global funds that leave currency exposure naked, they have historically hedged their foreign currency exposure back to the US dollar when the dollar is weak, or left it unhedged when the dollar is strong.
By analyzing their current positioning, investors can get a subtle read on their outlook for the US Dollar Index (DXY). If they are heavily buying foreign assets, they may be betting on a long-term mean reversion where international equities finally catch up to US performance.