Sapiens Stock Valuation: Is it Undervalued or Overvalued?

Sapiens International stock has surged 65.2% this year, with a 142.7% increase in the past three years. The stock is currently undervalued based on two common valuation checks, but has a value score of 2 out of 6. The Discounted Cash Flow (DCF) model estimates an intrinsic fair value of $30.59 per share, suggesting the stock is 40.8% overvalued.

The Oakmark International Small-Cap Fund (Class I Shares) underperformed the benchmark, the MSCI World ex USA Small Cap Index (net), for the quarter. At the sector level, consumer discretionary and financials were the largest contributors to performance, while health care and industrials detracted from performance. Geographically, the top three region allocations are 62.3% in Europe ex U.K., 10.7% in the U.K. and 8.9% in Asia ex Japan. For the quarter, China and Sweden were top contributors to performance. Germany and the U.K. were top detractors from performance. Emerging markets accounted for 12.9% of the portfolio. Third-quarter highlights include Wynn Macau (OTCPK:WYNMF) as the top contributor and Amplifon (OTCPK:AMFPF) as the top detractor Oakmark International Small Cap Fund Q3 2025 Commentary^[1].

Wynn Macau was the top contributor during the quarter. The Hong Kong-based casino operator saw its stock price rise despite delivering underwhelming second-quarter 2025 results. This performance was supported by a strengthening Macau market in recent months, which has benefited Wynn as one of just six licensed operators in the city — and among the most efficient. We are encouraged by the company's near-term plans to introduce updated rooms and a revamped Chairman's Club, which should bolster its position in the premium segment. Wynn remains well-positioned for continued outperformance Oakmark International Small Cap Fund Q3 2025 Commentary^[1].

Amplifon was the top detractor during the quarter. The Italian hearing aid company's stock price plunged after first half results revealed that revenue grew more slowly than expected, and the company reduced its fiscal year guidance. While this news was disappointing, we believe this shortfall is due to market and cyclical issues in the U.S. and several European markets rather than a structural slowing of hearing aid demand. We appreciate the front-footed management team which launched a new cost program to offset the impact from the revenue shortfall. We also believe that Amplifon's strong market position and ability to earn attractive profits remains intact. As such, Amplifon remains an attractive holding in our view Oakmark International Small Cap Fund Q3 2025 Commentary^[1].

Portfolio Activity While the quarter's performance was disappointing, we took advantage of market opportunities to increase positions in stocks where share prices diverged from our view of intrinsic value. Some examples of this include Amplifon, Azelis (OTCPK:AZLGF), Bakkafrost (OTCPK:BKFKF), and Valmet (OTCPK:VOYJF). Significant research activity at the firm led to six new positions being added to the Fund while three were exited. Biprogy and Sapiens were sold because they approached our estimate of intrinsic value, while we exited Hakuhodo (OTCPK:HKUOY) to redeploy assets into more attractive opportunities Oakmark International Small Cap Fund Q3 2025 Commentary^[1].

New purchases Alten (OTCPK:ABLGF) is one of the world's largest engineering service providers, partnering with companies to help them design, execute, and manage project-based engineering and IT services. Over time, R&D intensity is rising as a percentage of GDP as corporations invest in new technologies and capabilities to differentiate their products, accelerate the speed of product development, and comply with increasing regulation. To help manage this cost, corporations are increasingly outsourcing their R&D spending, making outsourced R&D services a GDP+ growth business through-cycle. Alten is one of a handful of companies in this space that is considered a global tier-1 service provider, which helps them tightly embed with customers in very sticky relationships. The business itself is asset light and very cash generative and is still run by its founder, Simon Azoulay, who we consider a shrewd capital allocator into bolt-on M&A that enhances the company's capabilities, customer list, and geographic reach. Alten's stock price has contracted recently as the engineering services sector undergoes a cyclical downturn made worse by tariff uncertainty. We expect business fundamentals to eventually recover, driving an improvement in growth, profitability, and valuation, which is at historic lows Oakmark International Small Cap Fund Q3 2025 Commentary^[1].

Aumovio (OTC:AMVOY) spun out of Continental (OTCPK:CTTAF) in September 2025 and now develops, manufactures and distributes auto components and technology systems as a standalone company. Even without the backing of Continental's tires business, there's a lot to like about Aumovio. It built up strong positions in structurally attractive markets over the years under Continental. Aumovio operates through several segments that expose it to a compelling range of auto megatrends, like active safety, autonomous driving and software. Those trends have long teased upside, and we believe recent restructuring, portfolio optimization and a focus on returns will help Aumovio realize its potential. CEO Philipp von Hirschheydt and his management team deserve credit for that improved execution, and now that he's armed with a cash-rich balance sheet following the spinoff, we expect his knack for underpromising and overdelivering to continue. We were excited to open a position in Aumovio at a price we believe is well below its intrinsic value Oakmark International Small Cap Fund Q3 2025 Commentary^[1].

Hamamatsu Photonics (OTCPK:HPHTF) is Japan's premier photon specialist, supplying detectors and light sources that enable complex machines to see what the human eye cannot and detect nanometer-scale defects. Hamamatsu is widely regarded as the preferred industry supplier and commands leading market share position across its major product categories. Moreover, the company's partnerships with its customers often begins in the concept stage of development, which has led to sticky, long-term relationships. In addition, we appreciate management's commitment to reinforcing its competitive moat through consistent reinvestment in research development, and believe it is poised to see an inflection point in its share price as cyclical headwinds subside. These headwinds provided us the opportunity to initiate a position in a dominant company with improving shareholder returns that is trading at a significant discount to our estimate of intrinsic value Oakmark International Small Cap Fund Q3 2025 Commentary^[1].

JEOL (OTCPK:JELLF) manufactures, develops, and sells a range of scientific and industrial equipment. JEOL's roots lie in its scientific instruments business, which sells tools like electron microscopes to academic institutions and food, chemical, and semiconductor customers, among others. Building and servicing this equipment requires significant scientific know-how, resulting in high barriers to entry and thus oligopolistic market structures. JEOL subsequently leveraged its electron beam technology to manufacture mask writing equipment, which fulfills an integral step in chip manufacturing that tethers the company to the world's leading-edge foundries. JEOL services mask writers for years after selling them, creating a recurring revenue stream that helps smooth out the volatility of equipment sales. Additionally, management has intensified its focus on improving profitability in the scientific instruments business, where margins meaningfully lag global peers. In sum, we believe we are buying two good franchises – scientific instruments and mask writers – for the price of one Oakmark International Small Cap Fund Q3 2025 Commentary^[1].

Kansai Paint (OTCPK:KSANF) is one of the two market leaders in paint and coatings in Japan. The company's products are used primarily for automobiles, construction, and ships along with bridges and residential housing. We have owned Kansai on and off over the past 15 years. We most recently sold out of the company in early 2024 as the share price reached our estimate of intrinsic value. Since then, the share price has declined more than 20% due to weak auto production and a weak decorative market in India as well as a de-rating of most global paint companies. Since then, management has focused on shifting emphasis to niches within the paint market, such as construction chemicals and wood coating while focusing less on retail. With the shares priced at more attractive levels, we reinitiated a position in the company. After speaking with management, we continue to believe that there is ample opportunity to reduce costs and improve profitability. Additionally, we believe many of the negatives of the Indian decorative market are now priced into the shares. Finally, we think management continues to allocate capital well and plans to return 100% of free cash flow through dividends and share repurchases Oakmark International Small Cap Fund Q3 2025 Commentary^[1].

Robertet (OTCPK:RBTEF) is a global leader in the production of flavors and fragrances and a near pure-play on the natural ingredients sub-segment. The company supplies premium components to high-end luxury brands such as Hermès, Chanel, and Aesop. Although these inputs represent a small portion of end products' cost of goods sold, they are critical to the consumer experience, defining the signature scent or taste and enabling Robertet to command premium pricing. Many of these scents and flavors underpin popular heritage products, leading to long-lived, recurring revenues. Despite its strong positioning, the stock trades at a discount to our estimate of intrinsic value due to cyclical headwinds and lingering investor overhang, which we believe are temporary. We appreciate Robertet's shareholder-aligned management team and believe their renewed efforts to expand, internationalize, and modernize the business will lead to significant value creation over the long term Oakmark International Small Cap Fund Q3 2025 Commentary^[1].