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Focused Investor LLC was founded in 2006 and has since then grown its portfolio to $2.035 billion on the following investment philosophy:

We concentrate in our best ideas

We insist on a margin of safety (20-40%)

We invest for the long-term

We only invest in businesses we understand

We eat our own cooking

Pretty simple right? Below is a look at Focused Investor LLC's best ideas and/or portfolio as of 3/31/13.


The only new holding in the portfolio, at the end of the first quarter, was a $43 million investment in Aetna (AET). Even with not knowing exactly when the fund made this purchase, we can assume it has already been profitable. Shares are up 28.97% year to date and trade near their 52 week high of $59.71.

The only other two purchases were a small 1% increase of Focused Investors' IBM (IBM) holdings and a 9% increase in the fund's position in Microsoft (MSFT). At the end of March, IBM was the fifth largest position in the portfolio, or $109.348 million. Microsoft was, at the end of the first quarter, the sixth largest position in the portfolio and worth $107 million.


Other than a few 1-2% share sell-offs in Pepsico (PEP), Goldman Sachs (GS) Diageo (DEO), Becton Dickinson (BDX) and Zimmer Holdings (ZMH), the only other significant sell was a 23% cut in Focus's holdings of Nike (NKE). Nike shares are up 25.78% YTD and trade at their 52 week high of $64.65 per share.

Top 4 Holdings

Wal-Mart (WMT), McDonald's (MCD), Pepsico (PEP) and American Express (AXP) continued to hold the top spots of the portfolio throughout the first quarter. Investments in these companies were worth the following on 3/31/13:

  • WMT - 8% of the portfolio - $162.9 million
  • MCD - 7% of the portfolio - $140 million
  • PEP - 7% of the portfolio - $137 million
  • AXP - 6% of the portfolio - $123.8 million

Bottom Line

The success of Focus Investor LLC is no surprise and many investors can learn a lot from the holdings as this funds concentration on only a few ideas helps make identifying the portfolio's moves a lot easer. As a screen for investment ideas, Microsoft and Aetna stand out with Nike being the only holding with a significant sell. Here is a look at Focused Investor's complete portfolio:

(click to enlarge)

Source: Portfolio Review: Focused Investor LLC