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This article is part of a series that provides an ongoing analysis of the changes made to Lou Simpson's U.S. stock portfolio on a quarterly basis. It is based on Simpson's regulatory 13F Form filed on 11/14/2013. Please visit our Tracking Lou Simpson's SQL Advisors Portfolio series to get an idea of his investment philosophy and the fund's moves in Q2 2013.

This quarter, Simpson's U.S. long portfolio increased around 10.5% from $1.69B to $1.87B. The number of holdings in the portfolio decreased from 15 to 13: Cenovus Energy and Fiserv Inc., two relatively smaller positions (less than 5% of the U.S. long portfolio each) were eliminated and no new positions were added. The top five holdings represent more than 50% of the U.S. long assets and the portfolio became even more concentrated in the quarter. The largest holding is United Parcel Service which was established last quarter and increased substantially this quarter.

Stake Disposals:

Cenovus Energy (NYSE:CVE): CVE was a 4.91% of the U.S. long portfolio position that was eliminated this quarter at prices between $29 and $32.50. It was marginally decreased last quarter at prices between $28.50 and $32. The stock currently trades at $30.43. The position has been in the portfolio since Q4 2011 and the stake elimination indicates a clear bearish bias.

Fiserv Inc. (NASDAQ:FISV): FISV was built-up over several quarters to a very large 10.71% of the U.S. long portfolio position as of Q3 2012. Since then, the position was reduced over several quarters. Last quarter, the stake was reduced by more than half to a 2.84% of the U.S. long portfolio position at prices between $85.50 and $91.50. The position was eliminated this quarter at prices between $86.85 and $103. The stock currently trades above those ranges at $107. The stake elimination indicates a clear bearish bias.

New Stakes:

None.

Stake Decreases:

Moody's Corp (NYSE:MCO): MCO is a 7.55% of the U.S. long portfolio stake. The position was first established in Q4 2012 at prices between $44 and $51.50. In Q1 2013, the stake was roughly doubled at prices between $43.30 and $55.50. The stock currently trades well above those ranges at around $74. The position was trimmed slightly in the last two quarters. Lou Simpson is very bullish on MCO.

Valeant Pharmaceuticals (NYSE:VRX): VRX position has been increased by ~50% since Q4 2011. The stake currently stands at 9.27% of the U.S. long portfolio. The last two quarters saw an insignificantly small stake reduction. Lou Simpson has large gains on this position and is continuing to hold on.

Stake Increases:

United Parcel Service (NYSE:UPS): UPS was a brand new 7.85% of the U.S. long portfolio stake established last quarter at prices between $82.30 and $89. It was increased by ~53% this quarter at prices between $85 and $92. The stock currently trades outside those ranges at around $100. It is Simpson's largest 13F position currently at 10.74% of the U.S. long portfolio. The large stake build-up over the last two quarters indicates a clear bullish bias.

Wells Fargo (NYSE:WFC): WFC is a 9.59% of the U.S. long portfolio stake that was consistently built-up since Q4 2011. This quarter, the position was increased by ~20% at prices between $41 and $45. The stock currently trades near the middle of that range at $42.63. The aggressive buying indicates a clear bullish bias.

Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B): BRK is Simpson's second largest position at 10.13% of the portfolio. It was a 9.19% position in the Q4 2011 13F filing. The stake was increased by roughly 40% in Q1 2012 at prices between $76 and $82. The position was further increased in the next several quarters although last quarter saw a slight trimming. This quarter, the position was marginally increased at prices between $111 and $119. Lou Simpson continues to be very bullish on Berkshire Hathaway stock. The stock currently trades at $115, well above Simpson's average cost-basis.

DirecTV (NASDAQ:DTV): DTV position has been increased by more than double since Q4 2011. It now accounts for 9.37% of the U.S. long portfolio. The stake was increased marginally in the last two quarters at prices between $54 and $65.50. The stock currently trades at $64. The large position size and the stake build-up suggest a clear bullish bias.

Oracle Corporation (NYSE:ORCL): ORCL is a large 9.40% position which was first purchased in Q1 2012 at prices between $26.50 and $30.20. Last quarter, the position was increased marginally at prices between $29.90 and $35.10. The bulk of the position was purchased in Q4 2012 and Q1 2013 at prices between $29.50 and $36.30. This quarter, the stake was increased by ~5% at prices between $30 and $34. The stock currently trades at around $34. The activity indicates a bullish bias.

TE Connectivity (NYSE:TEL): TEL has been in the portfolio since Q4 2011 when it was already a 10.36% stake. The share count has since been increased by over 40% over several quarters. As a percentage of the U.S. long portfolio, the stake currently stands at 9.89%, as the overall portfolio value has increased substantially in the interim. This quarter saw a minor stake increase after a marginal stake decrease last quarter. The activity does not indicate a shift in bias.

Charles Schwab (NYSE:SCHW): SCHW stake has been increased by around 50% since Q4 2011. The position currently stands at 8.48% of the U.S. long portfolio. This quarter saw a marginal increase. The consistent pattern of stake increases indicates a bullish bias.

Brookfield Asset Management (NYSE:BAM): BAM is a 5.70% of the U.S. long portfolio position first purchased in Q2 2012 at prices between $30 and $33. The stake was increased by ~10% last quarter at prices between $34.30 and $39.10. It was further increased by another ~5% this quarter at prices between $34.23 and $38. The stock currently trades outside those ranges at $39.71.

Crown Holdings (NYSE:CCK): CCK position has been increased by ~65% since Q4 2011. The stake was marginally increased last quarter. This quarter, the position was increased by ~5% to a 6.19% of the U.S. long portfolio position at prices between $41 and $45.50. The stock currently trades at $43.30. The stake build-up over multiple quarters indicates a bullish bias.

US Bancorp (NYSE:USB): U.S. Bancorp was a minute 0.03% of the U.S. long portfolio position as of last quarter. The stake was increased substantially to a 3.68% position this quarter at prices between $36 and $38. The stock currently trades at $38.11. The activity indicates a mild bullish bias.

The spreadsheet below highlights changes to Simpson's U.S. stock holdings in Q3 2013:


(Click to enlarge)

Source: Tracking Lou Simpson's SQ Advisors Portfolio - Q3 2013 Update