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

This quarter, Winters' U.S. long portfolio increased marginally from $918M to $949M. The number of holdings remained steady at 14. The top five holdings represent close to 60% of the U.S. long assets making it a heavily concentrated portfolio. The largest holding is Berkshire Hathaway (BRK.B) at 14.83% of the U.S. long portfolio.

The mutual fund (WGRNX) has a global orientation and the U.S. allocation is at around 39% of the overall portfolio. The largest three investments are an 8% allocation in Jardine Matheson Holdings (OTC:JMHLY), a 6.05% allocation in Berkshire Hathaway, and a 5.88% allocation in Swatch Group (OTC:SWGAY). JMHLY is a Singapore listed conglomerate focused on the growing Asian consumer and SWGAY is a Switzerland based manufacturer of watches, jewelry, and accessories.

Stake Disposals:

McDonald's Corporation (MCD): MCD was a small 1.41% position that was purchased in 2009 at much lower prices. The position had been kept relatively steady since then. It was eliminated this quarter at prices between $94 and $102. The stock currently trades at around $97. Stake disposal of the small long-term stake signifies a mild bearish bias.

New Stakes:

Lorillard Inc. (LO): LO is a 1.12% of the U.S. long portfolio stake established this quarter at prices between $42 and $46.50. The stock currently trades at $52.65. Wintergreen has a ~30% exposure to cigarettes in the U.S. long portfolio with large positions in Altria, Philip Morris, and Reynolds American. In the global mutual fund (WGRNX), the exposure is ~15% and includes a large 5.48% stake in British American Tobacco (BTI).

Stake Decreases:

Berkshire Hathaway : BRK.B is Wintergreen's largest U.S. long portfolio position at 14.83%. The stake saw minor buying last year but had since been kept steady. This quarter saw a minor stake reduction at prices between $111 and $119. The stock currently trades at $116. Except for a couple of minor stake reductions, the position has consistently been bought since 2006. Wintergreen is very bullish on BRK.B.

Altria Group (MO): MO was a huge 11.4% stake that was purchased in Q1 2012 at prices between $28 and $31. It has since been trimmed to a 7.18% position currently. Most of the trimming happened in Q1 2013 when the position was reduced by 26% at prices between $31.44 and $35.32. This quarter saw a marginal stake reduction at prices between $33.50 and $37.50. The stock currently trades at $38.

Stake Increases:

Coca Cola Company (KO): KO is a very long-term position that has been built-up to an 8.37% position. The position saw aggressive buying in Q4 2012 when 670,000 shares were purchased at prices between $35.97 and $38.58 to increase the stake by over 50%. This quarter saw a marginal stake increase at prices between $37.88 and $41. The stock currently trades at around $40.22.

The rest of the positions were left untouched during the quarter:

Franklin Resources (BEN): BEN is Wintergreen's second largest U.S. long portfolio position at 12.40%. The stake was first purchased in 2008 and has seen consistent buying since then. Q1 2013 saw a 5% stake increase at prices between $41.90 and $50.24 and the position has been kept steady since then. The stock currently trades at $54.15. Wintergreen is bullish on BEN. Note: The share count shows a 3x increase because of the 3-for-1 stock-split effective July 26, 2013.

Reynolds American (RAI): RAI is a 10.93% of the U.S. long portfolio stake that was increased by ~4% last quarter at prices between $44.20 and $50. The stock currently trades outside that range at around $52.52. RAI is a very long-term position that has been in the portfolio since their first 13F filing (Q4 2006). By EOY 2007, the position was aggressively built up to a 12.6% of the U.S. long portfolio stake. During the market turmoil, the position was substantially reduced and by EOY 2009 the stake was at ~7% of the U.S. long portfolio. Since then, the position was rebuilt through consistent buying almost every quarter. The stake build-up over several years represents a clear bullish bias.

Philip Morris International (PM): PM is a large 10.57% position that was left untouched this quarter. A starter position was purchased in 2009 and it was aggressively built up over the next two years to a 12.65% position by EOY 2011. Since then, the position has been marginally increased although on a relative basis, the stake is smaller. Wintergreen continues to be bullish on PM.

MasterCard Inc. (MA): MA is an 11.25% of the U.S. long portfolio position that has been kept remarkably steady ever since the stake initiation in 2011. The large position size indicates a bullish bias. MA has more than doubled since the initial stake establishment and so Wintergreen is sitting on large long-term capital gains on this position.

Canadian Natural Resource Ltd. (CNQ): CNQ is a very long-term position that has been in the portfolio since 2006. The stake has been built up over several years from 5.8% to 10.05% of the U.S. long portfolio. The share count has increased almost 10-times as a result of the stake build-up and the 2-for-1 stock-split in 2010. But, as a percentage of the U.S. long portfolio, the position has increased only by around 61% as the portfolio value has increased from ~$266M to ~$949M in the 2006-2013 time frame. The stock price has not budged much and Wintergreen is continuing to stay very bullish on the position. For investors attempting to follow Wintergreen, CNQ is a very good option to consider.

Consolidated-Tomoka Land Company (CTO): CTO is a very long-term stake. It was the largest U.S. long portfolio position at over 24% in 2006. The position was increased by over 60% in 2007 as well. Since then, the stake has been kept relatively steady. Wintergreen owns over 1.5M shares currently which translates to an ownership of 27% of the business. As a percentage of the U.S. long portfolio, the position currently stands at 6.26%. The stock currently trades at $36.45, much higher than Wintergreen's average purchase price. For investors attempting to follow Wintergreen, CTO is a decent option to consider.

Google Inc. (GOOG) & Norfolk Southern (NSC): GOOG & NSC are 3.45% & 1.51% of the U.S. long portfolio positions respectively purchased in 2011. Both have since been kept relatively steady. As the position sizes are still small, they do not indicate a clear bias.

Union Pacific (UNP): UNP is a small 1.56% of the U.S. long portfolio stake established last quarter at prices between $135 and $160. The stock currently trades near the high-end of that range at around $160.

NV Energy (NVE): NVE is a very small 0.53% of the U.S. long portfolio stake established last quarter at prices between $19.28 and $24. The stock currently trades at $23.82.

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


(Click to enlarge)

Source: Tracking David Winters' Wintergreen Advisers Portfolio - Q3 2013 Update