Tracking William Von Mueffling's Cantillon Capital Management Portfolio - Q4 2013 Update

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 |  Includes: ABEV, ADI, ALTR, BBD, BCO, BIDU, CACC, CL, ECL, FIS, GOOG, GWW, HOG, KO, LKQ, MSM, OPEN, PCLN, PM, SLH, WLTW
by: John Vincent

This article is part of a series that provides an ongoing analysis of the changes made to William Von Mueffling's US stock portfolio on a quarterly basis. It is based on Mueffling's regulatory 13F Form filed on 02/10/2014. Please visit our Tracking Stocks In William Von Mueffling's Investment Funds series to get an idea of his investment philosophy and our previous update highlighting the fund's moves during Q3 2013.

This quarter, Mueffling's US long portfolio increased ~10% from $3.83B to $4.22B. The number of holdings in the portfolio decreased from 21 to 19: positions in Banco Bradesco, Companhia Bebidas, Open Table, and Philip Morris were eliminated and replaced with positions in Ambev SA and MSC Industrial Direct. The portfolio continues to be heavily concentrated with the top five holdings representing 46.05% of the total US long holdings. The largest holding is Google which has been in the portfolio since 2010 and now accounts for 10.84% of the US long portfolio.

Stake Disposals:

Companhia Bebidas (ABV): ABV was a 5.21% of the US long portfolio stake first established in 2010. The position was increased by 50% in Q2 2013 at prices between $33 and $44. The stake was further increased by ~52% last quarter at prices between $34 and $39. The stock currently trades at around $37. In November, the position was replaced by shares in Ambev SA as a result of a stock-swap merger transaction that resulted in ABV holders receiving 5 shares of Ambev SA for each ABV share they held.

Philip Morris (NYSE:PM): PM was a large long-term position in the portfolio that was built-up aggressively in 2010 and 2011. In 2012, the position was reduced by around 50% to a still significant 3.67% of the US long portfolio. Since then, the position had been kept steady, although minor adjustments were made. This quarter, the position was eliminated at prices between $84 and $92. The stock currently trades below that range at around $79. PM announced in November that 2014 will be viewed as an investment year and since then the stock has been especially weak. The stake elimination indicates a bearish bias.

Banco Bradesco (NYSE:BBD): BBD was a 2.11% position first established in 2011 at prices between $13.50 and $19.20. It was kept relatively steady until this quarter with the position size increasing a cumulative ~10% in the interim. The stake was eliminated this quarter at prices between $12 and $15.50. The stock currently trades below that range at $11.

Open Table (NASDAQ:OPEN): OPEN was a small 1.10% of the US long portfolio position first established in 2011. The position was doubled to a 2% stake in 2012. The stake was reduced by more than half in Q2 2013 at prices between $55 and $70 and was almost eliminated last quarter at prices between $62 and $77. The minute 0.02% position that remained was eliminated this quarter. The stock currently trades at around $73. The activity indicates a clear bearish bias.

New Stakes:

MSC Industrial Direct Inc. (NYSE:MSM): MSM is a 1.01% of the US long portfolio position established this quarter at prices between $75.50 and $83.50. The stock currently trades at $81.50.

Ambev SA (NYSE:ABEV): ABEV is a 3.87% of the US long portfolio position established in November as a result of a stock-swap merger transaction that resulted in ABV holders receiving 5 shares of Ambev SA for each share they held. The stock currently trades at $6.70. Mueffling is bullish on ABEV.

Stake Decreases:

Baidu Inc. (NASDAQ:BIDU): BIDU is Mueffling's second-largest position at 9.84% of the US long portfolio. It was a ~5% position first established in 2012. The stake was increased by over 30% in Q1 2013 at prices between $84 and $113 and another 30% in Q2 2013 at prices between $83 and $103. The position was marginally decreased last quarter and saw another minor trimming this quarter. The stock currently trades at around $165 having vaulted over 63% in Q3 2013 and a few more points since. Mueffling is bullish on Baidu. However, the stock is trading well above his purchase price ranges and so investors attempting to follow him will have to wait for a better entry point.

Altera Corporation (NASDAQ:ALTR): ALTR is a 4.35% of the US long portfolio stake first purchased in 2011. The position was almost doubled in Q1 2013 at prices between $33 and $36.50. Last quarter saw a 25% increase in the position size at prices between $33 and $39. This quarter saw a minor stake decrease. The stock currently trades near the low-end of his purchase prices ranges at around $33.91. For investors attempting to follow Mueffling, ALTR is a very good option to consider.

Brinks Corporation (NYSE:BCO): BCO is a 2.53% of the US long portfolio stake first established in 2012. The position was increased by ~20% last quarter at prices between $25.50 and $28.50 and the stake saw minor trimming this quarter. The stock currently trades at around $31.

Colgate Palmolive (NYSE:CL): CL is a very long-term position which currently accounts for 2.80% of the US long portfolio - in the beginning of the year, it accounted for over 7% of the US long portfolio: the position was reduced by more than half in Q2 2013 at prices between $56 and $63 and was marginally reduced last two quarters. The stock currently trades at around $61.50. The activity indicates a bearish bias.

Fidelity National Information Services (NYSE:FIS): FIS was a minute 0.20% of the US long portfolio position established in Q1 2013. In Q2 2013, the position was increased to a large 6.11% of the US long portfolio position at prices between $39 and $46. Last quarter saw a 15% stake increase at prices between $42.50 and $47.50. This quarter saw a slight stake-decrease and the position now stands at 6.83% of the US long portfolio. The stock currently trades outside those ranges at $53.

Harley Davidson (NYSE:HOG): HOG is a large 9.03% of the US long portfolio position that was established in Q2 2013 at prices between $50 and $60. The stake was increased by 56% last quarter at prices between $54 and $65. The stock currently trades at the top-end of those ranges at around $65. The position saw minor trimming this quarter but is currently his third largest position after Google and Baidu.

LKQ Corporation (NASDAQ:LKQ): LKQ is a 4.32% of the US long portfolio position that was reduced by ~24% last quarter at prices between $25.50 and $32. The stock currently trades at $27.35. The position was first purchased in 2012 and was substantially increased in Q1 2013 at prices between $20 and $24. The stake was reduced marginally this quarter.

The following positions were marginally reduced this quarter: Analog Devices (NYSE:ADI) at 8.01%, Coca Cola (NYSE:KO) at 7%, Ecolab (NYSE:ECL) at 6.31%, Google Inc. (NASDAQ:GOOG) at 10.84%, Priceline Inc. (NASDAQ:PCLN) at 8.33%, Solera Holdings (NYSE:SLH) at 2.89%, and Waters Corporation (WSH) at 2.52%. The minor activity does not indicate a change in bias.

Stake Increases:

Grainger W. W. (NYSE:GWW): GWW was a 2.35% of the US long portfolio stake established last quarter at prices between $247 and $274. The position was almost doubled this quarter at prices between $248 and $272. The stake currently accounts for 4.08% of the US long portfolio. The stock is trading below Mueffling's purchase price ranges at $234 and so is a good option to consider when following him.

Willis Group Holdings : WSH was a 2.41% of the US long portfolio stake established last quarter at prices between $40.50 and $45. The position was increased by ~78% this quarter at prices between $42 and $46.50. The stake currently accounts for 4.01% of the US long portfolio. The stock is trading within Mueffling's purchase price ranges at $43 and so is a good option to consider when following him.

Credit Acceptance Corporation (NASDAQ:CACC): CACC was a ~1% of the US long portfolio position established in 2012. The stake was increased by around 50% in Q2 2013 to a ~1.50% position at prices between $96 and $122. The position has since been kept relatively steady. The stock currently trades at around $129. The activity does not indicate a clear bias.

The spreadsheet below highlights changes to Mueffling's US stock holdings in Q4 2013:

Click to enlarge

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.