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

This quarter, Simpson's US long portfolio increased just over 12% from $1.87B to $2.10B. The number of holdings in the portfolio remained steady at 13. The top five holdings represent more than 52% of the US long assets. The largest holding is United Parcel Service at 11.89% - it was established in Q2 2013 and has been steadily increased since. All positions except for Berkshire Hathaway were adjusted during the quarter although most of them were minor. Major changes include substantial stake reductions in DIRECTV and TE Connectivity and a stake doubling in US Bancorp.

Stake Disposals:

None.

New Stakes:

None.

Stake Decreases:

DIRECTV (NASDAQ:DTV): DTV is a position that was steadily increased by more than double since Q4 2011. This quarter saw an about-turn as the position size was reduced by over 43% at prices between $58 and $69. It now accounts for 5.47% of the US long portfolio. The stock currently trades at $72. The substantial stake reduction this quarter indicates a clear bearish 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 had since been increased by over ~45% over several quarters. This quarter, the position was reduced by ~40% at prices between $49.91 and $55.11. The stock currently trades at around $57. The activity indicates a bearish bias.

Valeant Pharmaceuticals (NYSE:VRX): VRX position has been increased by ~43% since Q4 2011. The stake currently stands at 9.26% of the US long portfolio. The last three quarters saw small stake reductions. 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 US long portfolio stake established in Q2 2013 at prices between $82.30 and $89. It was increased by ~53% last quarter at prices between $85 and $92. This quarter saw an 8% stake increase at prices between $88.70 and $105. The stock currently trades at around $97. It is Simpson's largest 13F position currently at 11.89 % of the US long portfolio. The large stake build-up over the last three quarters indicates a clear bullish bias.

Wells Fargo (NYSE:WFC): WFC is a 10.37% of the US long portfolio stake that was consistently built-up since Q4 2011. Last quarter, the position was increased by ~20% at prices between $41 and $45. This quarter saw a further 10.5% stake increase at prices between $40 and $45.50. The stock currently trades just above those ranges at $46. The aggressive buying indicates a clear bullish bias.

Oracle Corporation (NYSE:ORCL): ORCL is a large 10.71% position which was first purchased in Q1 2012 at prices between $26.50 and $30.20. In Q2 2013, 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. Last quarter, the stake was increased by ~5% at prices between $30 and $34 and this quarter saw an additional 11% stake increase at prices between $32 and $38.26. The stock currently trades at around $38. The activity indicates a bullish bias.

Charles Schwab (NYSE:SCHW): SCHW stake has been increased by around 53% since Q4 2011. The position currently stands at 9.30% of the US long portfolio. This quarter saw a marginal increase. The consistent pattern of stake increases indicates a bullish bias.

US Bancorp (NYSE:USB): US Bancorp was a minute 0.03% of the US long portfolio position as of Q2 2013. The stake was increased substantially to a 3.68% position last quarter at prices between $36 and $38. This quarter saw a stake doubling at prices between $35.70 and $40.60. The stock currently trades at around $40. The position now stands at 7.48% of the US long portfolio. The activity indicates a bullish bias.

Moody's Corp (NYSE:MCO): MCO is a 7.50% of the US 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 $79.50. The position was trimmed slightly in the last two quarters and was slightly increased this quarter. Lou Simpson continues to be bullish on MCO.

Brookfield Asset Management (NYSE:BAM): BAM is a 5.80% of the US long portfolio position first purchased in Q2 2012 at prices between $30 and $33. The stake was increased by ~10% in Q2 2013 at prices between $34.30 and $39.10. It was further increased by another ~5% last quarter at prices between $34.23 and $38 and another ~10% this quarter at prices between $37 and $41. The stock currently trades near the top-end of those ranges at around $39.

Crown Holdings (NYSE:CCK): CCK position has been increased by ~90% since Q4 2011. The stake was marginally increased in Q2 2013. Last quarter, the position was increased by ~5% to a 6.19% of the US long portfolio position at prices between $41 and $45.50. This quarter saw a ~12% stake increase at prices between $40 and $44.50. The stock currently trades at around $44. The position currently stands at 6.52% of the US long portfolio. The stake build-up over multiple quarters indicates a bullish bias.

Kept Steady:

Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B): BRK is Simpson's fourth largest position at 10.07% of the portfolio. The original 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. Last quarter, the position was marginally increased at prices between $111 and $119 and was kept steady this quarter. Lou Simpson continues to be very bullish on Berkshire Hathaway stock. The stock currently trades at around $115, well above Simpson's average cost-basis.

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

(click to enlarge)

Source: Tracking Lou Simpson's SQ Advisors Portfolio - Q4 2013 Update