Tracking William Von Mueffling's Cantillon Capital Management Portfolio - Q2 2014 Update

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Includes: ABEV, ADI, ALTR, BCO, BIDU, CACC, CL, ECL, FIS, GOOG, GOOGL, GWW, HOG, HRB, KO, LKQ, MSM, PCLN, SIRO, SLH, WAT, WLTW
by: John Vincent

Summary

William Von Mueffling's U.S. long portfolio decreased marginally this quarter from $4.32B to $4.31B.

Mueffling substantially increased positions in Fidelity National Information Svcs, Google, Harley Davidson, Sirona Dental, Solera, & Willis Group while reducing Colgate Palmolive & Priceline.

The portfolio became more concentrated this quarter with the top-five positions now accounting for ~52% of the US long portfolio compared to ~45% last quarter.

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 08/07/2014. 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 Q1 2014.

This quarter, Mueffling's US long portfolio decreased marginally from $4.32B to $4.31B. The number of holdings in the portfolio decreased from 20 to 19: a new position in H&R Block was added and positions in LKQ Corporation and Waters Corporation were eliminated. The portfolio continues to be heavily concentrated with the top five holdings representing around 52% of the total US long holdings. The largest position is Google which was first established in 2010 and now accounts for 12.42% of the US long portfolio. The largest five positions are Google Inc., Fidelity National Information Services, Harley-Davidson Inc., Baidu Inc., and Analog Devices.

Stake Disposals:

LKQ Corporation (NASDAQ:LKQ): LKQ was a 2.63% of the US long portfolio position that was disposed of this quarter at prices between $26.35 and $29.55. The stake was reduced by ~22% last quarter as well at prices between $24.77 and $32.90. The stock currently trades at $25.98. The position was first purchased in 2012 and was substantially increased in Q1 2013 at prices between $20 and $24. The stake elimination indicates a bearish bias.

Waters Corporation (NYSE:WAT): WAT was a very small 0.35% position that was eliminated this quarter at prices between $99 and $114. Last quarter saw a huge 87% stake reduction at prices between $98 and $115. The stock currently trades at around $103. The position was first purchased in 2011 and peaked in 2012 at 3.5% of the US long portfolio.

New Stakes:

H&R Block (NYSE:HRB): HRB is a small 1.86% of the US long portfolio position established this quarter at prices between $27.40 and $33.52. The stock currently trades at $32.38.

Stake Decreases:

Coca Cola (NYSE:KO): KO is a 3.20% of the US long portfolio position that was reduced by over 50% last quarter at prices between $37 and $41. This quarter saw a minor stake reduction. The stock currently trades at $39.35. The original stake was a ~2.5M share position established in 2010 at prices between $25 and $33. The position was increased by 40% in 2011 and doubled in 2012.

Colgate Palmolive (NYSE:CL): CL was a very long-term position that accounted for 2.70% of the US long portfolio as of last quarter. In the beginning of 2013, it accounted for over 7% of the US long portfolio but was reduced by more than half in Q2 2013 at prices between $56 and $63. It was almost eliminated this quarter at prices between $64 and $69.43. The stock currently trades at around $64.45. The activity indicates a bearish bias.

Priceline Inc. (NASDAQ:PCLN): PCLN was a top-five position at 8.26% of the US long portfolio as of last quarter. The bulk of the stake was purchased in 2011 and 2012 at much lower prices. This quarter, the position was almost eliminated at prices between $1108 and $1291. The stock currently trades at around $1285. Mueffling harvested large long-term gains from this position.

Stake Increases:

Altera Corporation (NASDAQ:ALTR): ALTR is a 4.53% 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. Q3 2013 saw a 25% stake increase at prices between $33 and $39. This quarter saw marginal buying. The stock currently trades near the low-end of his purchase prices ranges at around $32.67. For investors attempting to follow Mueffling, ALTR is a very good option to consider.

Ambev SA (NYSE:ABEV): ABEV is a 4.82% of the US long portfolio position established in November 2013 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. Last quarter saw a one-third stake increase at prices between $6.23 and $7.45 and this quarter saw a minor increase. The stock currently trades at $6.73. Mueffling continues to be bullish on ABEV.

Analog Devices (NYSE:ADI): ADI is a long-term position that has been in the portfolio since 2010. At the time, it accounted for just over 10% of the US long portfolio. The position was increased by two-thirds in 2011 as well. Since then the stake has remained relatively steady. This quarter saw minor buying and the position now accounts for 8.3% of the US long portfolio.

Baidu Inc. (NASDAQ:BIDU): BIDU is a top-five position at 10.03% 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 in each of the following three quarters. This quarter saw minor buying. The stock currently trades at around $214. 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.

Brink's Company (NYSE:BCO): BCO is a 2.04% of the US long portfolio stake first established in 2012. The position was increased by ~20% in Q3 2013 at prices between $25.50 and $28.50 and the stake saw minor trimming in the last two quarters. This quarter saw a minor increase. The stock currently trades at $26.62. For investors attempting to follow Mueffling, BCO is a good option to consider for further research.

Credit Acceptance Corporation (NASDAQ:CACC): CACC is a 1.35% of the US long portfolio position first purchased in 2012. The original stake was increased by around 50% in Q2 2013 at prices between $96 and $122. The position has since been kept relatively steady - last quarter saw marginal trimming while this quarter saw a minor increase. The stock currently trades at around $120. The activity does not indicate a clear bias.

Ecolab Inc. (NYSE:ECL): ECL is a 6.56% of the US long portfolio stake first purchased in 2012. The original stake was increased by around 75% in Q1 2013 at prices between $72.50 and $80. Since then the position has been kept almost steady. This quarter saw a minor increase. The stock currently trades at around $108.

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. Q3 2013 saw a 15% stake increase at prices between $42.50 and $47.50. Last quarter, the position was increased by 44% at prices between $48.87 and $56.55 and this quarter saw an additional 8% increase at prices between $51 and $55. The stock currently trades at $54.86 and is Mueffling's second-largest position at 10.62% of the US long portfolio.

Google Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL): GOOG is Mueffling's largest position at 12.42% of the US long portfolio. This quarter, the position was increased by ~14% at prices between $510 and $580. The stock currently trades at around $563. The original position was established in 2010 and doubled in 2011 at much lower prices. Mueffling is sitting on large long-term gains from this position.

Grainger W. W. (NYSE:GWW): GWW was a 2.35% of the US long portfolio stake established in Q3 2013 at prices between $247 and $274. The position was almost doubled in Q4 2013 at prices between $248 and $272 and increased by another 50% last quarter at prices between $229 and $266. This quarter saw a minor increase. The stake currently accounts for 6% of the US long portfolio. The stock is trading near the low-end of Mueffling's purchase price ranges at $233. For investors attempting to follow him, GWW is a very good option to consider for further research.

Harley Davidson (NYSE:HOG): HOG is a top-five 10.21% of the US long portfolio position that was established in Q2 2013 at prices between $50 and $60. The stake was increased by 56% in Q3 2013 at prices between $54 and $65. This quarter saw a ~16% stake increase at prices between $65 and $74. The stock currently trades at $60.63. The activity indicates a bullish bias.

MSC Industrial Direct Inc. (NYSE:MSM): MSM is a 2.15% of the US long portfolio position established in Q4 2013 at prices between $75.50 and $83.50. Last quarter saw an 84% stake increase at prices between $80 and $89. This quarter saw minor additional buying. The stock currently trades at $86.85.

Sirona Dental Systems (NASDAQ:SIRO): SIRO is a 4.76% of the US long portfolio position established last quarter at prices between $67 and $75. This quarter, the stake was increased by ~40% at prices between $73.33 and $82.53. The stock currently trades at $79.13. The aggressive buying pattern indicates a clear bullish bias.

Solera Holdings (NYSE:SLH): SLH is a 4.27% of the US long portfolio position that was increased by ~60% this quarter at prices between $61.71 and $67.76. The stock currently trades at $64. The original position was purchased in 2010 and increased substantially in 2011.

Willis Group Holdings (WSH): WSH was a 2.41% of the US long portfolio stake established in Q3 2013 at prices between $40.50 and $45. The position was increased by ~78% in Q4 2013 at prices between $42 and $46.50 and another one-third last quarter at prices between $41 and $45. This quarter saw an additional one-third stake increase at prices between $41 and $44.20. The position currently accounts for 6.72% of the US long portfolio. The stock is trading near the low-end of Mueffling's purchase price ranges at $40.31 and so is a good option to consider for further research.

Kept Steady:

None.

The spreadsheet below highlights changes to Mueffling's US stock holdings in Q2 2014:

Click to enlarge

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