This article is part of a series that provides an ongoing analysis of the changes made to David Winters' US stock portfolio on a quarterly basis. It is based on Winters' regulatory 13F Form filed on 08/14/2014. Please visit our Tracking David Winters' Wintergreen Advisers Portfolio series to get an idea of his investment philosophy and our previous update highlighting the fund's moves during Q1 2014.
This quarter, Winters' US long portfolio decreased from $855M to $779M. The number of holdings decreased from 11 to 10 - Berkshire Hathaway, the largest 13F holding as of last quarter was eliminated this quarter. The top five holdings represent just over 75% of the US long assets making it a heavily concentrated portfolio.
The mutual fund (MUTF:WGRNX) has a global orientation and the US allocation is at around 36% of the overall portfolio. The three largest investments are a Jardine Matheson Holdings (OTCPK:JMHLY), Swatch Group (OTCPK:SWGAY), and Canadian Natural Resources (NYSE:CNQ). JMHLY is a Singapore listed conglomerate focused on the growing Asian consumer while SWGAY is a Swiss luxury goods business.
Berkshire Hathaway (NYSE:BRK.B): BRK.B was Wintergreen's largest US long portfolio position at 17.65% as of last quarter. The position had seen minor stake reductions in the last three quarters at prices between $109 and $125. This quarter, the stake was eliminated at prices between $121 and $129. The stock currently trades at around $134. Except for some minor stake reductions, the position had consistently been bought since 2006. The quick about-turn this quarter indicates a clear bearish bias.
Altria Group (NYSE:MO): MO was first purchased in Q1 2012 at prices between $28 and $31. In Q1 2013, the original position was reduced by 26% at prices between $31.44 and $35.32. Last four quarters has seen marginal stake reductions at prices between $33.46 and $43.12. The stock currently trades at $42.20.
MasterCard Inc. (NYSE:MA): MA is a 6.93% of the US long portfolio position that had been kept steady since the stake initiation in 2011. Q4 2013 saw minor selling at prices between $65.39 and $83.55 and last quarter the position was reduced by around 50% at prices between $72.84 and $84.36. This quarter saw minor selling. The stock currently trades at $75.21. MA has more than doubled since the initial stake establishment. Wintergreen has started to harvest large long-term gains from this position.
Franklin Resources (NYSE:BEN): BEN is Wintergreen's second largest US long portfolio position at 17.10%. The stake was first purchased in 2008 and has seen consistent buying since. Q1 2013 saw a 5% stake increase at prices between $41.90 and $50.24 and the position has been kept relatively steady since. Last two quarters have seen minor stake reductions. The stock currently trades at $54.79.
Reynolds American (NYSE:RAI): RAI is a 16.28% of the US long portfolio position that was increased by ~4% in Q2 2013 at prices between $44.20 and $50. Last two quarters saw minor stake reductions. The stock currently trades at $57.16. 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 US long portfolio stake. During the market turmoil, the position was substantially reduced and by EOY 2009 the stake was at ~7% of the US 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.
Google Inc. (NASDAQ:GOOG): GOOG is a 5.44% of the US long portfolio position purchased in 2011. It has since been kept relatively steady. Last two quarters have seen marginal stake reductions.
Union Pacific (NYSE:UNP): UNP is a small 2.54% of the US long portfolio stake established in Q2 2013 at prices between $67.50 and $80. Q4 2013 saw a ~4% stake increase at prices between $75 and $84. This quarter saw a marginal decrease. The stock currently trades at around $102.
Canadian Natural Resource Ltd.: 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 18.31% of the US long portfolio - it is currently Wintergreen's largest 13F position. This quarter saw a minor stake increase. The stock currently trades at $41.73. For investors attempting to follow Wintergreen, CNQ is a good option to consider.
Coca Cola Company (NYSE:KO): KO is a very long-term position that has been built-up to an 11.34% stake. The position was increased by 50% in Q4 2012 when 670,000 shares were purchased at prices between $35.97 and $38.58. Q4 2013 saw an additional 18% stake increase at prices between $37 and $41.31 and last quarter saw a minor increase. The stock currently trades at around $40.88. Wintergreen is very bullish on KO.
Consolidated-Tomoka Land Company (NYSEMKT:CTO): CTO is a very long-term stake. It was the largest US long portfolio position at over 24% in 2006. The stake was increased by over 60% in 2007 as well. Since then, the position has been kept relatively steady. Wintergreen owns over 1.5M shares which translates to an ownership of 26.3% of the business. As a percentage of the US long portfolio, the position stands at 9.10%. The stock currently trades at $50.79. It has returned just over 40% so far this year.
Norfolk Southern (NYSE:NSC): NSC was a 1.51% of the US long portfolio position purchased in 2011 which had been kept relatively steady. Q4 2013 saw an about-turn as the position was almost eliminated at prices between $76.27 and $92.87. The stock currently trades at $104.49.
The spreadsheet below highlights changes to Wintergreen's US stock holdings in Q2 2014:
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