I conclude my examination of Q1 2011 13F-HR filings with a look at some value investors: Mohnish Pabrai, David Winters of the Wintergreen Fund, Meryl Witmer from the Barron's Roundtable, and respected activist fund ValueAct Capital.
Pabrai once bid $650,000 to win a lunch with the most famous value investor of all time, Warren Bufffett. An avowed admirer of Buffett's investment philosophy (why wouldn't he be?), Pabrai's written several acclaimed books on value investing.
- Pabrai's activity during Q1 suggests a defensive posture toward the markets. He added no new positions nor did he add to any existing positions.
- Pabrai exited positions in Teck Resources (NYSE:TCK) and Harvest Natural Resources (NYSE:HNR). He also substantially reduced stakes in Air Transport Services (NASDAQ:ATSG), Posco (NYSE:PKX) and Terex (NYSE:TEX).
- Based on this filing, one might surmise that Pabrai may view the markets as overpriced or poised for a fall. Another possibility may be Pabrai need to raise cash for some reason. Keep in mind, this is all conjecture as 13F-HR filings provide incomplete information on any money manager's market strategy.
Winters is the manager of the respected Wintergreen Fund. A professed value investor, Winters isn't afraid to venture into sectors such as gold or energy that don't fall into traditional value territory. In fact, Winters' largest holding is Canadian Natural Resouces (CNQ, $107M), followed by Berkshire Hathaway (BRK.B, $67M), Franklin Resources (BEN, $64M) and Barrick Gold (ABX, $63M).
- Winters added three new stocks to his portfolio: Google (NASDAQ:GOOG), Mastercard (NYSE:MA) and Norfolk Southern (NYSE:NSC). He also increased stakes in Activision Blizzard (NASDAQ:ATVI) and Barrick Gold by over a third.
- Wintergreen Fund divested its Leucadia National (NYSE:LUK) and gold ETF (NYSEARCA:GLD) holdings but otherwise, held steady for the most part.
Witmer is best known as a member of the Barron's Roundtable and manages money through Eagle Value Partners. Their 13F-HR filing showed the most activity of all the managers profiled here.
- Witmer added six new positions besides the Motorola spin-off, of which the two largest stakes were Rock-Tenn (NYSE:RKT) and Calpine (NYSE:CPN).
- Significant divestitures included PHH (NYSE:PHH), Stewart Information Services (NYSE:STC), Loews (NYSE:L) and the affiliated oil driller, Diamond Offshore (NYSE:DO).
- Other notable moves were a reduction in Compass Minerals (NYSE:CMP) and in Globe Specialty Metals (NASDAQ:GSM), a salt miner and silicon producer, respectively.
ValueAct Capital and its small-cap brethren, appropriately named ValueAct Small Cap, take a more active role in their brand of value investing. Though I have not seen any materials explicitly laying out its strategy, it seems to take an approach similar to one espoused by Martin Whitman, as explained in his book The Aggressive Conservative Investor. With a view that true value does not exist until it is unlocked and realized, ValueAct doesn't come in guns blazing, but will become an active investor if it feels the situation calls for it.
- For the most part, both funds' filings (ValueAct Capital and its small-cap cousin) showed relatively subdued activity, with the small cap being nearly moribund.
- The parent fund did add new stakes in Motorola Solutions (NYSE:MSI) and Cephalon (NASDAQ:CEPH), the Teva (NYSE:TEVA) takeover target, but overall, the firm was a net seller, divesting big slugs of Gartner (NYSE:IT), Sara Lee (SLE) and Valeant Pharmaceuticals (NYSE:VRX), which saw a big run-up in share price last quarter.
View all Q1 2011 portfolio moves in spreadsheet format: