Charles Akre founded Akre Capital in 1989. The firm adopts a bottom-up approach of investing. Being value-oriented, Akre Capital invests primarily in undervalued companies with good business models, good management, and high rate of return. Charles Akre is very selective when it comes to investing. Majority of Akre Capital’s equity portfolio is made up of companies belonging to the services, technology, and financial sector. Akre is a conservative investor. Even during the current market turmoil, Akre Capital has managed to outperform the market. It is among the 25 best performing hedge funds in this market turmoil.
In the first quarter of 2011, Akre Capital sold off Ensco (ESV), Fox Chase Bancorp Inc (FXCB), MSCI Inc (MSCI), 99 Cents Only Stores (NDN), O Reilly Automotive Inc (ORLY), and Primo Water Corp (PRMW). Since March 2011, ENSCO PLC (ESV) lost 24%, Fox Chase Bancorp Inc (FXCB) lost 7%, MSCI Inc (MSCI) lost 9%, and 99 Cents Only Stores (NDN) lost 10%. However, O Reilly Automotive Inc (ORLY) gained 4%, and Primo Water Corp (PRMW) gained 13%.
During the same time, Akre Capital reduced some of its stock holdings as well. It reduced its positions in Tradestation Group (TRAD) and Berkshire Hathaway (BRK.A). Tradestation position was reduced by 33% and Berkshire Hathaway by 13%. TRAD gained 39% while Berkshire Hathaway lost 13%. Here are Akre Capital’s holdings at the end of March:
Company Name | Ticker | Value (x1000) | Return |
AMERICAN TOWER | 71,978 | -5% | |
MARKEL CORP | 46,466 | -9% | |
LAMAR ADVERTISING CO | 46,449 | -45% | |
ENSTAR GROUP LTD | 45,832 | 1% | |
ROSS STORES INC | 44,975 | 0% | |
MASTERCARD INC | 40,079 | 28% | |
DOLLAR TREE INC | 39,475 | 17% | |
O REILLY AUTOMOTIVE | 28,980 | 4% | |
HARTFORD FINANCIAL | 19,617 | -24% | |
FACTSET RESEARCH | 16,112 | -20% | |
CARMAX INC | 15,853 | -15% | |
T J X COMPANIES | 12,223 | 8% | |
OPTIONSXPRESS HOLDI | 11,527 | -30% | |
PENN NATIONAL GAMING | 10,695 | -4% | |
BERKSHIRE HATHAWAY | 8,771 | -13% | |
T D AMERITRADE HOLDING | 8,348 | -28% | |
BERKSHIRE HATHAWAY | 7,465 | -13% | |
W M S INDUSTRIES INC | 7,070 | -43% | |
T ROWE PRICE GROUP | 5,869 | -21% | |
BECTON DICKINSON & CO | 3,981 | -1% | |
ANNALY CAPITAL | 3,634 | 6% | |
TECHNE CORP | 3,579 | 2% | |
L P L INVESTMENT HOL | 3,525 | -20% | |
AEROPOSTALE INC | 2,432 | -50% | |
MIDDLEBURG FINANCIAL | 2,290 | -19% | |
KIMBERLY CLARK CORP | 1,958 | -1% | |
WHITE RIVER CAPITAL | 1,604 | 13% | |
C S X CORP | 1,397 | -15% | |
TRADESTATION GROUP | 1,262 | 39% | |
ENTERPRISE PRODUCTS P | 569 | -3% | |
NUSTAR G P HOLDINGS | 496 | -5% | |
ENTERTAINMENT PROP | 247 | -15% | |
EXXON MOBIL CORP | 213 | -14% | |
E N S C O PLC |
| -24% | |
FOX CHASE BANCORP |
| -7% | |
M S C I INC |
| -9% | |
99 CENTS ONLY STORES |
| -10% | |
O REILLY AUTOMOTIVE |
| 4% | |
PRIMO WATER CORP |
| 13% |
American Tower Corp (AMT) makes up 13.97% of Akre Capital’s 13F portfolio. Akre increased American Tower by 8% in the first quarter of 2011. At the end of March, the fund had 1.38 million shares of the company worth $71 million. Since March, American Tower has lost 5%. One of the most successful Tiger cubs, Andreas Halvorsen’s Viking Global has the largest position in the company. He has 8.85 million shares of American Tower. He increased it by 15% during the first quarter (check out Andreas Halvorsen’s top stock picks).
Since March, Lamar Advertising Co (LAMR) has lost 45%. Akre Capital increased Lamar by 1% during the first quarter. The company makes up 9% of Akre Capital’s portfolio. It has 1.25 million shares of Lamar Advertising worth $46.4 million. John H. Scully’s SPO Advisory Corp has the largest stake in Lamar Advertising (see John H. Scully’s top holdings)
MasterCard Inc (MA) performed relatively better than other stock picks of Akre Capital. It gained 28% since the end of March. The company makes up 7.78% of Akre Capital’s portfolio. Akre increased its MasterCard position by 14% in the first quarter of 2011. It has shares worth around $40 million. Stephen Mandel’s Lone Pine Capital has the largest position in MasterCard (Check out Stephen Mandel’s $12 billion portfolio).
Akre Capital's stock picks lost 6.5% since the end of March. However, it performed better than most hedge funds and It beat the market by 4.5 percentage points as SPY lost 11% since March. We believe investors can achieve above average returns by imitating Akre Capital’s top stock picks.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
