Akre Capital is a value-oriented hedge fund established in 1989. The founder Charles Akre is a conservative investor. The majority of Akre's holdings belong to the technology, financial, and the services sector. In 1996, he launched FBR Focus. Since its inception till 2009 his fund realized annual returns of 13%. In 2009, he ended FBR Focus and launched another fund called the Akre Focus Fund. Over the years, even during the time of the financial crisis, Charles Akre has managed to beat the market. Recently, it has managed to earn a spot in the 25 best performing hedge funds in this market turmoil of 2011.
Observing Akre Capital's 13F portfolio, it is evident that Charles Akre is comparatively bullish about the market than other investors. During the second quarter of 2011, he sold out only two of his stocks: Optionsxpress Holdings (OXPS) and Kimberly Clark (KMB). Optionsxpress Holdings (OXPS) lost around 25% while Kimberlyclark Corp (KMB) lost -2.1%.
Moreover, there were no major reductions during the second quarter. He reduced American Tower Corp (AMT) by 4%, Penn Natl Gaming (PENN) by 1% and Berkshire Hathaway by 3%. All three companies realized negative returns. American Tower Corp lost 4%, Penn Natl Gaming lost 8%, and Berkshire Hathaway lost 7%. Here are Akre Capital's stock picks at the end of June:
| Company | Ticker | Value (x1000) | Activity | Return Since June |
| AMERICAN TOWER | AMT | 69,626 | -4% | -4% |
| MASTERCARD INC | MA | 55,903 | 17% | 9% |
| ROSS STORES INC | ROST | 50,609 | 0% | -11% |
| ENSTAR GROUP | ESGR | 48,985 | 2% | -7% |
| DOLLAR TREE INC | DLTR | 47,748 | 1% | 0% |
| MARKEL CORP | MKL | 44,303 | 0% | -6% |
| LAMAR ADVERTISING | LAMR | 43,509 | 26% | -28% |
| O REILLY AUTOMOTIVE | ORLY | 39,976 | 21% | -8% |
| CARMAX INC | KMX | 26,431 | 62% | -15% |
| HARTFORD FINL SVCS | HIG | 19,490 | 0% | -25% |
| FACTSET RESH SYS | FDS | 15,732 | 0% | -17% |
| TJX COS INC NEW | TJX | 13,202 | 2% | 3% |
| PENN NATL GAMING | PENN | 11,579 | -1% | -8% |
| BERKSHIRE HATHAWAY | BRK-A | 7,895 | -3% | -7% |
| TD AMERITRADE HLDG | AMTD | 7,804 | 0% | -25% |
| AEROPOSTALE | ARO | 7,437 | 325% | -32% |
| BERKSHIRE HATHAWAY | BRK-B | 7,139 | 3% | -8% |
| WMS INDS INC | WMS | 6,144 | 0% | -28% |
| PRICE T ROWE GROUP | TROW | 6,090 | 14% | -16% |
| BECTON DICKINSON | BDX | 4,308 | 0% | -7% |
| TECHNE CORP | TECH | 4,168 | 0% | -13% |
| ANNALY CAP MGMT | NLY | 3,774 | 0% | -1% |
| LPL INVT HLDGS INC | LPLA | 3,368 | 0% | -19% |
| ASSURED GUARANTY | AGO | 3,262 | NEW | -29% |
| DIAMOND HILL INVES | DHIL | 2,456 | NEW | -7% |
| MIDDLEBURG FINL | MBRG | 1,920 | 0% | -2% |
| WHITE RIVER CAPI | RVR | 1,796 | 0% | 0% |
| CSX CORP | CSX | 1,398 | 200% | -14% |
| PRIMO WTR CORP | PRMW | 1,079 | NEW | -67% |
| ENTERPRISE PRODS | EPD | 571 | 0% | -1% |
| NUSTAR GP HOLDI | NSH | 490 | 0% | -5% |
| ENTERTAINMENT PPT | EPR | 246 | 0% | -14% |
| EXXON MOBIL CORP | XOM | 206 | 0% | -11% |
During the first quarter of 2011, Akre purchased O Reilly Automotive (ORLY). In the second quarter he increased his stake in the company by 21%. ORLY has lost 8% since the end of June. The largest stakeholder of ORLY is Steve Mandel. Steve Mandel's Lone Pine added 85% more of ORLY to its 13F portfolio in the second quarter of 2011. Like Akre, Mandel also purchased ORLY during the first quarter of 2011 (check out Steve Mandel's latest stock picks).
In the first quarter ending March, Akre sold off Primo Wtr Corp (PRMW). However, during the second quarter he re-purchased PRMW. He owns $1 million worth of shares of the company. PRMW has disappointedly lost 67% since the end of June. Currently, John Murphy's Alydar Capital has the largest position in the company (view John Murphy's $2 billion portfolio).
MasterCard Inc (MA) returned 9% since June. Akre Capital owns $55 million worth of MasterCard after a 17% increase in its position during the second quarter. Akre had previously increased the stake by 14% in the first quarter. Glenn Greenberg's Brave Warrior Capital has $118 million worth of MA. It makes up approximately 10% of his 13F portfolio (see Glenn Greenberg's stock picks).
Insider Monkey calculated Akre Capital's loss since June. Charles Akre's stock picks lost 8.7% vs. a 10.5% loss for the SPY. Despite the loss, Akre has still outperformed the market by 1.8 percentage points. We believe investors can minimize their loss during this market turmoil by simply imitating Charles Akre's stock picks.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
