Tracking William Von Mueffling's Cantillon Capital Management Portfolio - Q1 2016 Update

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Includes: A, ABEV, ADI, AXP, BIDU, BITA, CACC, CBG, CME, CMPR, ECL, FIS, GOOG, GOOGL, GWW, HOG, ICE, MSM, SERV, SPGI, ST, V, WLTW, ZTS
by: John Vincent

Summary

William Von Mueffling's US long portfolio increased ~8% this quarter from $5.32B to $5.71B.

Mueffling substantially increased its holdings in Zoetis Inc. and Visa Inc. while decreasing American Express.

The portfolio continues to be very concentrated, with the top five positions accounting for ~42% of the US long portfolio.

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 04/19/2016. Please visit our Tracking William Von Mueffling's Cantillon Capital Management Portfolio series to get an idea of his investment philosophy and our previous update highlighting the fund's moves during Q4 2015.

This quarter, Mueffling's US long portfolio increased 7.47% from $5.32B to $5.71B. The number of holdings increased from 21 to 23: stakes in ServiceMaster Global Holdings and CBRE Group were added during the quarter. The portfolio continues to be heavily concentrated, with the top five positions representing 41.56% of the total US long holdings. The largest stake is Alphabet Inc. which accounts for 11.48% of the US long portfolio. The largest five positions are Alphabet Inc., Fidelity National Information Services, Analog Devices, Baidu Inc., and S&P Global.

New Stakes:

CBRE Group Inc. (NYSE:CBG) and ServiceMaster Global Holdings (NASDAQ:SERV): These two are the new positions this quarter. The 1.92% stake in CBG was established at prices between $23.32 and $34.58 and the stock is now at $29.63. The medium-sized 3.02% SERV position was purchased at prices between $35.13 and $42.21 and it currently trades at $38.35.

Note 1: Jeffrey Ubben's ValueAct has a ~10% ownership stake in CBRE Group.

Note 2: ServiceMaster was taken private in 2007 in a private equity transaction. In June 2014, it had an IPO at $17 per share. The stock has more than doubled since.

Stake Decreases:

American Express (NYSE:AXP): AXP is a 1.35% of the US long portfolio position. It was established in Q1 2015 at prices between $78 and $93. This quarter saw an almost two-thirds stake reduction at prices between $51.11 and $69.55. The stock currently trades well below its purchase price range at $65.43.

Ambev SA (NYSE:ABEV): ABEV is a small ~1% 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. Q1 2014 saw a one-third stake increase at prices between $6.23 and $7.45. In Q3 2015, the stake was reduced by ~57% at prices between $4.59 and $6.25. Last two quarters have seen only minor activity. The stock currently trades at $5.57.

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 stake was increased by two-thirds in 2011 as well. The last major activity was in Q4 2014 when the position saw a ~18% increase at prices between $43.10 and $57.49. The stock currently trades at $56.32. It is currently Mueffling's third-largest position at 7.47% of the US long portfolio.

Agilent Inc. (NYSE:A): Agilent is a medium-sized 3.22% of the US long portfolio position established last quarter at prices between $33.74 and $42.36. The stock currently trades at $40.92. This quarter saw a ~4% stake reduction.

Baidu Inc. (NASDAQ:BIDU): BIDU is a top-five 7.13% portfolio stake first purchased in 2012. The original position was increased by over 30% in Q1 2013 at prices between $84 and $113 and another 30% in the following quarter at prices between $83 and $103. Since then, the activity has been very minor. The stock currently trades at $194. Mueffling is sitting on huge gains on this position.

Cimpress (NASDAQ:CMPR) previously VistaPrint: CMPR was a minutely small 0.17% of the US long portfolio position established in Q3 2014. The following quarter saw the stake increase to a 1.52% of the US long portfolio position at prices between $52.63 and $75.98. Q2 2015 saw a ~15% increase at prices between $80.51 and $91.16 and the following quarter saw a further ~38% increase at prices between $64.53 and $84.51. The stock currently trades at $87.87. The stake is now at 2.39% of the US long portfolio. Last two quarters have seen only minor activity.

CME Group (NASDAQ:CME): CME is a medium-sized 4.14% of the US long portfolio stake established in Q4 2014 at prices between $78.26 and $92.91. Last quarter saw a ~60% stake increase at prices between $87 and $100. The stock currently trades at $91.91. This quarter saw a minor stake reduction.

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. The stock currently trades well above its most recent purchase price range at ~$196.

Ecolab Inc. (NYSE:ECL): ECL is a large 6.22% of the US long portfolio stake first purchased in 2012. The original position was increased by around 75% in Q1 2013 at prices between $72.50 and $80. Q4 2014 saw a ~21% increase at prices between $101 and $115 and the following quarter saw a further ~10% increase at prices between $99 and $117. The stock currently trades at $115. Last few quarters have seen only minor activity.

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 stake at prices between $39 and $46. Q3 2013 saw a 15% stake increase at prices between $42.50 and $47.50 and the following quarter saw another 44% increase at prices between $48.87 and $56.55. The stock currently trades outside those ranges at $65.80. FIS is Mueffling's second-largest position at 8.59% of the US long portfolio. Last two years have seen only minor activity.

Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) previously Google: GOOG is Mueffling's largest position at 11.48% of the US long portfolio. The original stake was established in 2010 and doubled in 2011 at much lower prices. The last significant buying happened in Q2 2014 when the position was increased by ~14% at prices between $510 and $580. Last seven quarters have seen only very minor activity. The stock currently trades at $693. Mueffling is sitting on huge long-term gains from this position.

W.W. Grainger (NYSE:GWW): GWW stake was established in Q3 2013 at prices between $247 and $274. The position was almost doubled the following quarter at prices between $248 and $272. H1 2015 also saw another ~60% increase at prices between $229 and $266. There was an about turn in Q3 2015: ~38% reduction at prices between $211 and $238. That was followed with a ~40% further selling last quarter at prices between $191 and $231. The stake currently accounts for 1.94% of the US long portfolio. This quarter saw a ~4% further stake reduction. The stock is now at ~$235.

Harley-Davidson (NYSE:HOG): HOG is a fairly large 5.23% of the US long portfolio position. The original stake was established in Q2 2013 at prices between $50 and $60. The position was increased by 56% in Q3 2013 at prices between $54 and $65. Q2 2014 also saw a ~16% increase at prices between $65 and $74. The stock currently trades well below its purchase price ranges at $47.83. For investors attempting to follow Mueffling, HOG is a good option to consider for further research. Last few quarters have seen only very minor activity.

Intercontinental Exchange (NYSE:ICE): ICE is a 4.19% of the US long portfolio stake established in Q4 2014 at prices between $194 and $227. In Q1 2015, the position was increased by ~50% at prices between $205 and $240 and the following quarter saw a further ~26% increase at prices between $222 and $242. The stock currently trades at $240. There was only marginal activity over the last three quarters.

MSC Industrial Direct Co. Inc. (NYSE:MSM): MSM is a 2.93% of the US long portfolio position established in Q4 2013 at prices between $75.50 and $83.50. Q1 2014 saw an 84% stake increase at prices between $80 and $89. In Q4 2014, the position saw another ~145% increase at prices between $77 and $86. The stock currently trades at $77.50. Last five quarters have seen only minor activity.

Stake Increases:

Bitauto Holdings (NYSE:BITA): BITA is a small ~1% of the US long portfolio position established in Q3 2014 at prices between $46 and $96. Q1 2015 saw a ~60% increase at prices between $47.39 and $89.11. Q3 2015 also saw a further ~38% increase at prices between $24.50 and $51. This quarter saw a further ~18% stake increase at prices between $16.41 and $28.28. The stock currently trades at $24.96.

S&P Global (NYSE:SPGI) previously McGraw-Hill Financial (MHFI): The top-five 6.90% SPGI stake was established in Q1 2015 at prices between $85.76 and $109. Q3 2015 saw a huge ~140% increase at prices between $85 and $107 and that was followed with another ~75% increase last quarter at prices between $87 and $100. There was a further ~18% stake increase this quarter at prices between $80.77 and $99.46. The stock currently trades at $107. The aggressive build-up indicates a clear bullish bias.

Sensata Technologies Holding N.V. (NYSE:ST): ST is a 4.24% of the US long portfolio position established in Q2 2014 at prices between $44.50 and $50. The stake was increased by ~30% in Q1 2015 at prices between $48.98 and $57.74 and another one-third the following quarter at prices between $52.56 and $58.66. Q3 2015 saw a further 26% increase at prices between $43 and $53. The stock currently trades well below its purchase price ranges at $37.67. Last two quarters have also seen minor additional buying. For investors attempting follow Mueffling, ST is a very good option to consider for further research.

Visa Inc. (NYSE:V) and Zoetis Inc. (NYSE:ZTS): These medium-sized stakes were established last quarter and substantially increased this quarter. The 3.12% of the portfolio Visa position was purchased at prices between $70 and $80 and increased by ~73% this quarter at prices between $67.77 and $76.78. The stock is now at $77.27. The 4.77% ZTS stake was established at prices between $40.80 and $48.33 and increased by ~170% this quarter at prices between $39.33 and $48.01. It currently trades at $47.03. For investors attempting to follow Mueffling, these two are good options to consider for further research.

Willis Towers Watson (NASDAQ:WLTW): The stake came about as a result of the merger between Willis Group Holdings (WSH) and Towers Watson (TW) that closed on January 6, 2016. It was structured as a merger-split-rename transaction and the resultant entity was named Willis Towers Watson plc. WSH shareholders received one share of WLWT in place of every 2.6490 shares of WSH held. Cantillon's large stake in WSH was converted to WLTW shares. Overall, there was a very minor stake reduction this quarter. The original position is from Q3 2013 and its overall cost-basis is ~$110 compared to the current price of $125.

The spreadsheet below highlights changes to Mueffling's US stock holdings in Q1 2016:

Click to enlarge

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.