Tracking David Winters' Wintergreen Advisers Portfolio - Q3 2016 Update

| About: Wintergreen Fund (WGRNX)

Summary

David Winters’ 13F portfolio decreased from $269M to $257M this quarter.

Wintergreen Fund's largest three positions are Reynolds American, British American Tobacco plc, and Consolidated-Tomoka Land.

Alphabet Inc. was substantially reduced during the quarter.

This article is part of a series that provides an ongoing analysis of the changes made to David Winters' 13F stock portfolio on a quarterly basis. It is based on Winters' regulatory 13F Form filed on 11/14/2016. 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 Q2 2016.

This quarter, Winters' 13F portfolio decreased ~5% from $269M to $257M. The number of holdings remained steady at 7. The top three holdings represent ~83% of the assets, making it a heavily concentrated portfolio.

The mutual fund (MUTF:WGRNX) (MUTF:WGRIX) has a global orientation: ~40% US, ~23% cash & short-term investments, and the rest outside US. Switzerland and United Kingdom together account for ~29% of the overall portfolio. AUM is ~$600M. Performance wise, the fund is up ~5% YTD compared to up ~2% for the MSCI World Index. The three largest investments are Reynolds American, British American Tobacco plc (NYSEMKT:BTI), and Consolidated-Tomoka Land and they together account for ~35% of the overall portfolio. Nestle SA (OTCPK:NSRGY), Compagnie Financiere Richemont SA (OTCPK:CFRUY), Swatch Group AG (OTCPK:SWGAY), Birchcliff Energy (OTCPK:BIREF), and Heineken Holding NV (OTCQX:HKHHF) are the other non-US positions in the top ten.

Note: Wintergreen Fund's tobacco allocation is large at ~34%. In the 13F portfolio, the allocation is even larger at ~52%.

New Stakes:

None.

Stake Disposals:

None.

Stake Increases:

None.

Stake Decreases:

Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL): GOOG is a ~10% of the portfolio position purchased in 2011 at much lower prices. It had since been kept relatively steady. Q4 2015 saw an about turn: ~26% reduction at prices between $608 and $777 and that was followed with a ~21% reduction the following quarter at prices between $678 and $765. This quarter saw another ~22% selling at prices between $692 and $787. Winters is harvesting huge long-term gains from this position. The stock is now at $761.

Kept Steady:

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 and $35.50. The five quarters thru Q4 2015 had seen a combined ~55% stake reduction at prices between $45 and $62. Q1 2016 saw another ~31% selling at prices between $57 and $63. The stock currently trades at $62.77 and the remaining stake is at ~18% (third-largest) of the 13F portfolio.

Baker Hughes (NYSE:BHI): BHI was a minutely small 0.33% of the 13F portfolio stake established in Q3 2015 at prices between $45.50 and $62. Q4 2015 saw a substantial increase to a 1.33% portfolio stake at prices between $43 and $57.50. The pattern reversed in Q1 2016: ~17% stake reduction at prices between $38.50 and $47.50. Last quarter saw another ~50% selling at prices between $39 and $49.50. The stock currently trades at $60.86.

Consolidated-Tomoka Land Company (NYSEMKT:CTO): CTO is a very long-term stake. It was the largest 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 1.54M shares which translates to an ownership of 26% of the business. As a percentage of the 13F portfolio, the position stands at ~31% (second-largest). The stock currently trades at $55.08. It returned ~55% in 2014, was flat for 2015, and is up ~5% YTD.

Note: A regulatory Form 13D/A filing on 11/15/2016 showed a marginal increase from ~1.54M to ~1.55M shares. More importantly, they have disclosed a proposal for four director nominees for the CTO's 2017 proxy statement.

Reynolds American (NYSE:RAI): RAI is Wintergreen's largest 13F stake at ~34% of the portfolio. It is a very long-term position that has been in the portfolio since their first 13F filing in Q4 2006. By EOY 2007, the position was aggressively built up to a 12.6% of the portfolio stake. During the market turmoil that followed, the position was substantially reduced and by EOY 2009 the stake was at ~7% of the 13F portfolio. Since then, the position was rebuilt through consistent buying almost every quarter. Last six quarters had seen selling: ~55% overall stake reduction at prices between $32 and $54. The stock currently trades at $53.84.

Note: Reynolds American had a two-for-one stock-split in September 2015 and the prices quoted above are adjusted for this split.

Union Pacific (NYSE:UNP): UNP is a ~6% of the US long portfolio stake established in Q2 2013 at prices between $67.50 and $80. Q3 2014 saw a ~47% stake increase at prices between $97 and $110. There was a ~28% reduction in Q4 2015 at prices between $75 and $97 and that was followed with another ~26% selling in Q1 2016 at prices between $68.50 and $84.50. The stock currently trades at $99.83.

General Dynamics (NYSE:GD): GD is a very small 0.34% of the US long portfolio stake established in Q1 2016 at prices between $124 and $138. The stock currently trades well above that range at $167.

The spreadsheet below highlights changes to Wintergreen's US stock holdings in Q3 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.

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