This article is part of a series that provides an ongoing analysis of the changes made to David Winters' US stock portfolio on a quarterly basis. It is based on Winters' regulatory 13F Form filed on 05/15/2014. 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 Q4 2013.
This quarter, Winters' US long portfolio decreased from $905M to $855M. The number of holdings remained steady at 11. The top five holdings represent almost 73% of the US long assets making it a heavily concentrated portfolio. The largest holding is Berkshire Hathaway (NYSE:BRK.B) at 17.65% of the US long portfolio.
The mutual fund (MUTF:WGRNX) has a global orientation and the US allocation is at around 36% of the overall portfolio. The three largest investments are a 6.98% allocation in Jardine Matheson Holdings (OTCPK:JMHLY), a 6.92% allocation in Swatch Group (OTCPK:SWGAY), and a 6.15% allocation in Berkshire Hathaway. JMHLY is a Singapore listed conglomerate focused on the growing Asian consumer while SWGAY is a Swiss luxury goods business.Stake Disposals:
Berkshire Hathaway : BRK.B is Wintergreen's largest US long portfolio position at 17.65%. The position saw minor stake reductions in the last three quarters at prices between $109 and $125. The stock currently trades at around $127. Except for some minor stake reductions, the position has consistently been bought since 2006. Wintergreen is very bullish on BRK.B.
Altria Group (NYSE:MO): MO was a huge 11.4% stake that was purchased in Q1 2012 at prices between $28 and $31. It has since been trimmed to an 8.50% position currently. Most of the trimming happened in Q1 2013 when the position was reduced by 26% at prices between $31.44 and $35.32. Last three quarters saw marginal stake reductions at prices between $34 and $38.57. The stock currently trades at $40.69.
Canadian Natural Resource Ltd. (NYSE:CNQ): CNQ is a very long-term position that has been in the portfolio since 2006. The stake has been built up over several years from 5.8% to 13.71% of the US long portfolio. The share count has increased around ten-times as a result of the stake build-up and the 2-for-1 stock-split in 2010. But, as a percentage of the US long portfolio, the position has increased only by around 60% as the portfolio value has increased from ~$266M to ~$905M in the 2006-2013 timeframe. This quarter saw a minor stake reduction. The stock currently trades at $39.84. For investors attempting to follow Wintergreen, CNQ is a good option to consider.
Mastercard Inc. (NYSE:MA): MA is a 6.45% of the US long portfolio position that had been kept remarkably steady ever since the stake initiation in 2011. Last quarter saw minor selling at prices between $65.39 and $83.55 and this quarter the position was reduced by around 50% at prices between $72.84 and $84.36. The stock currently trades at $73.75. MA has more than doubled since the initial stake establishment and so Wintergreen has started to harvest large long-term capital gains from this position.
Franklin Resources (NYSE:BEN): BEN is Wintergreen's second largest US long portfolio position at 14.67%. The stake was first purchased in 2008 and has seen consistent buying since. Q1 2013 saw a 5% stake increase at prices between $41.90 and $50.24 and the position has been kept steady since. This quarter saw a minor stake reduction. The stock currently trades at $54.33. Wintergreen is bullish on BEN.
Reynolds American (NYSE:RAI): RAI is a 13.21% of the US long portfolio stake that was increased by ~4% in Q2 2013 at prices between $44.20 and $50. This quarter saw a minor stake decrease. The stock currently trades at $57.33. RAI is a very long-term position that has been in the portfolio since their first 13F filing (Q4 2006). By EOY 2007, the position was aggressively built up to a 12.6% of the US long portfolio stake. During the market turmoil, the position was substantially reduced and by EOY 2009 the stake was at ~7% of the US long portfolio. Since then, the position was rebuilt through consistent buying almost every quarter. The stake build-up over several years represents a clear bullish bias.
Google Inc. (NASDAQ:GOOG): GOOG is a 4.79% of the US long portfolio position purchased in 2011. It has since been kept relatively steady. This quarter saw a marginal stake reduction.Stake Increases:
Coca Cola Company (NYSE:KO): KO is a very long-term position that has been built-up to an 11.34% stake. The position saw aggressive buying in Q4 2012 when 670,000 shares were purchased at prices between $35.97 and $38.58 to increase the stake by over 50%. Last quarter saw an ~18% stake increase at prices between $37 and $41.31 and this quarter saw a minor increase. The stock currently trades at around $40.89. Wintergreen is very bullish on KO.Kept Steady:
Consolidated-Tomoka Land Company (NYSEMKT:CTO): CTO is a very long-term stake. It was the largest US long portfolio position at over 24% in 2006. The position was increased by over 60% in 2007 as well. Since then, the stake has been kept relatively steady. Wintergreen owns over 1.5M shares which translates to an ownership of 26.3% of the business. As a percentage of the US long portfolio, the position stands at 7.27%. The stock currently trades at $39.43. For investors attempting to follow Wintergreen, CTO is a decent option to consider.
Union Pacific (NYSE:UNP): UNP is a small 2.19% of the US long portfolio stake established in Q2 2013 at prices between $135 and $160. Last quarter saw a ~4% stake increase at prices between $150 and $168. The stock currently trades at around $195.
Norfolk Southern (NYSE:NSC): NSC was a 1.51% of the US long portfolio position purchased in 2011 which had been kept relatively steady. Last quarter saw an about-turn as the position was almost eliminated at prices between $76.27 and $92.87. The stock currently trades at $97.34.
The spreadsheet below highlights changes to Wintergreen's US stock holdings in Q1 2014:
Disclosure: I 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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