Tracking Glenn Greenberg's Brave Warrior Advisors Portfolio - Q4 2016 Update

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Includes: AR, AXTA, BAC, BAM, CMCSA, CMPR, ESRX, HCA, JPM, LBTYK, LILA, LILAK, LVNTA, PRI, SCHW, ST, T, TDW
by: John Vincent

Summary

Glenn Greenberg’s US long portfolio increased from $2.07B to $2.10B this quarter.

Express Scripts was added while increasing HCA Holdings and almost dropping Cimpress.

The largest three positions are Charles Schwab, JPMorgan Chase and warrants, and HCA Holdings and they add up to ~42% of the portfolio.

This article is part of a series that provides an ongoing analysis of the changes made to Glenn Greenberg's US stock portfolio on a quarterly basis. It is based on Greenberg's regulatory 13F Form filed on 02/14/2017. Please visit our Tracking Glenn Greenberg's Brave Warrior Advisors Portfolio series to get an idea of his investment philosophy and our previous update for the fund's moves during Q3 2016.

This quarter, Greenberg's US long portfolio increased marginally from $2.07B to $2.10B. The top three holdings represent ~42% of the portfolio while the top five is at ~64%. The largest position is Charles Schwab (NYSE:SCHW), which was first purchased in Q3 2012 and now accounts for ~15% of the portfolio.

Stake Disposals:

None.

New Stakes:

Express Scripts (NASDAQ:ESRX) and Liberty Interactive Ventures (NASDAQ:LVNTA): These two are the new positions this quarter. ESRX is a fairly large 6.20% portfolio stake purchased at prices between $65 and $77 and the stock is now at $69.23. For investors attempting to follow Greenberg, ESRX is a good option to consider for further research. LVNTA is a minutely small 0.10% stake.

Stake Decreases:

Charles Schwab Corporation: SCHW's stake was first purchased in Q3 2012. Close to 6M shares were purchased at prices between $12.50 and $14.50. The position has since been built up to the current stake of ~8.2M shares (15.45% of the US long portfolio - largest 13F stake currently). The stock is now at $41.55. The last three quarters had seen minor selling and there was another ~10% selling this quarter at prices between $31 and $40.50. Greenberg is starting to harvest huge gains.

JPMorgan Chase & Co. (NYSE:JPM) & JPMorgan WTS: JPM is a large ~11% of the US long portfolio stake established in Q3 2014 at prices between $55.50 and $61.50 and increased by ~14% in the following quarter at prices between $55 and $63. The stake was again increased by ~16% in Q1 2015 at prices between $54.50 and $62.50. Q2 2016 saw an about turn: ~40% reduction at prices between $57 and $66. The last two quarters also saw minor selling.

The stock currently trades at $89.92. The TARP warrant (Strike 42.03, 10/28/2018 Expiry, Yahoo Ticker: JPM-WT) stake was established in Q1 2015 and increased by ~45% the following quarter. Q3 2015 saw a further ~20% increase. The warrant currently trades at $49, which implies a nominal leverage of $1.85. The stake saw a ~60% reduction this quarter. The common & warrant stake together is still the second-largest position at 14% of the portfolio.

Sensata Technologies (NYSE:ST): ST is a fairly large ~6% portfolio position purchased last quarter at prices between $34.50 and $40 and the stock currently goes for $41.47. There was marginal trimming this quarter.

Primerica Inc. (NYSE:PRI): PRI is ~5% of the US long portfolio position established in Q3 2011 at much lower prices. Q4 2014 saw a ~30% reduction at prices between $46 and $55.50 and the following quarter saw a further ~10% reduction at prices between $49.50 and $55. In Q1 2015, the pattern reversed: ~30% increase at prices between $44 and $51 and that was followed by a ~15% increase in Q3 2015 at prices between $41 and $46.

Last quarter saw a ~17% selling at prices between $50 and $59 and that was followed with a ~40% reduction this quarter at prices between $53 and $72.50. The stock currently trades at $80.50. Greenberg controls ~3.5% of the business.

Cimpress (NASDAQ:CMPR) previously VistaPrint: CMPR was a large ~9% of the US long portfolio position as of last quarter. The original stake consisted of ~2M shares purchased in Q4 2011 at prices between $27 and $36. H1 2014 saw a ~40% increase at prices between $37 and $55. Q4 2014 saw an about-turn as ~40% of the position was sold at prices between $52.50 and $76. H1 2015 had also seen a ~20% reduction at prices between $79.50 and $91.

In Q4 2015, the pattern reversed again: ~80% increase at prices between $64.50 and $84.50. H1 2016 had seen a ~40% selling at prices between $69 and $100. That was followed with another ~30% reduction last quarter at prices between $91 and $103. The stake was almost sold out this quarter at prices between $81 and $102. The stock currently trades at $82.75. Brave Warrior harvested gains.

Stake Increases:

HCA Holdings (NYSE:HCA): HCA is a large (top three) ~13% portfolio stake established last quarter at prices between $74 and $81 and increased by ~45% this quarter at prices between $69.50 and $82. The stock currently trades at $83.80.

Liberty Global Inc. (NASDAQ:LBTYK): LBTYK is a large (top five) ~11% of the portfolio stake purchased in Q1 2016 at prices between $30 and $41 and increased by ~50% the following quarter at prices between $26.50 and $38.50. The stock is now at $34.93. Last quarter saw marginal trimming while this quarter saw a very minor increase. For investors attempting to follow Brave Warrior, LBTYK is a good option to consider for further research.

Antero Resources (NYSE:AR): AR is a large (top five) ~11% of the US long portfolio position established in Q2 2015 at prices between $34 and $45.50 and increased by ~85% the following quarter at prices between $20 and $34.50. Q1 2016 saw another ~20% increase at prices between $19.50 and $28. The following quarter saw a whopping ~120% further increase at prices between $24.50 and $30. The stock currently trades at $24.97. Last quarter saw marginal trimming while this quarter saw a minor increase. For investors attempting to follow Brave Warrior, AR is a good option to consider for further research.

Brookfield Asset Management (NYSE:BAM): BAM is a large ~10.50% of the US long portfolio stake established in Q2 2015 at prices between $34 and $38.50 and increased by ~57% the following quarter at prices between $29.50 and $36. Q1 2016 saw an about turn: ~23% reduction at prices between $27 and $35. The stock currently trades at $37.17. Last quarter saw a ~8% trimming while this quarter saw a marginal increase.

Note: The prices quoted above are adjusted for the spinoff of Brookfield Business Partners that closed in June 2016.

Axalta Coating Systems (NYSE:AXTA): AXTA is a ~6% of the portfolio position. It was established in Q1 2016 at prices between $21 and $29. Q2 2016 saw a ~37% reduction at prices between $25 and $30.50. There was an about turn this quarter: ~50% increase at prices between $24.50 and $28.50. The stock currently trades at $29.57.

Liberty Global LiLac (NASDAQ:LILA) (NASDAQ:LILAK): LILAK was a minutely small stake established in Q2 2016. The position was built up to a ~1% portfolio stake last quarter and this quarter saw the stake doubled. The stock is now at $25.34 and it is now a ~2% stake.

Comcast Corporation (NASDAQ:CMCSA): CMCSA is a minutely small 0.05% stake that saw a marginal increase this quarter.

Kept Steady:

The following very small positions (less than 0.1% of the US long portfolio each) were kept steady in the quarter: AT&T Inc. (NYSE:T), Bank of America (NYSE:BAC), and Tidewater Inc. (NYSE:TDW).

The spreadsheet below highlights changes to Greenberg's US stock holdings in Q4 2016:

Disclosure: I am/we are long BAC.

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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