Tracking Glenn Greenberg's Brave Warrior Advisors Portfolio - Q1 2017 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 decreased marginally from $2.10B to $2.09B this quarter.

Antero Resources was increased while reducing HCA Holdings, Express Scripts, and JPMorgan Chase.

The largest three positions are Charles Schwab, HCA Holdings, and Liberty Global and they add up to ~41% 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 05/15/2017. 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 Q4 2016.

This quarter, Greenberg's US long portfolio decreased marginally from $2.10B to $2.09B. The top three holdings represent ~41% of the portfolio, while the top five is at ~64%. The largest position is Charles Schwab, which was first purchased in Q3 2012 and now accounts for ~15% of the portfolio.

Stake Disposals:

Cimpress (NASDAQ:CMPR) previously VistaPrint: CMPR was a large ~9% of the US long portfolio position as of Q3 2016. 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. The stake saw a two-thirds reduction over the next three quarters at prices between $69 and $103 and the position was almost sold out last quarter at prices between $81 and $102. The minutely small remainder stake was eliminated this quarter. The stock currently trades at $86.59. Brave Warrior harvested gains.

Liberty Interactive Ventures (NASDAQ:LVNTA): The minutely small 0.10% established last quarter was disposed of this quarter.

New Stakes:

None.

Stake Decreases:

Charles Schwab Corporation (NYSE:SCHW): SCHW 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 ~7.7M shares (14.91% of the US long portfolio - largest 13F stake currently). The stock is now at $38.33. Last five quarters have seen a combined ~20% trimming at prices between $23 and $43. Greenberg is starting to harvest huge gains.

HCA Holdings (NYSE:HCA): HCA is a large (top three) ~13% portfolio stake established in Q3 2016 at prices between $74 and $81 and increased by ~45% last quarter at prices between $69.50 and $82. This quarter saw a ~14% trimming at prices between $74 and $91. The stock currently trades at $81.26.

Liberty Global plc (NASDAQ:LBTYK): LBTYK is a large (top three) ~13% 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 $29.24. This quarter saw marginal trimming. For investors attempting to follow Brave Warrior, LBTYK is a good option to consider for further research.

Brookfield Asset Management (NYSE:BAM): BAM is a large (top five) 11.55% 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 $36.78. This quarter saw marginal trimming.

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

JPMorgan Chase & Co. (NYSE:JPM) & JPMorgan WTS: JPM is a large ~7% of the US long portfolio stake established in Q3 2014 and built up over the next two quarters at prices between $54.50 and $63. Q2 2016 saw an about turn: ~40% reduction at prices between $57 and $66. This quarter saw another one-third selling at prices between $83 and $94. The stock currently trades at $83.96. 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 $43.20 which implies a nominal leverage of 1.94. The stake saw a ~60% reduction last quarter and that was followed with a ~22% selling this quarter. The common & warrant stake together is a very large stake at ~10% of the portfolio.

Axalta Coating Systems (NYSE:AXTA): AXTA is a ~7% 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 last quarter: ~50% increase at prices between $24.50 and $28.50. The stock currently trades at $30.93. There was marginal trimming this quarter.

Sensata Technologies (NYSE:ST): ST is a fairly large ~6% portfolio position purchased in Q3 2016 at prices between $34.50 and $40 and the stock currently goes for $39.33. There was marginal trimming this quarter.

Primerica, Inc. (NYSE:PRI): PRI is a ~6% of the US long portfolio position established in Q3 2011 at a cost-basis in the low-20s. H2 2016 saw a two-thirds reduction at prices between $53 and $72.50. The stock currently trades at $76.60. Greenberg controls ~3.4% of the business. There was a ~3% further trimming this quarter. Greenberg is harvesting huge long-term gains.

Express Scripts (NASDAQ:ESRX): ESRX is a 4.45% portfolio stake purchased last quarter at prices between $65 and $77. The position was reduced by ~25% this quarter at prices between $64 and $73 and the stock is now at $59.26.

Stake Increases:

Antero Resources (NYSE:AR): AR is a large (top five) ~12% 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 $21.41. Last two quarters have seen minor increases. For investors attempting to follow Brave Warrior, AR is a good option to consider for further research.

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 in Q3 2016 and last quarter saw the stake doubled. The stock is now at $20.03 and it is now a ~2% stake. There was 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: Comcast Corporation (NASDAQ:CMCSA), 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 Q1 2017:

Disclosure: I am/we are long AR, 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.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

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