Tracking Ken Fisher's Fisher Asset Management Portfolio - Q2 2017 Update

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Includes: AAPL, AAWW, AMGN, AMZN, AXP, AZN, BABA, BAC, BASFY, BAYRY, BNPQY, BRK.B, BUD, C, CMCSA, CRM, CSCO, CTRP, CVX, DIS, FBGX, FEEU, FIGY, FLGE, GE, GOOG, GOOGL, GS, GSK, HD, HDB, HSBC, INFY, ING, INTC, ISNPY, JNJ, JPM, KO, LQD, LRLCY, LYG, MA, MBB, MON, MRK, MSFT, NVO, NVS, ORCL, PEP, PFE, PG, QCOM, RHHBY, SAN, SAP, SFTBY, SIEGY, SLB, SMFG, SNY, SPSB, SSYS, TCEHY, TSM, TTM, TXT, UBS, UTX, V, VECO, VOD, VZ, WFC, WMGI, WMT, XOM
by: John Vincent

Summary

Fisher’s 13F portfolio value increased from $62.44B to $66.32B in Q2 2017.

Amazon.com, Johnson & Johnson, Apple Inc., Visa Inc., and Alibaba Group Holdings are the largest five individual stock positions.

Fisher has substantial stakes in several ETFs/ETNs and hundreds of very small positions. They together account for more than one-third of the 13F portfolio.

This article is part of a series that provides an ongoing analysis of the changes made to Kenneth Fisher’s 13F stock portfolio on a quarterly basis. It is based on Fisher Asset Management’s regulatory 13F Form filed on 07/13/2017. Please visit our Tracking Kenneth Fisher's Fisher Asset Management Holdings article for an idea on his investment style and philosophy and our previous update highlighting the fund’s moves in Q1 2017.

This quarter, Fisher’s 13F portfolio value increased ~6% from $62.44B to $66.32B. The number of holdings increased from 773 to 802. Significantly, large positions increased from 63 to 72. The five largest individual stock positions are Amazon.com (NASDAQ:AMZN), Johnson & Johnson (NYSE:JNJ), Apple Inc. (NASDAQ:AAPL), Visa Inc. (NYSE:V), and Alibaba Group Holding (NYSE:BABA). Together, they account for ~12% of the 13F stock portfolio. Overall, the quarter saw a significant shift toward European equities as several ADRs saw large increases in allocation. Ken Fisher’s most recent articles on FT touted owning European equities and the overall shift seems consistent with those calls.

To know more about Ken Fisher, check-out his Research Papers (most notably in Behavioral Finance), investment books (several of them were NY Times best sellers) and his father Philip Fisher’s scuttlebutt investment philosophy explained in the book “Common Stocks and Uncommon Profits and Other Writings.”

Note: Fisher manages ~35,000 private client accounts and over 175 institutional accounts. Each such portfolio is personalized to client requirements and beating the S&P is not the focus for many of them. "13F Portfolio performance," which would be the performance of the sum total of all such monies in 13F securities, is an unknown. We do know that Ken Fisher is very talented and can consistently generate alpha - his Forbes picks are his most visible performance cues and those have outperformed the S&P 500 in the vast majority of years. The latest picks (Jan 2017) are MasterCard (MA), Amgen Inc. (AMGN), Verizon (VZ), SAP (SAP), Salesforce.com (CRM), Textron Inc. (TXT) and United Technologies (UTX).

New Stakes:

Sumitomo Mitsui Financial (SMFG): SMFG is a 0.58% of the portfolio stake established this quarter at prices between $6.95 and $7.90. The stock is now at $7.56.

Note: The quarter saw a significant shift away from US financials.

Stake Increases:

Alibaba Group Holdings: The ~2.2% BABA position saw a ~90% increase this quarter at prices between $107 and $144. Last quarter also saw a two-thirds increase at prices between $88 and $110. The stock currently trades at $152. The original position is from Q2 2015 at prices between $81 and $93. The aggressive buying pattern indicates a clear bullish bias.

Taiwan Semiconductor (TSM): TSM is a very long-term 1.82% of the US long portfolio position. A large block was purchased in 2012 at prices between $12.50 and $16.50. The stake was reduced by ~50% in Q2 2013 at prices between $17 and $20. The nine quarters through Q2 2016 had seen a combined ~70% increase at prices between $19 and $26. The stock currently trades at $35.85. This quarter saw a ~22% increase at prices between $31.50 and $36.92.

SoftBank Group ADR (OTCPK:SFTBY), ING Groep NV ADR (ING), Tencent Holding ADR (OTCPK:TCEHY), BNP Paribas ADR (OTCQX:BNPQY), Banco Santander SA ADR (SAN), AstraZeneca plc (AZN), and Intesa Sanpaolo Spa ADR (OTCPK:ISNPY): These ADRs saw sizable stake increases this quarter. TCEHY stock has returned ~60% YTD while the other six have also shown healthy double-digit returns.

Lloyds Banking Group plc ADR (LYG): LYG is a 0.62% of the US long portfolio position first purchased in Q4 2013 at prices between $4.67 and $5.36. The stake was increased by two-thirds in Q2 2014 at prices between $4.83 and $5.53. Q3 2016 saw a similar increase at prices between $2.55 and $3.31. The stock currently trades at $3.60. There was another ~12% increase this quarter.

Novo Nordisk A S ADR (NVO): NVO was established in 2011 with the bulk purchased in 2012 at prices between $23 and $34. Last eleven quarters had seen a combined ~25% reduction while this quarter saw a ~13% increase. The stock currently trades at $42.95 and the position is at 0.76% of the US long portfolio.

Wal-Mart Stores (WMT): The 0.67% WMT stake was mostly purchased in Q2 2016 at prices between $63 and $73. The stock currently trades at $76.15. This quarter saw a ~10% stake increase.

Siemens AG (OTCPK:SIEGY): SIEGY is a ~1% portfolio stake increased by ~45% in Q1 2016 at prices between $44 and $53 and the stock currently trades at $67.89. This quarter saw a one-third increase at prices between $66.50 and $73.

Note: The prices quoted above are adjusted for the 2-for-1 stock-split in March.

Vodafone (VOD): VOD is a ~1% of the 13F portfolio position established last quarter at prices between $24.43 and $26.91 and almost doubled this quarter at prices between $25.50 and $30.50. The stock is now at $29.77.

Johnson & Johnson: JNJ is a large top-three 2.29% of the portfolio position. Around two-thirds of the stake was purchased in 2008 at prices between $55 and $72 and most of the rest in 2011 at prices between $58 and $68. The stock currently trades at $135. There was a minor ~4% stake increase this quarter.

American Express (AXP): AXP has been in the portfolio since 2012. The original position was around 9M shares and the current stake is 11.25M shares. Q3 2016 saw a ~10% reduction at prices between $59 and $66 and the stock is now at $85.59. The position is at 1.43% of the portfolio. There was a very minor ~3% stake increase this quarter.

Procter & Gamble (PG): PG is another long-term 1.13% of the US long portfolio position that has been in the portfolio since before the financial crisis. The original position was increased by just over 75% in 2012 at prices between $60 and $70 and has since been kept relatively steady. Last twelve quarters have seen marginal buying. The stock currently trades at $88.61.

UBS Group AG (UBS): UBS is a ~1% of the US long portfolio position established in Q3 2013 at prices between $17 and $21.50. The original stake was reduced by around one-third in Q4 2013 at prices between $19 and $22. Q1 2014 saw an about-turn as the position was increased by ~37% at prices between $18.50 and $21.50 and the following quarter saw an additional 47% stake increase at prices between $18 and $21.50. In Q4 2014, the pattern reversed as the position was reduced by ~40%. Last ten quarters have seen a combined ~60% increase at prices between $12.25 and $23. The stock currently trades at $17.66. For investors attempting to follow Fisher, UBS is a good option to consider for further research.

SAP AG ADR: SAP is a ~1% of the US long portfolio position that was built up over several quarters in 2012 at prices between $54 and $80. The stake has wavered since but the overall position is now at ~6.4M shares - roughly the same sizing as in Q4 2012. The stock currently trades at $104.

Bayer AG ADR (OTCPK:BAYRY): BAYRY is a 0.96% of the US long portfolio stake. The bulk of the current position was purchased in Q2 2014 at prices between $128 and $145. Q2 2015 saw a huge 84% increase at prices between $139 and $155. The stock currently trades near the low end of their purchase price ranges at ~$130. For investors attempting to follow Fisher, BAYRY is a good option to consider for further research. Last several quarters have seen only marginal activity.

Note: In September 2016, Bayer AG agreed on a deal for Monsanto (MON) worth $128 per share. MON currently trades at ~$117.

Anheuser-Busch InBev SA ADR (BUD): BUD was a minutely small stake as of Q2 2015. In Q3 2015, the stake was increased to a ~1% of the portfolio position at prices between $104 and $129. The stock currently trades at ~$115. Last five quarters saw marginal further increases. For investors attempting to follow Fisher, BUD is a good option to consider for further research.

Oracle Corporation (ORCL): ORCL is a 0.91% of the US long portfolio position that has been in the portfolio since before the financial crisis. The original stake was reduced by around 50% in Q4 2013 at prices between $32 and $38. Since then the activity has been minor. The stock currently trades at $50.80. Q1 2016 saw marginal selling while last five quarters have seen minor increases.

Ctrip.com International ADR (CTRP): CTRP is a 0.82% of the US long portfolio stake. The original position was increased by ~25% in Q3 2015 at prices between $30 and $40. Q4 2015 saw a huge ~120% increase at prices between $31 and $56. The stock currently trades at $58.07. There was a minor ~3% increase this quarter.

Note: The prices quoted above are adjusted for the 2-for-1 stock-split in December 2015.

Cisco Systems (CSCO): CSCO is another long-term holding that was first purchased in 2009. By 2012, the stake was at over 33M shares. It has since been reduced to 16.1M shares (0.76% of the US long portfolio). The stock currently trades at $31.84.

L'Oreal Co. ADR (OTCPK:LRLCY): LRLCY was a very small position first purchased in 2008. It was built up to a significant ~1% stake in 2012 at prices between $20 and $28. The eight quarters from Q3 2013 to Q2 2015 saw a combined ~20% reduction at prices between $30 and $39. The stock currently trades at $42.41 and the remaining stake is at 0.65% of the US long portfolio. This quarter saw a ~5% increase.

Exxon Mobil (XOM): XOM is a very long-term position that has fluctuated over the years. The bulk of the current stake was built in 2011 at prices between $69 and $87. Q3 2015 saw a ~22% increase at prices between $68.50 and $83. Q1 2016 saw an about turn: ~16% reduction at prices between $73 and $84.50. The current position stands at 4.7M shares (0.58% of the US long portfolio) and the stock is at $80.12. There was a marginal increase this quarter.

BASF SE ADR (OTCQX:BASFY), Chevron Inc. (CVX), GlaxoSmithKline plc ADR (GSK), HSBC plc (HSBC), Intel Corporation (INTC), Merck Inc. (MRK), Novartis A G ADR (NVS), PepsiCo Inc. (PEP), Pfizer Inc. (PFE), Sanofi ADR (SNY), and Visa Inc.: These are significant positions (more than 0.5% of the US long portfolio) that were increased marginally this quarter. As the activities were very minor, they do not indicate a change in bias.

Stake Decreases:

Amazon.com: AMZN is the largest individual stock position at 2.48% of the portfolio. The stake is from 2011 and has quintupled: the cost-basis is ~$200 compared to the current price of $1026. Q2 2016 saw a ~20% selling at prices between $586 and $728. There was another ~16% selling this quarter at prices between $885 and $1011. Fisher is starting to harvest huge long-term gains.

Apple Inc.: AAPL is a top-three 2.29% individual stock position that was built up in 2012 at prices between $60 and $72. The original stake was increased by ~60% in Q2 2013 at prices between $59 and $65. There was a ~9% trimming this quarter at prices between $141 and $156. The stock currently trades at $150.

Alphabet Inc. (GOOG) (GOOGL): GOOG was a very small position that was built up to a substantial 2% position in 2011 at prices between $242 and $301. The stock has tripled and currently trades at $973. The position stands at ~1.8% of the portfolio. There was a ~14% reduction this quarter at prices between $823 and $984.

Home Depot (HD): HD is a 1.23% of the US long portfolio position first purchased in 2012 at prices between $42 and $65. Last three quarters had seen marginal increases. There was an about-turn this quarter: ~38% selling at prices between $146 and $159. The stock is now at $147. Fisher is harvesting long-term gains.

Bank of America (BAC), Citigroup Inc. (C), Goldman Sachs (GS), JPMorgan Chase (JPM) and Wells Fargo (WFC): The five financials saw substantial stake reductions this quarter. The WFC position was from prior to the financial crisis while the others were built up from 2012 onwards. WFC stake was almost sold out while the rest of the positions were reduced by roughly 50% each.

Comcast Corporation (CMCSA): CMCSA is a 0.79% of the US long portfolio position. The original stake was established in 2012 at prices between $12 and $18.50. There had only been minor activity since. This quarter saw a ~50% selling at prices between $37 and $42. The stock currently trades at $39.63. Fisher is harvesting long-term gains.

Note: The prices quoted above are adjusted for the 2-for-1 stock-split in February.

Berkshire Hathaway (BRK.B): BRK.B is a 0.74% of the US long portfolio position. The last time a substantial stake build-up happened was in Q3 2013 at prices between $112 and $119 when the position was increased by ~55%. The stock currently trades at $171. It is a very long-term position. The last nine quarters had seen minor increases. There was an about-turn this quarter: ~50% selling at prices between $161 and $172.

Walt Disney (DIS): DIS was a very small position in the portfolio till 2012 when over 8M shares were purchased at prices between $39 and $53. There had only been marginal activity since. This quarter saw the stake reduced by 50% at prices between $104 and $116. The stock currently trades at $107.

Roche Holding Limited ADR (OTCQX:RHHBY): RHHBY was a minutely small 0.19% of the portfolio position as of Q1 2015. The following quarter saw a whopping ~400% increase at prices between $34 and $38.50. The stock currently trades below that range at $32.27 and the stake is now at 0.57% of the portfolio. There was a ~20% selling at prices between $31.50 and $34.50.

General Electric (GE): The 0.86% GE position saw a ~30% selling last quarter at prices between $29.43 and $31.70 and the stock is now at $25.91. It is a very long-term stake that has been in the portfolio since before the financial crisis. There was a ~5% further trimming this quarter. The large reduction in a long-term position indicates a bearish bias.

Coca Cola (KO), HDFC Bank (HDB), Infosys Ltd. (INFY), Microsoft Corporation (MSFT), Qualcomm Inc. (QCOM), Schlumberger Ltd. (SLB), Tata Motors (TTM), and United Technologies (UTX): These are significant positions (more than 0.5% of the US long portfolio) that saw reductions this quarter.

The portfolio also has several large positions in different ETNs and ETFs (FEEU) (FIGY) (FBGX) (FLGE) (LQD) (MBB) (SCPB) - those together accounts for around 14% of the US long portfolio. Fisher also had large stakes in the following businesses per the latest 13G filings: Stratasys Ltd. (SSYS) - 6%, Atlas Air (AAWW) - 4.6%, Wright Medical (WMGI) - 4.7%, and Veeco Instruments (VECO) - 3.7%.

The spreadsheet below highlights changes to Fisher’s US stock holdings (only positions that are over 0.5% of the US long portfolio each are individually listed) in Q2 2017:

Portfolio spreadsheet

Disclosure: I am/we are long SFTBY, INTC, BAC, QCOM, AZN, CSCO.

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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