Tracking William Von Mueffling's Cantillon Capital Management Portfolio - Q2 2018 Update

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Includes: A, ADI, AGN, AMT, AON, AVGO, AWI, BDX, BIDU, BITA, CACC, CME, CMPR, ECL, EFX, FAST, FB, FIS, GOOG, GOOGL, IBKR, ICE, INTC, PRI, SERV, SPGI, SSNC, ST, TNET, TSM, V, VRSN, WLTW, ZTS
by: John Vincent
Summary

William Von Mueffling's 13F portfolio value increased this quarter from $8.80B to $9.29B.

Facebook and Aon plc were increased while decreasing Allergan plc and dropping Bitauto Holding.

The portfolio continues to be very concentrated with the top five positions accounting for ~29% of the 13F portfolio.

This article is part of a series that provides an ongoing analysis of the changes made to William Von Mueffling’s 13F stock portfolio on a quarterly basis. It is based on Mueffling’s regulatory 13F Form filed on 08/07/2018. Please visit our Tracking William Von Mueffling's Cantillon Capital Management Portfolio series to get an idea of his investment philosophy and our previous update highlighting the fund’s moves during Q1 2018.

This quarter, Mueffling’s 13F portfolio value increased 5.58% from $8.80B to $9.29B. The number of holdings increased from 31 to 33. The portfolio continues to be heavily concentrated with the top five positions representing ~29% of the total 13F holdings. The largest stake is Alphabet Inc. which accounts for 7.18% of the portfolio. The largest five positions are Alphabet Inc., S&P Global, Analog Devices, Fidelity National Information Services, and Baidu.

New Stakes:

Fastenal (FAST), Intel Corp. (INTC), and Armstrong World Industries (AWI): These are the new positions this quarter. The 1.66% FAST stake was purchased at prices between $48 and $56 and the stock currently trades just above that range at $57.29. INTC is a 1.31% of the portfolio position established at prices between $48.50 and $57 and it is now near the low end of that range at $49.70. The very small 0.71% AWI stake was purchased at prices between $55 and $65 and it currently goes for $69.70.

Stake Disposals:

Bitauto Holdings (BITA): The very small 0.85% BITA stake was disposed this quarter.

Stake Increases:

CBRE Group Inc. (NYSE:CBRE): The 3.88% stake in CBG was purchased in Q1 2016 at prices between $23 and $34.50 and increased by ~125% over the next two quarters at prices between $24.50 and $31. The stock is now at $49.60. There was a ~19% selling over the last six quarters while this quarter saw a ~9% increase.

TriNet Group Inc. (TNET): The 2.72% of the portfolio stake in TNET saw a ~15% increase over the last two quarters. The position was established in Q2 2016 with the bulk purchased in the following two quarters at prices between $18.50 and $26. The stock is now at $55.59.

Note: Cantillon controls ~6.4% of TriNet Group.

Facebook Inc. (FB): FB is a 2.40% of the portfolio stake established last quarter at prices between $152 and $193 and increased by ~60% this quarter at prices between $155 and $202. The stock is currently at ~$184.

Aon plc (AON) and Primerica Inc. (PRI): These two small stakes saw substantial increases this quarter. The ~2% AON position was increased by ~50% at prices between $135 and $145 and the stock is now at $143. PRI is a small ~1% position that saw a ~10% increase this quarter.

Stake Decreases:

Alphabet Inc. (GOOG) (GOOGL): GOOG is Mueffling’s largest position at 7.18% of portfolio. The original stake was established in 2010 and doubled in 2011 at much lower prices. The last significant buying happened in Q2 2014 when the position was increased by ~14% at prices between $510 and $580. Last seven quarters have seen a combined ~30% reduction at prices between $750 and $1175. The stock currently trades at $1242. Mueffling is harvesting huge long-term gains.

S&P Global (SPGI) previously McGraw Hill Financial: The top-three 6.72% SPGI stake was established in Q1 2015 at prices between $86 and $109. Q3 2015 saw a huge ~140% increase at prices between $85 and $107 and that was followed with another ~75% increase next quarter at prices between $87 and $100. There was a further ~20% stake increase in Q1 2016 at prices between $81 and $100. The stock currently trades at ~$202. Last two years have seen a combined ~21% reduction at prices between $145 and $210.

Analog Devices (ADI): ADI is a long-term stake that has been in the portfolio since 2010. At the time, it accounted for just over 10% of the portfolio. The position was increased by two-thirds in 2011 as well. The last major activity was in Q4 2014 when the stake saw a ~20% increase at prices between $43 and $58. The stock currently trades at $98.59. It is Mueffling’s third-largest position at 5.72% of the portfolio. There was a ~17% trimming over the last five quarters.

Fidelity National Information Services (FIS): FIS was a very small position in Q1 2013. The following quarter saw the stake increase to a large ~6% position at prices between $39 and $46. Q3 2013 saw a 15% increase at prices between $43 and $48 and the following quarter saw another 44% increase at prices between $49 and $57. The stock currently trades well above those ranges at $105. Last seven quarters have seen a ~40% reduction at prices between $74 and $108. It is still Mueffling’s fourth-largest position at 5.18% of the 13F portfolio.

Baidu Inc. (BIDU): BIDU is a 4.31% portfolio stake first purchased in 2012. The original position was increased by over 30% in Q1 2013 at prices between $84 and $113 and another 30% in the following quarter at prices between $83 and $103. The stock currently trades at $227. Last seven quarters saw a combined ~20% selling. Mueffling is harvesting gains.

Willis Towers Watson plc (WLTW): The large 4.27% stake came about as a result of the merger between Willis Group Holdings and Towers Watson that closed on January 6, 2016. Cantillon’s large stake in Willis Group Holdings was converted to WLTW shares. There was a ~12% increase in Q3 2016 at prices between $120 and $133. The original position is from Q3 2013 and their overall cost-basis is ~$110 compared to the current price of ~$151. There was a ~17% trimming over the last five quarters.

Visa Inc. (V): V is a 4.13% stake established in Q4 2015 at prices between $70 and $80. It was increased by ~125% in 2016 at prices between $70 and $83. Q1 2017 saw another ~15% stake increase at prices between $78 and $90. The stock is now well above those ranges at $140. There was a ~17% selling over the last five quarters at prices between $90 and $135.

Intercontinental Exchange (ICE): ICE is a large ~4% of the portfolio stake established in Q4 2014 at prices between $39 and $45. The following two quarters saw the position almost doubled at prices between $44 and $48. There was another ~17% increase in Q4 2016 at prices between $52.50 and $60. The stock currently trades at $73.72. Last six quarters saw a combined ~17% trimming.

Note: Prices are adjusted for the 5-for-1 stock-split in October 2016.

ServiceMaster Global Holdings (SERV): The medium-sized 3.76% SERV position was purchased in Q1 2016 at prices between $35 and $42.50 and increased by ~55% over the next three quarters at prices between $32.50 and $41.50. It currently trades at $60.37. Last six quarters saw a ~17% reduction at prices between $36.50 and $59.50.

Note 1: Cantillon controls ~4.4% of ServiceMaster Global Holdings.

Note 2: ServiceMaster was taken private in 2007 in a private equity transaction. In June 2014, it had an IPO at $17 per share.

Ecolab Inc. (ECL): ECL is a 3.73% of the portfolio stake first purchased in 2012. The original position was increased by around 75% in Q1 2013 at prices between $72.50 and $80. Q4 2014 & Q1 2015 saw a combined one-third increase at prices between $99 and $117. The stock currently trades at ~$149. Last five quarters saw a combined ~17% trimming.

Zoetis Inc. (ZTS): The 3.69% ZTS stake was established during Q4 2015 and Q1 2016 at prices between $39 and $48. The next seven quarters had seen a ~18% reduction at prices between $45 and $72 and that was followed with a similar reduction last quarter at prices between $71 and $85. It currently trades at $92.49. Mueffling is harvesting gains. This quarter also saw a ~3% trimming.

Broadcom Inc. (AVGO): AVGO is a 3.64% of the portfolio stake established in Q1 2017 at prices between $174 and $227 and increased by ~55% in Q3 2017 at prices between $230 and $257. There was another ~20% stake increase last quarter at prices between $228 and $273. The stock currently trades at $220. This quarter saw minor trimming.

CME Group (CME): CME is a 3.62% of the 13F portfolio stake established in Q4 2014 at prices between $78 and $93. Q4 2015 saw a ~60% stake increase at prices between $87 and $100. The stock currently trades well above those ranges at ~$163. Last ten quarters have seen a combined ~20% selling.

American Tower (AMT): AMT is a ~3.60% position established in Q1 2016 at prices between $84 and $102 and increased by ~50% the following quarter at prices between $103 and $113. There was another ~150% increase in Q4 2016 at prices between $101 and $117. The stock currently trades at $150. Last six quarters saw a ~18% selling.

Becton Dickinson (BDX): BDX is a 2.87% of the portfolio stake established in Q4 2016 at prices between $163 and $180 and increased by ~30% the following quarter at prices between $165 and $185. The stock is now at $248. There was a ~17% trimming over the last five quarters.

Agilent Inc. (A): Agilent is a 2.51% of the US long portfolio position established in Q4 2015 at prices between $33.50 and $42.50. Q4 2016 saw a ~17% increase at prices between $43 and $48. The stock currently trades well above those ranges at $67.66. There was a ~15% reduction last quarter at prices between $65 and $75 and that was followed with a ~3% trimming this quarter.

Equifax (EFX): EFX is a 2.50% of the portfolio stake purchased in Q4 2016 at prices between $112 and $135. H1 2017 saw a ~80% stake increase at prices between $117 and $143 and that was followed with a ~130% increase in Q3 2017 at prices between $93 and $146. The stock is now at ~$128. Last three quarters have seen a combined ~12% trimming.

Sensata Technologies Holding N.V. (ST): ST is a 2.48% of the 13F portfolio position established in Q2 2014 at prices between $44 and $50. The first three quarters of 2015 saw the stake more than doubled at prices between $49 and $59. It currently trades at $55.82. Last six quarters have seen a ~19% trimming.

Cimpress NV (CMPR): CMPR is a ~2% of the portfolio position first purchased in Q3 2014. The bulk of the current stake was purchased the following quarter at prices between $54 and $76 and the stock is now at $144. The last two years have seen a combined ~20% selling at prices between $82 and $171.

Note: Cantillon controls ~4.2% of Cimpress.

Interactive Brokers Group Inc. (IBKR): IBKR is a 1.72% of the portfolio stake established in Q2 2017 at prices between $34 and $38 and increased by ~11% the following quarter. There was another ~25% increase last quarter at prices between $59 and $74. The stock currently trades at $60.98. There was a ~3% trimming this quarter

Taiwan Semiconductor (TSM): The 1.66% TSM stake was established in Q3 2017 at prices between $34.50 and $38.50. The position saw an almost two-thirds increase last quarter at prices between $40 and $46.50. It is now at $41.24. This quarter saw a ~3% trimming.

SS&C Technologies (SSNC): SSNC is a 1.54% of the portfolio position built in H2 2016 at prices between $28.50 and $33.50. Last quarter saw a ~75% stake increase at prices between $40.50 and $53.50 and it is now at $55.73. There was minor trimming this quarter.

Allergan plc (AGN): AGN is now a minutely small 0.37% of the portfolio stake. The original position was established in Q2 2016 at prices between $202 and $278 and increased by one-third the following quarter at prices between $231 and $260. The first three quarters of 2017 had also seen a ~16% stake increase at prices between $203 and $256. The position was sold down by ~80% this quarter at prices between $144 and $177. The stock is now at $186.

Credit Acceptance Corporation (CACC) and Verisign Inc. (VRSN): These small stakes (less than ~1.75% of the portfolio each) saw reductions this quarter.

The spreadsheet below highlights changes to Mueffling’s US stock holdings in Q2 2018:

William Von Mueffling - Cantillon Capital - Q2 2018 13F Report

Disclosure: I am/we are long AGN, INTC. 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.