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 10/24/2018. 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 Q2 2018.
This quarter, Fisher’s 13F portfolio value increased ~7% from $77.02B to $82.37B. The number of holdings increased from 862 to 870. Significantly large positions increased from 65 to 69. The five largest individual stock positions are Amazon.com (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), Visa Inc. (NYSE:V), Microsoft (NASDAQ:MSFT), and Alibaba Group Holdings (NYSE:BABA). Together, they account for ~16% of the 13F stock portfolio.
Note 1: The portfolio saw a significant shift from Financial and Pharma Blue Chips to Materials stocks during the quarter. The last major shift in portfolio positioning happened in Q2 2017 when several Blue Chip European equities were purchased.
Note 2: Fisher manages ~50,000 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.
Amazon.com: AMZN is the largest individual stock position at 3.82% of the portfolio. The stake is from 2011, and the stock price has risen over seven-fold during the holding period: the cost basis is ~$200 compared to the current price of $1538. Q2 2016 saw a ~20% selling at prices between $586 and $728. There was another ~16% selling in Q2 2017 at prices between $885 and $1,011. The three quarters through Q1 2018 had seen a ~15% increase at prices between $935 and $1,600, while last quarter saw a similar reduction at prices between $1,370 and $1,750. There was a marginal increase this quarter.
Apple Inc.: AAPL is a top-three 3.38% 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 in Q2 2017 at prices between $141 and $156. The stock currently trades at ~$212. Last five quarters have seen a combined ~17% increase at prices between $145 and $230.
Visa Inc.: The Visa position was first purchased in 2012 at much lower prices compared to the current price of ~$134. The size of the stake has more than tripled in the last six years through incremental purchases almost every quarter. The position is now the third-largest stake at 3.30% of the portfolio.
Microsoft Corporation: MSFT is a top five 2.61% of the portfolio position. It is a very long-term stake that has been in the portfolio for well over a decade. The last major activity was a ~14% trimming in Q2 2017 at prices between $65 and $73. The stock is now at ~$104. Last five quarters have seen a combined ~18% increase at prices between $70 and $115.
Alibaba Group Holdings: BABA is a top-five position at 2.20% of the portfolio. The original position was from Q2 2015 at prices between $81 and $93. Q1 2017 saw a two-thirds increase at prices between $88 and $110. That was followed with a ~90% increase next quarter at prices between $107 and $144. The stock currently trades at ~$133. There was also a minor ~7% stake increase over the last four quarters.
Alphabet Inc. (GOOG) (GOOGL): GOOG was a very small position that was built up to a substantial 2% stake in 2011 at prices between $242 and $301. The stock has more than tripled and currently trades at $1,020. The position stands at 2.18% of the portfolio. There was a ~14% reduction in Q2 2017 at prices between $823 and $984. Q1 2018 saw a ~11% stake increase at prices between $1,000 and $1,176, and that was followed with minor increases in the last two quarters.
Pfizer Inc. (PFE): PFE is a very long-term 2.17% position that has been in the portfolio for well over a decade. The original stake was almost sold-out in the 2009-10 time frame and was rebuilt in the next two years at prices between $17.50 and $25. The stock is currently at $43.23. There was a ~9% stake increase in Q1 2018, and that was followed with minor increases in the last two quarters.
Taiwan Semiconductor (TSM): TSM is a very long-term 1.88% of the 13F 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 saw the position rebuilt (70% increase) at prices between $19 and $26. Q2 2017 also saw a ~22% increase at prices between $31.50 and $36.92. The stock currently trades at $36.33. There was a ~17% further increase in Q1 2018 at prices between $40 and $45, and that was followed with marginal increases in the last two quarters.
Intel Corporation (INTC): The bulk of the 1.39% portfolio stake in INTC was built in 2008 in the high-teens. The position has seen consistent incremental buying since 2013. There was a ~10% stake increase in Q1 2018 at prices between $42.50 and $52.50, and the stock is at $45.40. Last two quarters have also seen minor increases.
American Express (AXP): AXP has been in the portfolio since 2012. The original position was around 9M shares, and the current stake is 10.4M shares. Q3 2016 saw a ~10% reduction at prices between $59 and $66. There was a ~14% selling in Q1 2018 at prices between $88 and $102, and the stake is now at 1.34% of the portfolio. Last two quarters saw a combined ~7% stake increase. The stock is now at ~$101.
Total S.A. (TOT), BHP Billiton (BBL), Royal Dutch Shell (RDS.A), Vale S.A. (VALE), Petroleo Brasileiro (PBR), Rio Tinto (RIO), and Freeport-McMoRan (FCX): These positions saw large increases this quarter. The 1.27% TOT stake was mostly purchased this quarter at prices between $59 and $65. The stock is currently just below that range at $57.29. The small positions in Vale, Rio Tinto, and Freeport-McMoRan were all more than doubled while BHP Billiton, Royal Dutch, Shell, and Petroleo Brasileiro also saw substantial stake increases during the quarter.
Wal-Mart Stores (WMT): The bulk of the ~1% WMT position was purchased in Q2 2016 at prices between $65 and $73. Q4 2017 saw a ~45% stake increase at prices between $78 and $100, and that was followed with a ~12% increase next quarter. The stock is now at $99.80. Last two quarters also saw a combined ~8% increase. The buying pattern indicates a bullish bias.
Home Depot (HD): HD is a ~1% of the 13F portfolio position first purchased in 2012 at prices between $42 and $65. The three quarters through Q1 2017 had seen minor increases. There was an about-turn in Q2 2017: ~38% selling at prices between $146 and $159. Q4 2017 saw another ~28% reduction at prices between $150 and $190. There was another reversal next quarter: ~14% stake increase at prices between $172 and $207, and that was followed with minor increases in the last two quarters. The stock is now at ~$173.
Procter & Gamble (PG): PG is another long-term ~1% of the 13F 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. There has since been a one-third further increase through periodic buying. The stock currently trades at ~$88.
Tencent Holdings ADR (OTCPK:TCEHY): The ~1% TCEHY stake was mostly purchased in Q2 2017. The quarter saw a 13.5M share purchase at prices between $29 and $37. The stock is now at $32.15. Last five quarters have also seen incremental purchases. The current position is at ~18.9M shares.
UBS AG GRS (UBS): UBS is a ~1% of the 13F 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%. The three quarters through Q4 2017 had seen a two-thirds stake increase at prices between $12.25 and $23. The stock currently trades at $13.25. Last two quarters saw marginal trimming while this quarter saw a minor increase.
SoftBank Group ADR (OTCPK:SFTBY), Cisco Systems (CSCO), SAP AG ADR (SAP), PepsiCo Inc. (PEP), Oracle Corporation (ORCL), Siemens AG (OTCPK:SIEGY), Sanofi ADR (SNY), HSBC plc (HSBC), Novo Nordisk A/S ADR (NVO), Novartis AG ADR (NVS), Costco Wholesale (COST), LVMH Moet Hennessy ADR (OTCPK:LVMUY), L'Oreal Co. ADR (OTCPK:LRLCY), JPMorgan Chase (JPM), United Technologies (UTX), Merck Inc. (MRK), ING Groep NV ADR (ING), Anheuser-Busch InBev SA ADR (BUD), Chevron Inc. (CVX), GlaxoSmithKline plc ADR (GSK), BNP Paribas ADR (OTCQX:BNPQY), AstraZeneca plc (AZN), Exxon Mobil (XOM), Sumitomo Mitsui Financial (SMFG), Banco Santander SA ADR (SAN), ASML Holdings (ASML), Schlumberger Ltd. (SLB), and Intesa Sanpaolo Spa ADR (OTCPK:ISNPY): These small positions (less than ~1% of the 13F portfolio) were increased this quarter.
Johnson & Johnson (JNJ): JNJ is a ~2% 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 ~$138. There was a ~12% stake increase in Q1 2018, and that was followed with a similar reduction this quarter.
Vodafone plc (VOD), Infosys Inc. (INFY), HDFC Bank (HDB), Baidu Inc. (BIDU), CTrip.com International ADR (CTRP), JD.com (JD), Lloyds Banking Group plc ADR (LYG), Berkshire Hathaway (BRK.B), Bayer AG ADR (OTCPK:BAYRY), and Roche Holding Limited ADR (OTCQX:RHHBY): These small (less than ~1% of the portfolio each) positions saw reductions this quarter.
The portfolio has several positions in different ETNs and ETFs - they account for around 15% of the 13F portfolio. Fisher also had large stakes in the following businesses per the latest 13G filings: Stratasys Ltd. (SSYS) - 6%, Atlas Air (AAWW) - 4.4%, Wright Medical (WMGI) – 5.6%, and Veeco Instruments (VECO) - 3.1%.
Below are positions sized in the 0.1% to 0.5% range in the portfolio: ABB Ltd (ABB), ASE Technology (ASX), Adobe Inc. (ADBE), Ambev (ABEV), America Movil (AMX), Aspen Technology (AZPN), BASF SE ADR (OTCQX:BASFY), BP plc (BP), Banco Bilbao Vizcaya (BBVA), Banco Bradesco (BBD), Barclays plc (BCS), Boeing Company (BA), Boston Beer (SAM), Capital One Financial (COF), Chemed Corp. (CHE), Cleveland-Cliffs (CLF), Compagnie Financiere Richemont (OTCPK:CFRUY), CoreLogic Inc. (CLGX), Credit Agricole (OTCPK:CRARY), Domino's Pizza (DPZ), Dril-Quip Inc. (DRQ), East West Bancorp (EWBC), Fanuc Corp. (OTCPK:FANUF), General Electric (GE), Grupo Televisa SA (TV), HEICO Corp. (HEI), Hill-Rom Holdings (HRC), Integer Holdings (NYSE:ITGR), Itau Unibanco (ITUB), Eli Lilly (LLY), Lincoln Electric (LE), Littelfuse Inc. (LFUS), Mitsubishi Electric (OTCPK:MIELY), Morgan Stanley (MS), Murata Mfg (OTCPK:MRAAY), Nestle (OTCPK:NSRGY), NetEase Inc. (NTES), NuVasive Inc. (NUVA), Oceaneering Intl. (OII), Pegasystems Inc. (PEGA), Pool Corp. (POOL), Raymond James Financial (RJF), Reckitt Benckiser (OTCPK:RBGLY), SMC Corp Japan (OTCPK:SMCAY), SVB Financial (SIVB), Salesforce.com (CRM), Samsung Electronics (OTC:SSNLF), Schneider Electric (OTCPK:SBGSY), Scotts Miracle-Gro (SMG), Societe Generale France (OTCPK:SCGLY), Southern Copper (SCCO), Stifel Financial (SF), Teledyne (TDY), Terex (TEX), Tokyo Electronics (OTCPK:TOELY), Toro Co. (TTC), Unilever NV (UN), Verint Systems (VRNT), Vinci SA (OTCPK:VCISY), Vishay Intertechnology (VSH), West Pharmaceutical (WST), Yelp Inc. (YELP), Credicorp Ltd. (BAP), Helen of Troy (HELE), Steris plc (STE), and Core Laboratories (CLB).
The spreadsheet below highlights changes to Fisher’s 13F stock holdings (only positions that are over 0.5% of the 13F portfolio each are individually listed) in Q3 2018:
Disclosure: I am/we are long BABA, AZN, CSCO, INTC, JD, SFTBY, GE, TV. 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 discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.