Tracking William von Mueffling's Cantillon Capital Management Portfolio - Q2 2019 Update

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

William von Mueffling's 13F portfolio value increased this quarter from $9.41B to $9.90B.

Broadcom, Becton Dickinson, Agilent and SS&C Technologies stakes were increased while dropping Intel and adding Brunswick.

The portfolio continues to be very concentrated with the top five positions accounting for ~28% 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 von Mueffling’s regulatory 13F Form filed on 07/26/2019. 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 for the fund’s moves during Q1 2019.

This quarter, von Mueffling’s 13F portfolio value increased ~5% from $9.41B to $9.90B. The number of holdings remained steady at 31. The portfolio continues to be heavily concentrated with the top five positions representing ~28% of the total 13F holdings. The largest stake is S&P Global which accounts for ~6.5% of the portfolio. The largest five positions are S&P Global, Alphabet Inc., Analog Devices, Fidelity National Information Services, and Visa.

New Stakes:

Brunswick Corp. (BC): BC is a small 1.13% of the portfolio stake established this quarter at prices between $41.50 and $54.50 and the stock currently trades near the middle of that range at $47.86.

Stake Disposals:

Intel Corp. (INTC): INTC was a 2.38% of the portfolio position established in Q2 2018 at prices between $48.50 and $57 and increased by ~70% next quarter at prices between $45 and $52.50. This quarter saw an about turn: the entire stake disposed at prices between $43.50 and $59. It is now at $51.59.

Stake Increases:

Broadcom Inc. (AVGO): AVGO is a 3.48% 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 in Q1 2018 at prices between $228 and $273. The stock currently trades at $301. There was a one-third reduction in Q3 2018 at prices between $202 and $251 while last quarter there was a ~10% stake increase at prices between $230 and $300. This quarter saw another ~20% stake increase at prices between $252 and $321.

Becton Dickinson (BDX): BDX is a 3.15% 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 $254. There was a ~22% selling over the six quarters through Q3 2018 at prices between $166 and $262. This quarter saw a ~20% stake increase at prices between $223 and $252.

Agilent Technologies Inc. (A): Agilent is a ~3% of the 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 $69.50. There was a ~15% reduction in Q1 2018 at prices between $65 and $75 and that was followed with a ~10% trimming over the next two quarters. This quarter saw an ~11% stake increase.

SS&C Technologies (SSNC): SSNC is a 2.48% of the portfolio position built in H2 2016 at prices between $28.50 and $33.50. Q1 2018 saw a ~75% stake increase at prices between $40.50 and $53.50 and that was followed with a ~37% increase in Q4 2018 at prices between $41.50 and $56. There was another ~20% stake increase this quarter at prices between $54 and $68. It is now at $60.49.

Stake Decreases:

S&P Global (SPGI) previously McGraw Hill Financial: SPGI is currently the largest position at 6.51% of the portfolio. It 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 has doubled and currently trades at ~$244. The nine quarters through Q3 2018 had seen a combined ~25% reduction at prices between $110 and $215. There were only minor adjustments in the last three quarters.

Alphabet Inc. (GOOG) (GOOGL): GOOG is von Mueffling’s second-largest position at ~6% of the 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. The two years through Q3 2018 had seen a combined one-third reduction at prices between $755 and $1,270. The stock currently trades at $1,250. von Mueffling is harvesting huge long-term gains. Last three quarters have also seen minor trimming.

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 buying was in Q4 2014 when the stake saw a ~20% increase at prices between $43 and $58. The stock currently trades at $122. It is von Mueffling’s third-largest position at 5.81% of the portfolio. The six quarters through Q3 2018 had seen a ~22% selling at prices between $76 and $102. Since then, there has only been minor adjustments.

Fidelity National Information Services (FIS): FIS was a minutely small position in Q1 2013. The following quarter saw the stake increased 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 ~$136. The two years through Q3 2018 had seen a ~43% reduction at prices between $74 and $110. It is von Mueffling’s fourth-largest position at 5.18% of the 13F portfolio.

Visa Inc. (V): V is a 4.67% 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 has doubled and it currently trades at ~$184. There was a ~23% selling over the last two years at prices between $124 and $175.

Willis Towers Watson plc (WLTW): The 4.67% 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 ~$199. There was a ~27% trimming over the last three years at prices between $117 and $192.

Ecolab Inc. (ECL): ECL is a 4.54% 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 ~$200. Last fifteen quarters saw a combined ~30% selling at prices between $103 and $200.

American Tower (AMT): AMT is a 4.42% 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 $205. Last ten quarters have seen a ~25% selling at prices between $104 and $218.

Zoetis Inc. (ZTS): The 4.25% ZTS stake was established during Q4 2015 and Q1 2016 at prices between $39 and $48. The next seven quarters had seen an ~18% reduction at prices between $45 and $72 and that was followed with a similar reduction in Q1 2018 at prices between $71 and $85. It currently trades at $115. von Mueffling is harvesting gains. Last two quarters have also seen minor trimming.

Intercontinental Exchange (ICE): ICE is a ~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 $89.59. The last ten quarters saw a combined ~23% selling at prices $57 and $87.

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

CME Group (CME): CME is a 3.70% 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 ~$201. Last three years had also seen a combined ~25% selling at prices between $85 and $195. This quarter also saw minor trimming.

CBRE Group Inc. (CBRE): The 3.60% stake in CBRE 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 ~$53. Last three years have seen a combined ~18% trimming.

Equifax (EFX): EFX is a 3.23% of the portfolio stake purchased in Q4 2016 at prices between $112 and $135. H1 2017 saw an ~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. Q3 2018 saw a ~30% stake increase at prices between $123 and $138. The stock is now at ~$142. Last three quarters have seen only minor adjustments.

VeriSign Inc. (VRSN): The 3.22% VRSN position saw a ~40% increase in Q4 2018 at prices between $134 and $165. The original stake was from Q3 2017 at prices between $93 and $106. The stock currently trades well above those ranges at ~$217. There was minor trimming in the last two quarters.

Thermo Fisher Scientific (TMO): TMO is a ~3% of the portfolio position established in Q3 2018 at prices between $206 and $249 and increased by ~90% next quarter at prices between $208 and $252. The stock currently trades above those ranges at $287.

TriNet Group Inc. (TNET): The 2.86% of the portfolio stake in TNET was established in Q2 2016 with the bulk purchased in the following two quarters at prices between $18.50 and $26. The stock has more than doubled and currently goes for ~$77. There was marginal reduction over the last two quarters.

Note: Cantillon controls ~6% of TriNet Group.

Aon plc (AON): The 2.80% AON position was increased by ~50% in Q2 2018 at prices between $135 and $145 and the stock is now at $195. There was a ~10% stake increase last quarter and minor trimming this quarter.

Sensata Technologies Holding plc (ST): ST is a 2.20% 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 ~$195. The last ten quarters saw a ~24% selling at prices between $112 and $195.

Fastenal (FAST) and Armstrong World Industries (AWI): These two positions were established in Q2 2018. The ~2% FAST stake was purchased at prices between $24 and $28 and the stock currently trades at $31.63. The small 1.28% AWI stake was purchased at prices between $55 and $65. The stock is now at ~$99. Last four quarters have seen only minor adjustments to these two stakes.

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

Facebook Inc. (FB): FB is a ~2% of the portfolio stake established in Q1 2018 at prices between $152 and $193 and increased by ~60% next quarter at prices between $155 and $202. The stock is currently at ~$200.

Taiwan Semiconductor (TSM): The 1.55% TSM stake was established in Q3 2017 at prices between $34.50 and $38.50. The position saw an almost two-thirds increase in Q1 2018 at prices between $40 and $46.50. It is now at $43.46.

Credit Acceptance Corporation (CACC), Interactive Brokers Group Inc.. (IBKR), Moody’s Corp. (MCO), and Primerica Inc. (PRI): These small stakes (less than ~1.5% of the portfolio each) saw minor trimming this quarter.

The spreadsheet below highlights changes to von Mueffling’s 13F stock holdings in Q2 2019:

William Von Mueffling - Cantillon Capital - Q2 2019 13F Report Q/Q Comparison

Disclosure: I am/we are long 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.