This article is part of a series that provides an ongoing analysis of the changes made to Generation Investment Management’s 13F portfolio on a quarterly basis. It is based on Al Gore’s regulatory 13F Form filed on 02/14/2020. Please visit our Tracking Al Gore’s Generation Investment Management Portfolio series to get an idea of their investment philosophy and our previous update for the fund’s moves in Q3 2019.
This quarter, Al Gore’s 13F portfolio value increased 7.5% from $14.54B to $15.64B. The number of positions increased from 36 to 39. The top five stakes are Alphabet (GOOG) (GOOGL), Charles Schwab (SCHW), Cognizant Technology (CTSH), Dentsply Sirona (XRAY), and Jones Lang LaSalle (JLL). They account for ~35% of the total 13F portfolio value. Generation Investment Management’s whitepapers and Al Gore’s books are good precursors for anyone interested in investing based on sustainability analysis.
New Stakes
Baxter International (BAX): BAX is a medium-sized 3.65% of the portfolio stake established this quarter at prices between $76.50 and $88.50 and the stock currently trades at $87.65.
Illumina Inc. (ILMN): ILMN is a small 1.24% of the portfolio position purchased this quarter at prices between $288 and $336 and the stock is now below that range at $276.
Penumbra Inc. (PEN) and CBRE Group (CBRE): These are minutely small (less than 0.5% of the portfolio each) stakes established this quarter.
Stake Disposals
Allegion Pub (ALLE): The ALLE stake saw a ~350% increase in Q2 2018 at prices between $75 and $87 and that was followed with a ~20% increase next quarter at prices between $77 and $91. Q1 2019 saw an about-turn: ~22% selling at prices between $81 and $94. That was followed with a ~60% selling over the last two quarters at prices between $92 and $112. The disposal this quarter was at prices between $100 and $126. The stock is currently at $123.
Stake Increases
Charles Schwab: SCHW is a large (top three) ~9% portfolio position. The stake is from Q4 2016 at prices between $31 and $40.50. Q2 2017 saw a two-thirds increase at prices between $37.50 and $43 and that was followed with a ~40% increase in the following quarter at around the same price range. The last five quarters have also seen a ~160% stake increase at prices between $35.50 and $51.50. The stock is now near the low end of those ranges at $34.80. For investors attempting to follow, SCHW is a good option to consider for further research.
Note: SCHW has seen a previous round-trip. A large ~7.2M share stake purchased in 2013 in the high-teens price range was disposed the following year at much higher prices.
Cognizant Technology and Nutanix (NTNX): These two positions established in Q2 2019 were increased over the last two quarters. The large (top three) 5.93% of the portfolio CTSH stake was purchased at prices between $57 and $75. There was a ~42% stake increase over the last two quarters at prices between $58.75 and $66.50. The stock currently trades near the low end of those ranges at $59.93. For investors attempting to follow, CTSH is a good option to consider for further research. NTNX is a medium-sized 2.90% position established at prices between $24.50 and $43.50 and it is now below that range at $21.64. The last two quarters saw marginal increases. Generation IM has an ~8.3% ownership stake in Nutanix.
Jones Lang LaSalle Inc.: JLL is a 5.32% long-term position first purchased in 2008. By 2013, that original position was doubled to a fairly large ~5% stake through consistent buying every year. The next two years saw selling: ~75% overall reduction at prices between $103 and $178. The pattern reversed in 2016: ~500% increase at prices between $91 and $141. That was followed with a ~30% increase in Q2 2017 at prices between $103 and $125. Since then, the activity has been minor. The stock currently trades at ~$149.
Note: Generation IM has a 9.3% ownership stake in Jones Lang LaSalle.
Henry Schein (HSIC): HSIC became the largest position in Q4 2017 as it saw a ~550% increase at prices between $50.50 and $68.50. There was another ~22% increase next quarter at prices between $47 and $63.50. The five quarters through Q3 2019 saw selling: a combined ~30% reduction at prices between $58 and $71. The stock is now at $59.25 and the stake at 4.40% of the portfolio. Generation IM has a ~7% ownership stake in Henry Schein. This quarter saw a ~3% stake increase.
Note: The prices quoted above are adjusted for the spinoff of Covetrus Inc. last January. Also, HSIC split 2-for-1 in September 2017.
Sensata Technologies (ST): The bulk of the ~4% ST position was purchased in Q2 2016 at prices between $33.50 and $39 and doubled over the next two years at higher prices. The stock currently goes for $38.37. Q4 2018 saw a ~28% increase at prices between $41 and $49.50. The last four quarters have seen only minor adjustments.
Note: Generation IM has a ~7.4% ownership stake in Sensata Technologies NV.
Aptiv plc (APTV) previously Delphi Automotive: APTV is a 3.59% position. It was first purchased in Q4 2016 at prices between $46 and $55. The stake has wavered. Recent activity follows: Q1 2019 saw a ~40% stake increase at prices between $60.50 and $82.50 and that was followed with another one-third increase next quarter at prices between $64 and $91. The stock currently trades at ~$78.50. The last two quarters have seen minor increases.
Note: The prices quoted above are adjusted for the Delphi Technologies spinoff in November 2017.
Cooper Companies (COO): The bulk of the ~3% position in COO was purchased in Q4 2016 at prices between $159 and $183. The original stake was doubled in Q1 2018 at prices between $218 and $251 and that was followed with a ~37% increase next quarter at prices between $218 and $237. The stock currently trades well above those ranges at ~$325. The last three quarters had seen a ~53% selling at prices between $246 and $342. Generation IM is harvesting gains. There was a marginal increase this quarter.
Note: Generation IM has a 3.1% ownership stake in Cooper Companies.
TE Connectivity (TEL): TEL is a medium-sized 3.30% position purchased in Q4 2018 at prices between $71 and $87 and the stock currently trades at $81.37. The last three quarters had seen only minor adjustments. This quarter saw an ~18% stake increase at prices between $85.50 and $96.
MercadoLibre (MELI): The 2.55% MELI stake was established in Q2 2018 at prices between $285 and $356 and it now goes for ~$628. The last four quarters had seen a ~42% selling at prices between $285 and $690. Generation IM is harvesting gains. This quarter saw a marginal increase.
Note: MELI had a previous round-trip: it was a very small 0.51% stake established in Q4 2017 at prices between $222 and $329 and disposed next quarter at prices between $315 and $414.
Salesforce.com (CRM): The original CRM stake was established in 2016 at prices between $60 and $84. The last quarter saw a stake doubling at prices between $140 and $160. The stock currently trades at ~$170 and the stake is at 2.29% of the portfolio. There was a marginal increase this quarter.
Equifax Inc. (EFX): The ~2% EFX stake was purchased in Q1 2019 at prices between $91 and $115 and the stock currently trades well above that range at $158. Q2 2019 saw a ~27% stake increase at prices between $116 and $136 while last quarter there was similar selling at prices between $135 and $147. This quarter saw a ~7% stake increase.
Twilio Inc. (TWLO) and Huazhu Group (HTHT): These two positions established last quarter saw increases this quarter. TWLO is a 2.11% of the portfolio stake established at prices between $107 and $150 and increased by ~260% this quarter at prices between $91 and $117. The stock currently trades at ~$106. For investors attempting to follow, TWLO is a good option to consider for further research. The minutely small 0.32% HTHT position was purchased at prices between $30 and $38.50 and increased by ~50% this quarter at prices between $32 and $38.50. It is now at ~$34.90.
Cerner Corporation (CERN): CERN is a 2.11% of the portfolio position. The stake was established in 2015 and doubled in Q1 2016 at prices between $52 and $60. Q4 2016 also saw another ~50% stake increase at prices between $47 and $62. There was a ~37% selling in Q4 2017 at prices between $64.50 and $73.50 and that was followed by a one-third reduction next quarter at prices between $56.50 and $73. The last four quarters had also seen a ~60% selling at prices between $49 and $76. This quarter saw an about-turn: ~50% stake increase at prices between $65 and $73.50. The stock currently trades at ~$72.50.
Credicorp Ltd. (BAP): BAP is a ~2% of the portfolio position established in Q2 2017 at prices between $152 and $183 and increased by ~22% in the following quarter at prices between $179 and $213. The four quarters through Q3 2018 had seen a combined ~44% increase at prices between $192 and $236. The stock is now at ~$192. Q1 2019 saw an ~18% selling at prices between $222 and $251. The last three quarters have seen only minor adjustments.
Becton Dickinson (BDX), Microchip Technology (MCHP), SPDR Trust (SPY), Stericycle Inc. (SRCL), and Waters Corp. (WAT): These very small (less than ~1.5% of the portfolio each) stakes were increased during the quarter.
Stake Decreases
Alphabet Inc.: GOOG is currently the largest position at ~9% of the portfolio. The bulk of the stake was established in the three quarters through Q1 2019 at prices between $975 and $1268. The last two quarters had also seen a ~45% stake increase at prices between $1110 and $1250. The stock currently trades at $1319. This quarter saw a ~7% trimming.
Dentsply Sirona: XRAY is a large (top three) ~6% portfolio stake built in 2014 at prices between $44 and $56. The position has wavered. Recent activity follows: Q1 2018 saw an ~18% stake increase and that was followed with a ~65% increase next quarter at prices between $42 and $51. Q3 2018 saw another ~25% increase at prices between $37.50 and $48.50. The stock currently trades at $45.32. Q2 2019 saw a ~20% selling at prices between $49 and $59 and that was followed with minor trimming over the last two quarters.
Note: Generation IM has a ~7.3% ownership stake in Dentsply Sirona.
Thermo Fisher Scientific (TMO): TMO is a fairly large 4.30% portfolio position first purchased in Q3 2016 and more than doubled the following quarter at prices between $141 and $159. Q2 2017 saw another ~20% increase at prices between $152 and $176. There was a one-third selling over the last four quarters at prices between $221 and $327. The stock currently goes for ~$313.
Texas Instruments (TXN): The vast majority of the ~4% TXN stake was purchased in Q4 2018 at prices between $88 and $109. The stock currently trades at $115. The last two quarters have seen a combined ~15% trimming.
Microsoft Corporation (MSFT): MSFT is a 2.76% portfolio position. The stake was first purchased in 2014 and more than doubled the following year at prices between $36 and $56. The position saw a ~50% selling in Q2 2017 at prices between $65 and $72.50 and that was followed with a ~25% reduction in Q4 2017 at prices between $74 and $87. The stock is now at ~$166. Q4 2018 saw a one-third reduction at prices between $94 and $116. This quarter saw another ~25% selling at prices between $135 and $159. Generation IM is harvesting gains.
Trane Technologies plc (TT) previously Ingersoll-Rand plc (IR): TT is a ~2% portfolio position first purchased in 2015 at prices between $51 and $71. The position has wavered. Recent activity follows: there was a ~17% increase in Q2 2018 at prices between $80 and $93 while Q4 2018 saw similar selling at prices between $86 and $106. The stock is now at ~$112. Last year saw a ~27% selling at prices between $93 and $135.
Note: Trane Technologies shareholders received approximately 0.88861 shares of the new Ingersoll-Rand (IR) for each share held in a transaction with Gardner Denver that closed earlier this month.
Analog Devices (ADI): ADI's position is now at 2.10% of the portfolio. It was established in Q2 2018 at prices between $87 and $102 and doubled next quarter at prices between $91 and $100. Q4 2018 saw another ~25% stake increase at prices between $78 and $94. The stock currently trades at ~$109. There was a ~50% selling in Q2 2019 at prices between $96 and $117 and that was followed with a similar reduction over the last two quarters at prices between $104 and $125.
Acuity Brands (AYI): AYI is a 1.71% of the portfolio stake purchased in Q1 2017 at prices between $199 and $240 and increased by ~85% the following quarter at prices between $163 and $204. The stock is currently well below those ranges at ~$101. There was a ~22% selling last quarter at prices between $120 and $140 and that was followed with a ~25% selling this quarter at prices between $115 and $138.
Note: Generation IM controls ~5% of AYI.
Applied Materials (AMAT): The small 1.65% AMAT stake was purchased in Q2 2019 at prices between $38.50 and $45.50 and it currently goes for ~$59. The last quarter saw a marginal increase while this quarter there was a ~8% trimming.
Automatic Data Processing (ADP): ADP is a 1.55% portfolio stake purchased in Q4 2017 at prices between $109 and $119 and increased by ~160% next quarter at prices between $108 and $124. The next two quarters had also seen a ~16% increase at prices between $114 and $151. The last four quarters saw a ~50% selling at prices between $122 and $173. That was followed with another one-third selling this quarter at prices between $156 and $172. The stock is now at $161.
Deere & Co. (DE): DE was a large top five 5% portfolio stake as of last quarter. The position was from 2015 at prices between $75 and $97. There was a two-thirds reduction over the first three quarters of 2017 at prices between $103 and $132. Q1 2018 saw another ~41% selling at prices between $148 and $172. The position was rebuilt over the next three quarters at prices between $131 and $162. The last quarter saw a ~11% trimming and that was followed with a ~85% reduction this quarter at prices between $163 and $180. The stock is now at ~$159.
Nvidia Corp. (NVDA): A 1.40% NVDA stake was established in Q4 2018 at prices between $127 and $289. The last quarter saw the position reduced by ~90% to a minutely small stake at prices between $149 and $185. The stock currently trades at $273. This quarter saw the position almost sold out at prices between $173 and $239.
Amazon.com (AMZN) and Taiwan Semi (TSM): These two very small (less than ~0.5% of the portfolio each) positions were reduced this quarter.
Kept Steady
None.
Below is a spreadsheet that highlights the changes to Al Gore's Generation Investment Management 13F stock portfolio as of Q4 2019:
