Tracking William Nygren's Harris Associates Portfolio - Q1 2022 Update

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John Vincent
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Summary

  • Harris Associates’ 13F portfolio value increased from $64.23B to $75.90B this quarter.
  • They increased Charter Communications, General Motors, Amazon.com, and Netflix while reducing Humana, Hilton Worldwide, and General Dynamics.
  • The top three positions are Alphabet, Fiserv, and Charter Communications, and they add up to ~13% of the portfolio.

Bags of fund, US USD dollar and golden eggs on a company summary report

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This article is part of a series that provides an ongoing analysis of the changes made to Harris Associates 13F stock portfolio on a quarterly basis. It is based on Harris Associates' regulatory 13F Form filed on 5/16/2022. William Nygren's 13F portfolio value increased from $64.23B to $75.90B this quarter. The portfolio is diversified with recent 13F reports showing around 200 positions. There are 58 securities that are significantly large (more than ~0.5% of the portfolio each) and they are the focus of this article. The largest five stakes are Alphabet, Fiserv, Charter Communications, HCA Communications, and Bank of America. They add up to ~18% of the portfolio. Please visit our Tracking William Nygren's Harris Associates Portfolio series to get an idea of their investment philosophy and our last update for the fund's moves during Q4 2021.

Harris Associates currently has ~$118B under management. Their flagship mutual funds are the Oakmark Fund (MUTF:OAKMX) incepted in 1991 and the Oakmark International (MUTF:OAKIX) incepted in 1992. Both funds have produced substantial alpha during their lifetimes: 12.94% annualized return compared to 10.58% for the S&P 500 index for OAKMX and 8.81% annualized return for OAKIX compared to 6.11% annualized for the MSCI World ex-US Index. The other mutual funds in the group are Oakmark Select (MUTF:OAKLX), Oakmark Equity and Income (MUTF:OAKBX), Oakmark Global (MUTF:OAKGX), Oakmark Global Select (MUTF:OAKWX), and Oakmark International Small Cap (MUTF:OAKEX).

Note 1: The top holdings in the Oakmark International Fund are not in the 13F report as they are not 13F securities. The positions are Bayer (OTCPK:BAYRY), Lloyds Banking Group (LYG), Allianz (OTCPK:ALIZF), Intesa Sanpaolo (OTCPK:ISNPY), BNP Paribas (OTCQX:BNPQF), Credit Suisse Group (CS), BMW (OTCPK:BMWYY), Mercedes-Benz Group (OTCPK:DDAIF), Glencore (OTCPK:GLCNF), and Prosus (OTCPK:PROSY).

Note 2: Although the stakes as percentage of the 13F portfolio are very small, Oakmark has significant ownership stakes in the following businesses: CDK Global (CDK), Envista Holdings (NVST), GoHealth (GOCO), Qurate Retail (QRTEA), and Vipshop Holdings (VIPS).

Stake Increases:

Fiserv, Inc. (FISV): FISV is a large (top three) 3.22% of the portfolio position primarily built over the last four quarters at prices between ~$96 and ~$111. The stock currently trades below the low end of that range at $89.26. There was a minor ~3% increase this quarter.

Charter Communications (CHTR): CHTR is a large (top three) 2.94% of the portfolio stake. It was established in 2015 when around 2M shares were purchased at prices between ~$150 and ~$190. 2017 saw a stake doubling at prices between ~$298 and ~$395. 2018 also saw a ~55% stake increase at prices between ~$260 and ~$390. The two years through Q4 2020 had seen a ~58% selling at prices between ~$275 and ~$680. There was a ~20% stake increase in H1 2021 at prices between ~$597 and ~$722. That was followed with a ~30% increase this quarter at prices between ~$545 and ~$648. The stock currently trades at ~$437.

General Motors (GM): GM is a 2.36% of the portfolio position. It is a very long-term stake. The original position was minutely small in 2007 and it was disposed the following year. In 2013, a huge ~70M share stake was established at prices between $27 and $41. The position size peaked at ~81M shares in 2015. The stake was sold down by ~25% in the 2016-2019 timeframe at prices between $28 and $46. That was followed with a ~45% reduction in the five quarters through Q2 2021 at prices between ~$18 and ~$64. There was a ~25% stake increase this quarter at prices between ~$40 and ~$66. The stock currently trades at $32.64.

Ally Financial (ALLY): ALLY is a 1.53% of the portfolio position first purchased in 2015 at prices between $18.50 and $24. Next year saw the position more than doubled at prices between $15.50 and $20.50. The ten quarters through Q2 2021 had seen a ~40% selling at prices between ~$12 and ~$55. The stock is now at $33.20. Last three quarters have seen minor increases.

Note: They have a ~7.5% ownership stake in Ally Financial.

Amazon.com (AMZN): The 1.46% of the portfolio AMZN stake was primarily built this quarter at prices between ~$136 and ~$170 and the stock currently trades well below that range at ~$109.

Netflix, Inc. (NFLX): NFLX is a 1.38% of the portfolio stake purchased in 2017 at prices between ~$131 and ~$200. Next year also saw a ~50% stake increase at prices between ~$210 and ~$410. There was a ~55% selling in 2020 at prices between ~$299 and ~$557. Q2 2021 saw a roughly one-third increase at prices between ~$485 and ~$555. This quarter saw another ~50% stake increase at prices between ~$331 and ~$597. The stock is now at ~$171.

Meta Platforms (META), previously Facebook: META is a 1.15% of the portfolio position. The stake saw a ~42% increase in Q1 2020 at prices between ~$146 and ~$223. The stock currently trades at ~$157. Last several quarters have seen only minor adjustments.

APA Corporation (APA), Altria Group (MO), BlackRock, Inc. (BLK), BorgWarner (BWA), Capital One Financial (COF), CBRE Group (CBRE), Goldman Sachs (GS), Interpublic Group (IPG), Intercontinental Exchange (ICE), LivaNova PLC (LIVN), Open Text Corp. (OTEX), Oracle Corp. (ORCL), Reinsurance Group of America (RGA), Ryanair Holdings (RYAAY), Salesforce (CRM), Wells Fargo (WFC), Willis Towers Watson (WTW), and Workday (WDAY): These small (less than 1.5% of the portfolio each) positions were increased this quarter.

Note: Although the position size relative to the 13F portfolio is very small, they have significant ownership stakes in APA Corporation and Reinsurance Group of America.

Stake Decreases:

Alphabet Inc. (GOOG) (GOOGL): GOOG is currently the largest 13F position by far at 6.76% of the portfolio. The bulk of the stake was purchased in 2014 at prices between ~$515 and ~$595. Next year also saw a ~20% stake increase at prices between ~$495 and ~$750. The two years through Q4 2020 had seen a ~28% selling at prices between ~$1054 and ~$1828. The stock currently trades at ~$2240. Last five quarters have seen only minor adjustments.

HCA Healthcare (HCA): HCA is now a 2.52% of the portfolio stake. A large position was built over the 2016-2017 timeframe at prices between $64 and $89. Q4 2018 saw that original stake reduced by ~50% at prices between ~$120 and ~$144. Next quarter also saw a ~15% stake reduction. There was a one-third increase in Q2 2020 at prices between $82 and $118. That was followed with a ~15% stake increase next quarter at prices between ~$94 and ~$138. The four quarters through Q3 2021 had seen a ~14% selling at prices between ~$124 and ~$262. The stock currently trades at ~$174. There was marginal trimming in the last two quarters.

Bank of America (BAC): BAC was a minutely small position in their first 13F filing in 1999. It became a significant part of the portfolio in 2011. The 2012 to 2015 timeframe saw the stake built from 9.8M shares to 138M shares at prices between ~$6 and ~$18. The next 3 years saw a ~40% reduction at prices between ~$12 and ~$33. 2019-2021 timeframe saw another ~40% selling at prices between ~$20 and ~$48. That was followed with a ~17% reduction this quarter at prices between ~$38 and ~$49. The stock is now at ~$32.85, and the stake is at 2.40% of the portfolio.

American International Group (AIG): AIG is a 2.30% of the portfolio position first purchased in 2012 at prices between ~$23 and ~$36. The stake was almost doubled over the next two years at prices between $35 and $56.50. 2016 saw a one-third selling at prices between $50 and $66. 2017-2018 timeframe saw a similar increase at prices between $37.50 and $67. The three quarters through Q3 2019 had seen a ~20% reduction at prices between $40 and $57.50. The stock is now at $52.15. Last several quarters have seen further trimming.

Keurig Dr Pepper (KDP): KDP is a 2.19% of the portfolio position established in Q3 2020 at prices between ~$27 and ~$31 and doubled next quarter at around the same price range. Q1 2021 saw a ~25% further increase at prices between ~$30.50 and ~$35.50. The stock currently trades at $34.94. There were minor increases in the last three quarters while this quarter there was a ~10% trimming.

Booking Holdings (BKNG): BKNG is now a medium-sized ~2% of the portfolio position. It was a minutely small stake first purchased in 2016 and was increased substantially next year at prices between $1465 and $2035. H1 2019 saw the stake almost doubled at prices between $1665 and $1880. H2 2019 had seen minor trimming. There was a ~25% stake increase in Q1 2020 at prices between ~$1152 and ~$2087. The four quarters through Q2 2021 had seen a ~20% trimming. The stock is currently at ~$1937. Last three quarters have seen only minor adjustments.

CNH Industrial (CNHI): CNHI is a 1.94% of the portfolio position purchased in Q4 2020 at prices between $7.75 and $13 and the stock currently trades at $12.82. Last five quarters saw a ~55% selling at prices between ~$11 and ~$17.

Note: They control ~7% of the business.

Citigroup Inc. (C): The 1.89% Citigroup position was built in 2014 at prices between ~$46 and ~$56. The stake was almost doubled over the next three years at prices between ~$37.50 and ~$76. Since 2018, there had been a combined ~30% selling at prices between ~$35 and ~$82. The stock currently trades at ~$48. Last six quarters have seen only minor adjustments.

Humana Inc. (HUM): The 1.76% of the portfolio HUM stake was built in Q1 2021 at prices between ~$375 and ~$448 and the stock currently trades at ~$449. The two quarters through Q3 2021 had seen a ~44% stake increase at prices between ~$389 and ~$471. This quarter saw a ~31% reduction at prices between ~$363 and ~$466.

Liberty Global (LBTYK): LBTYK is a 1.42% position established in 2017 at prices between $28 and $37. Next year saw a ~15% stake increase at prices between ~$20 and ~$37. Q2 & Q3 2019 had seen a ~30% selling at prices between $24 and $27.50 while the next quarter saw a similar increase at prices between $20.50 and $25. H1 2020 had seen a ~30% selling at prices between ~$15 and ~$23. The two quarters through Q1 2021 had seen a one-third increase at prices between ~$18.50 and ~$26.60. Last four quarters have seen a ~26% selling at prices between ~$24.50 and ~$30. The stock is now at $22.93.

Note: Oakmark has a ~24% ownership stake in Liberty Global.

TE Connectivity (TEL): TEL is a very long-term stake first purchased in 2011 in the high-20s price range. Recent quarters have seen minor selling. There was a 16% reduction in Q2 2020 at prices between ~$59 and ~$92. That was followed with a ~50% reduction over the last seven quarters at prices between ~$79 and ~$165. The stock currently trades at ~$118 and the stake is at 1.41% of the portfolio.

Hilton Worldwide (HLT): The ~1% of the portfolio HLT stake was built during the four quarters through Q1 2019 at prices between $66.50 and $85.75. There was a ~18% selling in Q1 2021 at prices between ~$99 and ~$127. This quarter saw another ~40% reduction at prices between ~$129 and ~$158. The stock currently trades at ~$114.

Constellation Brands (STZ): STZ is now a ~1% of the portfolio stake. The position saw a ~50% stake increase in Q1 2020 at prices between ~$106 and ~$208. The next three quarters had seen a ~23% selling at prices between ~$130 and ~$220. This quarter also saw a ~17% trimming. The stock currently trades at ~$235.

American Express (AXP), Berkshire Hathaway (BRK.B), Charles Schwab (SCHW), Comcast Corp. (CMCSA), ConocoPhillips (COP), CVS Health (CVS), DXC Technology (DXC), EOG Resources (EOG), Gartner Inc. (IT), General Electric (GE), General Dynamics (GD), Grupo Televisa (TV), Howmet Aerospace (HWM), Lear Corp. (LEA), Mastercard Inc. (MA), Regeneron Pharmaceuticals (REGN), Restaurant Brands (QSR), State Street Corp. (STT), Tenet Healthcare (THC), and Visa Inc. (V): These small (less than ~1.5% of the portfolio each) stakes were reduced during the quarter.

Note: Although the position sizes relative to the 13F portfolio are very small, they have significant ownership stakes in Grupo Televisa, Lear Corp. and Tenet Healthcare.

Below is a spreadsheet that shows the changes to William Nygren's Harris Associates 13F portfolio holdings as of Q1 2022:

William Nygren - Oakmark - Harris Associates' Q1 2022 13F Report Q/Q Comparison

William Nygren - Oakmark - Harris Associates' Q1 2022 13F Report Q/Q Comparison (John Vincent (author))

This article was written by

John Vincent profile picture
20.92K Followers
Focused on cloning strategies by analyzing 13F reports of a curated set of around fifty super-investors and generating Absolute Returns thru exploiting inefficiency, volatility, and momentum.
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Disclosure: I/we have a beneficial long position in the shares of AMZN, C, GOOGL, PROSY, TV either through stock ownership, options, or other derivatives. 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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