Tracking Tweedy, Browne Portfolio - Q2 2023 Update
Summary
- Tweedy, Browne's 13F portfolio value increased by 4% to $1.91B, with 46 holdings.
- Berkshire Hathaway is the largest position at 22% of the portfolio, followed by Alphabet, Johnson & Johnson, Coca-Cola FEMSA, and Ionis Pharma.
- New stakes include U-Haul Holding and Sealed Air, while Bank of America saw a minor increase and Berkshire Hathaway, Alphabet, and Johnson & Johnson saw minor decreases.
porcorex
This article is part of a series that provides an ongoing analysis of the changes made to Tweedy, Browne's 13F portfolio on a quarterly basis. It is based on Tweedy, Browne's regulatory 13F Form filed on 8/14/2023. Please visit our Tracking Tweedy, Browne Portfolio series to get an idea of their investment philosophy and our previous update for the fund's moves during Q1 2023.
This quarter, Tweedy, Browne's 13F portfolio value increased ~4% from $1.84B to $1.91B. The number of holdings increased from 44 to 46. The largest position is Berkshire Hathaway at ~22% of the portfolio. The largest five individual stock positions are Berkshire Hathaway, Alphabet, Johnson & Johnson, Coca-Cola FEMSA, and Ionis Pharma. Combined, they are at ~64% of the portfolio. 25 of the 46 13F stakes are significantly large (over ~0.5% of the 13F portfolio each) and they are the focus of this article.
Tweedy, Browne has released a number of investment research papers over the years and that is a valuable resource for anyone looking to learn from their value investing philosophy. Also, Christopher Browne authored the book "The Little Book of Value Investing", a great introduction.
Note: Tweedy, Browne's flagship Tweedy, Browne International Value Fund (MUTF:TBGVX), has a global orientation with non-US allocation at ~83% of the portfolio and cash at ~5%. The top five holdings are Nestle (OTCPK:NSRGY), Safran SA (OTCPK:SAFRY), TotalEnergies (TTE), Diageo plc (DEO), and BAE Systems (OTCPK:BAESY). Together, they are ~20% of the fund. As of 7/31/2023, the fund returned 11.31% for the year, compared to 15.98% for MSCI EAFE (Hedged to US$). Since inception (1993), annualized returns are at 8.49% compared to 6.60% for MSCI EAFE.
New Stakes:
U-Haul Holding (UHAL.B) and Sealed Air (SEE): U-Haul is a 1.15% of the portfolio position established this quarter at prices between ~$45 and ~$59 and the stock currently trades at $52.56. The 1.14% stake in SEE was purchased at prices between ~$38 and ~$48 and it is now at $36.63.
Stake Increases:
Bank of America (BAC): The very small 0.82% stake in BAC saw a minor increase this quarter.
Stake Decreases:
Berkshire Hathaway (BRK.A) (BRK.B): Berkshire Hathaway is a very long-term stake that has been in the portfolio since before the financial crisis. It is currently their largest position at ~22% of the portfolio. Back in 2009, it was a very small 0.60% of the portfolio position. The bulk of the current stake was purchased in 2010 and 2012 at prices between $65 and $90. Q3 2016 saw a ~42% reduction at prices between $142 and $151 while the pattern reversed next quarter: ~37% increase at prices between $143 and $167. The five quarters through Q3 2021 saw a ~15% selling at prices between ~$200 and ~$292. That was followed with a ~20% reduction during Q4 2022 at prices between ~$264 and ~$319. The stock currently trades at ~$358. There was minor trimming in the last two quarters.
Alphabet Inc. (GOOG) (GOOGL): GOOG is currently the second largest 13F stake at ~16% of the portfolio. It was first purchased in 2012 at much lower prices compared to the current price of ~$136. There was a one-third reduction over the last two quarters at prices between ~$83 and ~$110. There was a marginal reduction this quarter.
Johnson & Johnson (JNJ): JNJ is a large (top three) position in the portfolio at ~11%. It is a long-term stake. The position was built from 400K shares to just over 4.3M shares between 2009 and 2012 at prices between $48 and $72. Since then, the stake has seen minor selling in most quarters. Q4 2016 saw a ~20% reduction at prices between $111 and $120. That was followed with a ~17% selling during Q4 2022 at prices between ~$160 and ~$180. The share count is now at ~1.21M. The stock currently trades at ~$163. Tweedy, Browne is harvesting long-term gains from this position. There was minor trimming in the last two quarters.
Coca-Cola FEMSA (KOF): The ~8% KOF stake was built over the three quarters through Q2 2020 at prices between $38 and $65. Since then, the activity had been minor. Q4 2022 saw a ~18% reduction at prices between ~$58 and ~$70. The stock currently trades at ~$88. There was minor trimming in the last two quarters.
Ionis Pharmaceuticals (IONS): IONS is now a large 7.63% of the portfolio position. It was purchased in Q1 2022 at prices between ~$30 and ~$37. The stock currently trades at ~$41. There was a ~30% stake increase during Q4 2022 at prices between ~$37 and ~$47. The last two quarters saw marginal trimming.
FMC Corporation (FMC): FMC is a large 5.52% of the portfolio position established in Q3 2021 at prices between ~$88 and ~$109. There was a ~20% stake increase next quarter at prices between ~$88 and ~$110. Q4 2022 saw a ~15% reduction at prices between ~$106 and ~$134. The stock currently trades at ~$89. The last two quarters saw minor trimming.
Autoliv Inc. (ALV): The 4.54% ALV position was established in Q1 2020 at prices between ~$40 and ~$82, and the stock currently trades at ~$97. There was a ~10% trimming during Q4 2022 while in the last quarter there was a ~7% increase. This quarter saw a ~5% trimming.
American Express (AXP), AutoZone (AZO), Bank of New York Mellon (BK), Cisco Systems (CSCO), Concentrix Corp (CNXC), CNH Industrial (CNHI), Diageo plc (DEO), FedEx Corp (FDX), National Western Life (NWLI), Thor Industries (THO), Truist Financial (TFC), Unilever (UN) (UL), US Bancorp (USB), and Wells Fargo (WFC): These small positions (less than ~2.5% of the 13F portfolio each) were reduced during the quarter.
The spreadsheet below highlights changes to Tweedy, Browne's 13F stock holdings in Q2 2023:
Tweedy, Browne Portfolio - Q2 2023 13F Report Q/Q Comparison (John Vincent (author))
Source: John Vincent. Data constructed from Tweedy, Browne's 13F filings for Q1 2023 and Q2 2023.
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.
This article was written by
Analyst’s Disclosure: I/we have a beneficial long position in the shares of GOOGL, UHAL.B 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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