Tweedy Browne Buys 2 Stocks, Adds to 3 in 2nd Quarter
Tweedy Browne (Trades, Portfolio), a near century-old firm that follows Ben Graham-style value principles, started positions in two stocks and almost doubled its existing stake Carnival Corp. (NYSE:CCL) during the second quarter.
A portfolio update, released Monday, showed that the firm bought shares of only five companies and trimmed the majority of its portfolio during the June quarter. In addition to the Carnival increase, it purchased Fox Corp. (NASDAQ:FOX) and Alcon Corp. (NYSE:ALC), and added to holdings in Baidu Inc. (NASDAQ:BIDU) and US Bancorp (NYSE:USB).
Of Tweedy Browne (Trades, Portfolio)'s 49 portfolio holdings, it reduced its weighting in 39. It made the largest reduction, of 90.58%, to AGCO Corp. (NYSE:AGC) and cut its Halliburton Co. (NYSE:HAL) position by 66.18%. Its second-largest position, Cisco Systems Inc. (NASDAQ:CSCO), shrank by 25.41%.
At second quarter-end, Tweedy Browne (Trades, Portfolio)'s portfolio was valued at $2.83 billion. Its largest weightings were in technology and financial services, which each represented about a third.
Tweedy Browne (Trades, Portfolio) oversees around $4.5 billion in assets through four unique mutual funds. Each of the portfolios is managed according to the same value principles with an emphasis on seeking undervalued stocks.
Although it bought only two stocks and reduced many during the second quarter, the firm wrote in its June letter that it remained interested in the market, eyeing some companies it considered underpriced:
"Equity market valuations remain full-to-high, particularly in higher quality businesses and in U.S. equities; however, a significant number of equities have not participated in this year's rebound," Tweedy Browne (Trades, Portfolio) wrote. "With many global equity share prices down over the last year, idea flow continues to pick up and a number of new ideas are under current consideration."
Buys
Fox Corp. (NASDAQ:FOX)
Tweedy Browne (Trades, Portfolio) purchased 58,250 shares of Fox Corp., giving it 0.08% portfolio weight. The stock's second-quarter share price averaged $36.
Fox Corp. has a market cap of $22.36 billion; its shares were traded around $36.00 Monday with a price-earnings ratio of 20.26 and price-sales ratio of 1.98. The trailing 12-month dividend yield of Fox Corp. is 0.64%. The forward dividend yield of Fox Corp. is 1.26%.
Alcon Inc. (NYSE:ALC)
Tweedy Browne (Trades, Portfolio) purchased 32,641 shares of Alcon Inc., giving it 0.07% portfolio weight. The stock's second-quarter share price averaged $59.
Alcon Inc. has a market cap of $28.07 billion; its shares were traded around $58.20 Monday with a price-sales ratio of 3.88.
Adds
Carnival Corp. (NYSE:CCL)
Tweedy Browne (Trades, Portfolio) increased its position by 92.26% to 149,825 shares. The holding had 0.25% portfolio weight. The stock's second-quarter share price averaged $52.
Carnival Corp has a market cap of $32.39 billion; its shares were traded around $45.21 with a price-earnings ratio of 10.61 and price-sales ratio of 1.58. The trailing 12-month dividend yield of Carnival Corp. is 4.42%. The forward dividend yield of Carnival Corp. is 4.35%. Carnival Corp. had an annual average earnings growth of 4.30% over the past 10 years.
Baidu Inc. (NASDAQ:BIDU)
Tweedy Browne (Trades, Portfolio) increased its position in Baidu Inc. by 64.78% to 930,874 shares. The holding represented 9.82% of the portfolio.
Baidu Inc. has a market cap of $35.05 billion; its shares were traded around $100.15 Monday with a price-earnings ratio of 11.56 and price-sales ratio of 2.23. Baidu Inc. had an annual average earnings growth of 38.6% over the past 10 years. GuruFocus rated Baidu Inc. the business predictability rank of 3-star.
US Bancorp (NYSE:USB)
Tweedy Browne (Trades, Portfolio) increased its position in US Bancorp by 0.95% to 837,925 shares. The holding represented 1.55% of the portfolio.
US Bancorp has a market cap of $83.6 billion; its shares were traded around $53.05 Monday with a price-earnings ratio of 12.49 and price-sales ratio of 3.79. The trailing 12-month dividend yield of US Bancorp is 2.78%. The forward dividend yield of US Bancorp is 2.67%.
See Tweedy Browne (Trades, Portfolio)'s portfolio here.
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This article first appeared on GuruFocus.
