Ninety-nine year-old value investing house Tweedy Brown Co. was light on buying in the first quarter, making significant increases to only five of its stocks.
The $3.03 billion portfolio Tweedy Browne (Trades, Portfolio) discloses listed 47 holdings at the end of the quarter, and the long-term strategists trimmed 34 positions while exiting none, resulting in 1% turnover. Tweedy Browne (Trades, Portfolio) has grown increasingly bullish on the technology sector, which represented 32.33%, compared to 19.06% three years ago. Its second-largest sector, financial services, occupied 29.04% of holdings and has encompassed more than 20% of space since the first quarter of 2012.
The firm describes its investing approach at “Ben Graham” and “value-oriented.” It buys stocks when they trade below fund managers’ estimates of intrinsic value, but focuses on other factors as well.
“As noted above, on top of all of this quantitative analysis, in assessing valuation we also examine a plethora of qualitative characteristics, and also examine what company insiders are doing with their own capital when it comes to purchasing (or selling) shares in their companies. In our opinion, determining whether a potential investment is a ‘value’ or not is more than simply a function of its price in relation to book value or its price in relation to earnings. We still strongly believe that price-sensitive security selection, combined with qualitative judgment, continues to offer investors the best path to long-term outperformance,” firm managers wrote in their first-quarter 2019 letter to shareholders.
In the first quarter, the firm increased its existing positions in US Bancorp (USB, Financial), Alphabet Inc. (GOOGL, Financial), Carnival Corp. (CCL, Financial), Royal Dutch Shell PLC (RDS.A, Financial) and Baidu Inc. (BIDU, Financial).
Tweedy Browne (Trades, Portfolio) increased its US Bancorp position by 53.77%, buying 290,255 shares. The holding totaled 830,055 shares, representing 1.32% of the portfolio. The stock’s first-quarter share price averaged $50.
US Bancorp has a market cap of $80.24 billion; its shares were traded around $50.40 with a price-earnings ratio of 12.06 and price-sales ratio of 3.62. The trailing 12-month dividend yield of US Bancorp is 2.80%. The forward dividend yield of US Bancorp is 2.92%.
Alphabet Inc. (GOOGL, Financial)
Tweedy Browne (Trades, Portfolio) increased its position in Alphabet by 4.26%, buying 5,638 shares. The holding totaled 135,081, representing 5.24% of the portfolio. The stock’s first-quarter share price averaged $1,127.
Alphabet Inc. has a market cap of $777.32 billion; its shares were traded around $1121.41 with a price-earnings ratio of 28.12 and price-sales ratio of 5.71. Alphabet Inc. had an annual average earnings growth of 15.10% over the past 10 years. GuruFocus rated Alphabet Inc. the business predictability rank of 3.5-star.
Carnival Corp. (CCL, Financial)
Tweedy Browne (Trades, Portfolio) increased its Carnival Corp. position by 3.73%, buying 2,805 shares. The holding totaled 77,930 shares, giving it 0.13% portfolio weight. The stock’s first-quarter share price averaged $55.
Carnival Corp. has a market cap of $36.96 billion; its shares were traded around $51.55 with a price-earnings ratio of 11.77 and price-sales ratio of 1.88. The trailing 12-month dividend yield of Carnival Corp. is 3.90%. The forward dividend yield of Carnival Corp. is 3.88%. Carnival Corp. had an annual average earnings growth of 4.30% over the past 10 years.
Royal Dutch Shell PLC (RDS.A, Financial)
Tweedy Browne (Trades, Portfolio) increased its Royal Dutch Shell position by 3.56%, buying 1,726 shares. The holding totaled 50,172 shares, representing 0.10% of the portfolio. The stock’s first-quarter share price averaged $62.
Royal Dutch Shell PLC has a market cap of $252.94 billion; its shares were traded around $62.28 with a price-earnings ratio of 11.38 and price-sales ratio of 0.70. The trailing 12-month dividend yield of Royal Dutch Shell PLC stocks is 6.04%. The forward dividend yield of Royal Dutch Shell PLC is 6.03%.
Tweedy Browne (Trades, Portfolio) increased its Baidu Inc. position by 3.48%, buying 48,329 shares. The holding totaled 1,437,015 shares, representing 7.81% of the portfolio. The stock’s first-quarter share price averaged $167.
Baidu Inc. has a market cap of $39.14 billion; its shares were traded around $111.82 with a price-earnings ratio of 12.93 and price-sales ratio of 2.49. Baidu Inc. had an annual average earnings growth of 38.60% over the past 10 years. GuruFocus rated Baidu Inc. the business predictability rank of 3-star.
See Tweedy Browne (Trades, Portfolio)’s portfolio here.
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