Jeff Auxier (Trades, Portfolio) founded Auxier Asset Management and has managed the Auxier Focus Fund since its inception in 1999. Since inception, the fund has had returns 114.67 percentage points higher than the S&P 500.
In an interview with GuruFocus in 2012, Auxier told a story of when he cold-called Warren Buffett (Trades, Portfolio) in 1982, and actually received career advice from the most successful investor himself.
“My main concern was to find an enduring approach where I would be able to survive through the most challenging economic conditions,” Auxier said. “I was hooked on the value approach.”
While receiving such valuable advice after college was undoubtedly a boon for Auxier, it wasn’t his first encounter with an influential investor. At the age of 11, Auxier mowed the lawn of Robert Pamplin, the then-CEO of Georgia Pacific, which was a top-performing stock of the 1960s.
“Like Warren Buffett (Trades, Portfolio) says — chose your heroes carefully,” Auxier said. “It pays to get a start young with the right values and business principles.”
It’s clear that Auxier stands behind his investing approach — his entire retirement saving is invested in the Focus Fund, and Auxier has committed to not selling a share for as long as he is portfolio manager.
During the third quarter, Auxier bought two new stocks, and added to the fund’s positions in eight companies, notably GlaxoSmithKline (GSK, Financial), Bank of America (BAC, Financial), and Vitamin Shoppe (VSI, Financial). He sold out of eight positions, and reduced the stake in six companies, including AbbVie (ABBV, Financial) and DirecTV (DTV, Financial).
New buys
Auxier purchased one share of Berkshire Hathaway (BRK.A, Financial) Class A stock for $200,011.10.
The stock reached the $200,000 mark for the first time on Aug. 14, and reached an intra-day high of $201,775. Berkshire is a diversified holding company which includes insurance, utilities, energy, finance, manufacturing, and retail.
The stock has been up 24% since the beginning of the year, and may be slightly overvalued when compared to the Peter Lynch earnings line.
Auxier also purchased 6,150 shares in Newell Rubbermaid (NWL, Financial) for an average price of $33.06 per share. The fund had previously held 120,600 shares in the third quarter of 2011, and gradually sold the shares before selling out last quarter.
Newell Rubbermaid’s five business segments are home solutions, writing, tools, commercial products, and baby and parenting. A few of its most well-known brands include Rubbermaid, Calphalon, Goody, and Graco.
The company has been paying down its long-term debt since FY 2010. Diluted earnings per share has been increasing since FY 2011, and was $1.63 in FY 2013.
Sold out
Auxier sold out of seven positions; the largest impact to the portfolio was in Mercury General Corp (MCY, Financial). He sold 14,795 shares at an average price of $49.41 per share.
The following chart shows the historical holding in the company:
Mercury is an insurance holding company engaged mainly in writing automobile insurance in several states, but primarily in California.
Auxier also sold out of 3,968 shares of Allegion (ALLE, Financial) at an average price of $52.44. He had purchased the shares in the first quarter for about $50.24 per share.
Allegion specializes in mechanical hardware used in residential and commercial security such as locks, door closer and exit devices, steel doors, and frames. The company also utilizes electronic solutions such as digital and mobile solutions to make the hardware products more powerful.
Allegion spun off from Ingersoll Rand (IR, Financial) in December 2013. Allegion’s insiders have been buying the stock — on Aug. 8, five directors of the company each purchased 496 shares.
Other gurus who hold a position in the company include George Soros (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio), and Louis Moore Bacon (Trades, Portfolio).
Auxier also sold out of positions in Distil PLC (BBVKF, Financial), Discovery Communications (DISCA), Liberty Media Corporation (LMCK) (LMCA), and PRGX Global (PRGX).
