Dodge & Cox

Dodge & Cox

Last Update: 09-09-2016

Number of Stocks: 178
Number of New Stocks: 4

Total Value: $101,253 Mil
Q/Q Turnover: 6%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Dodge & Cox Watch

  • Railroad Companies Offer High Margin Potential

    As of Sept. 21, several companies in the railroad industry have an efficient business operation. Two companies, Canada Pacific Railway Ltd. (NYSE:CP) and Union Pacific Corp. (NYSE:UNP), have a selling, general & administrative expense to gross profit ratio of about 30%, which suggests durable competitive advantage. With low SGA expenses, these companies have potential for high profit margins.


    The efficiency ratio

      


  • 10 Stocks Dodge & Cox Keep Buying

    Dodge & Cox was founded in 1930 by Van Duyn Dodge and E. Morris Cox. The firm manages a portfolio composed of 178 stocks with a total value of $101,253 million. In both the first and second quarters, the firm bought shares in the following stocks.


    Apple Inc. (AAPL)

      


  • Dodge & Cox Trims Hewlett Packard Enterprise Stake

    Dodge & Cox, a firm that invests primarily in a diversified portfolio of equity securities, trimmed its stake in Hewlett Packard Enterprise (NYSE:HPE) by 7,747,840 shares for an average price of $17.51 per share during the second quarter.


    The trade had a -3.46% impact on Dodge & Cox’s portfolio. It now owns 216,321,878 shares of Hewlett Packard.

      


  • Dodge & Cox Exits Time Warner Cable, Buys MetLife

    Dodge & Cox was founded in 1930, by Van Duyn Dodge and E. Morris Cox. During the second quarter the guru’s most heavily weighted trades were as follows:


    The guru closed its stake in Time Warner Cable Inc. (TWC) with an impact of -3.65% on the portfolio.

      


  • Apache Announces Discovery of Oil in West Texas

    Apache Corp. (NYSE:APA), an independent energy company, announced the discovery of 2 billion to 3 billion barrels of oil in a West Texas field on Wednesday.


    The area, being referred to as “Alpine High,” is located near the Davis Mountains in Reeves County and has been previously overlooked due to the belief it would not be fit for hydraulic fracturing. According to Apache, the find could be worth at least $8 billion and has the potential to become one of the biggest energy finds of the past decade.

      


  • Westport's Top 7 Transactions in 2nd Quarter Were Reductions

    Westport Asset Management (Trades, Portfolio)’s top seven transactions in the second quarter were reductions of stakes in its portfolio.


    In its largest transaction of the quarter, the firm sold nearly 30% of its holding in Universal Health Services Inc. (NYSE:UHS), a Pennsylvania-based hospital management company, selling 170,564 shares for an average price of $131.77 per share. The deal had a -3.33% impact on the portfolio.

      


  • Bill Gates Foundation Traded in 2 Companies in 2nd Quarter

    Bill Gates (Trades, Portfolio)’ Bill & Melinda Gates Foundation reduced three positions and added to two in the second quarter.


    The foundation sold more than 7% of its stake in Warren Buffett (Trades, Portfolio)’s and Charlie Munger (Trades, Portfolio)’s Berkshire Hathaway (NYSE:BRK.B), the Omaha, Nebraska-based conglomerate. The foundation sold 5 million shares for an average price of $142.94 per share. The transaction had a -4.13% impact on the portfolio.

      


  • 6 Stocks With Growing Yields

    Thanks to GuruFocus’ All-In-One Screener, we can highlight stocks that have a five-year growing dividend yield with strong profitability and a long-term track record of solid returns and growing asset value.


    Agrium Inc. (AGU) has a dividend yield that during the last five years has grown by 105.20%. The yield is now 3.86% with a payout ratio of 56%. The company has a 10-year asset growth rate of 21%, supported by return on assets (ROA) of 15% that during the last 10 years has had a median value of 6.67%.

      


  • Joel Greenblatt Buys Fox, ConAgra and Intuit

    During the second quarter, Joel Greenblatt (Trades, Portfolio) of Gotham Asset Management LLC acquired three new holdings. They are Twenty-First Century Fox Inc. (NASDAQ:FOXA), ConAgra Foods Inc. (NYSE:CAG) and Intuit Inc. (NASDAQ:INTU).


    Greenblatt is the founder and portfolio manager of Gotham Asset Management. He is the creator of Magic Formula Investing, which emphasizes high return on capital (ROC) and earnings yield. He also founded the New York Securities Auction Corp. (NYSAC) and is an adjunct professor at Columbia Business School. The firm holds stock in 935 companies and is worth $8.3 million. The turnover rate is 35%.

      


  • Akre Capital Buys Fortive, Sells Arlington

    During the second quarter, Akre Capital Management LLC acquired one new holding and sold out of another. The fund bought Fortive Corp. (NYSE:FTV) and sold Arlington Asset Investment Corp. (NYSE:AI).


    Chuck Akre (Trades, Portfolio) founded Akre Capital, where he serves as CEO, in 1989. The fund is team managed. Their investment philosophy is called the “three-legged stool” approach. This approach examines a company’s growth in book value over time, its management and its ability to reinvest its free cash flow in a manner that continues to earn above-average returns. The fund holds stock in 27 companies with a toal size of $4.9 billion. The turnover rate is 16%.

      


  • 6 Stocks Trading Below the Peter Lynch Value

    According to GuruFocus' All-in-One Screener, several gurus are focusing on stocks whose Peter Lynch fair value is far above the current price. The following stocks are trading with wide margins of safety and at least five gurus are shareholders.


    Ryanair Holdings PLC ADR. (RYAAY) is trading at about $72 per share, and the Peter Lynch value gives the stock a fair price of $98.5, giving investors a margin of safety of 25%.

      


  • Dodge & Cox Comments on Goldman Sachs

    Goldman Sachs (NYSE:GS) (2.5% of the Fund) is a leading global investment bank, securities broker, and investment manager that provides financial services to a diversified client base that includes corporations, financial institutions, governments, and high-net-worth individuals. Since the financial crisis, Goldman Sachs has deleveraged its balance sheet, shed risky assets, and increased its liquidity. As European competitors (e.g., Credit Suisse, UBS, Royal Bank of Scotland) continue to cut costs and retreat from investment banking, Goldman has an opportunity to further increase its market share in many key businesses. While regulatory requirements have increased, this should reduce the probability of large trading losses. Finally, although market turns can be sudden and difficult to predict, Goldman Sachs has demonstrated an ability to remain profitable: over the past 16 quarters, its return on common equity has averaged an impressive 10%.


    Continuing macroeconomic uncertainty has led to diminished primary debt and equity issuance and weaker secondary market trading conditions. Many of Goldman Sachs’ key clients, such as hedge funds and active asset managers, are experiencing net asset outflows. In this period of slower activity, the company has maintained its global network while downsizing naturally through attrition. The weak operating environment and concerns about Brexit have weighed on the stock, which was down 17% during the first half of 2016. However, after carefully analyzing the company’s risks and opportunities, we recently added to Goldman Sachs because it is an increasingly dominant player, has a highly profitable business, and trades at an attractive 0.9 times tangible book value.

      


  • Dodge & Cox Comments on Union Pacific

    While scores of railroads once operated in the United States, the industry is now concentrated: there are two major railroad lines east of the Mississippi and two in the West. We recently initiated a position in Union Pacific (NYSE:UNP), which owns an irreplaceable railroad franchise covering 23 western states.


    The North American railroad industry has many attractive characteristics: companies operate in regional duopolies and have high recurring revenue, substantial ability to control their costs, and extremely high barriers to entry. Union Pacific has the opportunity to increase its earnings as a result of growth in its domestic intermodal business, as well as a construction and housing recovery in the West. In addition, continued growth of the Mexican economy and increased trade with the United States should benefit its U.S.-Mexico business. With low leverage and a projected reduction in capital expenditures, management has the ability to increase share buybacks over our investment horizon.

      


  • Dodge & Cox Comments on Bank of America

    The largest bank in the United States by deposits, Bank of America (NYSE:BAC) has leading positions in the lines of business that comprise the majority of its revenues, including consumer banking and wealth management. Since the financial crisis, Bank of America has gained market share in its core businesses and navigated ever tougher regulatory requirements, while increasing capital and liquidity. As a part of its restructuring plan, management has simplified the business, reduced expenses, and implemented a more customer-focused strategy. Longer term, improved fundamentals and potential cyclical tailwinds (e.g., additional loan growth, higher rates, increased capital markets activity) could produce a significantly higher return on assets, as well as multiple expansion, dividend increases, and/or share repurchases.


    Bank of America—trading at 0.8 times tangible book value and nine times forward earningsb—has one of the lowest valuations among its peers. While a prolonged low interest-rate environment would continue to pressure net interest margins and profitability, we believe the bank’s inexpensive valuation, strong business franchises, and capable management team make it a compelling investment opportunity. Hence, we added to the Fund’s position in Bank of America, which comprised 3.2% of the Fund on June 30.

      


  • Dodge & Cox Stock Fund 2nd Quarter Shareholder Letter

    Market Commentary


    During the first half of 2016, global equity markets were volatile and the U.S. equity market emerged as one of the best performing developed markets. In January and February, concerns about China’s economic outlook, low oil prices, and the trajectory of the global economy led to a steep decline in equity prices. The U.S. market rebounded sharply and was approaching an all-time high until the United Kingdom voted on June 23 to leave the European Union (“Brexit”), triggering a “flight to safety.” Following the vote, global equity markets declined sharply, U.S. government bonds rallied, and the U.S. dollar strengthened significantly against several major currencies, especially the British pound. The S&P 500 subsequently recovered to end the first half of the year up 4%.

      


  • Priceline: The Power of Earnings

    If you know nothing else about The Priceline Group Inc. (NASDAQ:PCLN), you probably know it as a company that does not split its shares. That’s apparent from a share price of more than $1,400, and behind the big share price stands a big travel company that brings in big earnings.


    The Priceline Group website

      


  • Is Now the Time to Invest in Motorcycle Companies?

    The motorcycle industry and the oil industry have an interesting relationship.


    When gas prices are high, many consumers turn to motorcycles to bring their transportation budgets under control. They will sometimes choose other options, such as riding bicycles, walking or taking public transportation, but many consumers prefer the freedom of personal vehicle ownership; thus, when gas prices are high and cars are seen as too expensive to operate, sales of fuel-efficient motorcycles go up, sometimes way up.

      


  • Van Den Berg's Best Investments of 2nd Quarter

    Arnold Van Den Berg is a value investor who has been managing Century Management since its founding in 1974. During the second quarter, the guru raised several stakes, and the following are the ones with the highest performances since those buys.


    Liberty Media Corp. (LSXMK)

      


  • Dodge & Cox Comments on Union Pacific

    While scores of railroads once operated in the United States, the industry is now concentrated: there are two major railroad lines east of the Mississippi and two in the West. We recently initiated a position in Union Pacific (NYSE:UNP), which owns an irreplaceable railroad franchise covering 23 western states.


    The North American railroad industry has many attractive characteristics: companies operate in regional duopolies and have high recurring revenue, substantial ability to control their costs, and extremely high barriers to entry. Union Pacific has the opportunity to increase its earnings as a result of growth in its domestic intermodal business, as well as a construction and housing recovery in the West. In addition, continued growth of the Mexican economy and increased trade with the United States should benefit its U.S.-Mexico business. With low leverage and a projected reduction in capital expenditures, management has the ability to increase share buybacks over our investment horizon.

      


  • Dodge & Cox Comments on Goldman Sachs

    Goldman Sachs (NYSE:GS) (1.9% of the Fund) is a leading global investment bank, securities broker, and investment manager that provides financial services to a diversified client base that includes corporations, financial institutions, governments, and high-net-worth individuals. Since the financial crisis, Goldman Sachs has deleveraged its balance sheet, shed risky assets, and increased its liquidity. As European competitors (e.g., Credit Suisse, UBS, Royal Bank of Scotland) continue to cut costs and retreat from investment banking, Goldman has an opportunity to further increase its market share in many key businesses. While regulatory requirements have increased, this should reduce the probability of large trading losses. Finally, although market turns can be sudden and difficult to predict, Goldman Sachs has demonstrated an ability to remain profitable: over the past 16 quarters, its return on common equity has averaged an impressive 10%.


    Continuing macroeconomic uncertainty has led to diminished primary debt and equity issuance and weaker secondary market trading conditions. Many of Goldman Sachs’ key clients, such as hedge funds and active asset managers, are experiencing net asset outflows. In this period of slower activity, the company has maintained its global network while downsizing naturally through attrition. The weak operating environment and concerns about Brexit have weighed on the stock, which was down 17% during the first half of 2016. However, after carefully analyzing the company’s risks and opportunities, we recently added to Goldman Sachs because it is an increasingly dominant player, has a highly profitable business, and trades at an attractive 0.9 times tangible book value.

      


  • Dodge & Cox Comments on Barclays

    Barclays (NYSE:BCS) is a UK-domiciled bank with a premier retail and corporate franchise in the United Kingdom, a strong transatlantic corporate and investment bank, and a leading position in credit cards within Europe. Understandably, the bank has been at the center of Brexit concerns. Political and regulatory uncertainty could lead to slower economic growth, weaker property prices, and low interest rates, all of which would be negative for bank profits. The investment bank would face higher costs if it must relocate employees and operating entities to continental Europe.


    In the face of these challenges, Barclays—which has a new management team that we regard highly—has taken significant steps to focus on its core businesses and strengthen its balance sheet. The company has sold or shut down several “non-core” units, including its retail operations in Portugal and Italy and wealth management in Asia. Barclays also intends to sell its 62.3% stake in Barclays Africa. The profitability of its UK retail bank has been masked by elevated legal settlements related to past conduct. These costs are declining, and in turn, earnings should improve. In the investment bank, Barclays has exited nine countries, shed assets, and cut expenses. The combination of business scope reduction, cost cuts, and lower asset levels has enabled the company to increase capital. Its core equity capital ratio, a measure of its financial resilience, has improved from 9.1% in December 2013 to 11.3% as of March 2016.

      


  • Dodge & Cox Global Stock Fund 2nd Quarter Commentary

    M A R K E T C O M M E N TA RY

      


  • Dodge & Cox Stock Fund 2nd Quarter Commentary

    M A R K E T C O M M E N TA RY

      


  • Top Gurus Pour Heavy Capital in Major Technology Stocks

    Among all stocks listed on the Standard & Poor’s 500 index, technology stocks have high ownership among gurus, according to the S&P 500 Guru Grid. With a combined rating of 169%, Microsoft Corp. (NASDAQ:MSFT) has the highest combined weighting of all gurus among S&P 500 stocks. Alphabet Inc. (GOOGL) and Apple Inc. (NASDAQ:AAPL) have the second- and third-highest combined weightings. Although these technology companies are heavily owned by gurus, the top two technology stocks featured major sellouts during the first half of the year.


    More than just a grid of stocks

      


  • Under Armour's P/S Ratio Near Its 10-Year Low

    Under Armour Inc. (NYSE:UA) is traded at P/S ratio of 3.66, close to its 10-year low of 3.56. The company is owned by eight gurus.


    Under Armour has a market cap of $16.74 billion; its shares were traded around $38.32 with a P/E ratio of 64.64 and P/S ratio of 3.67. Under Armour had an annual average earnings growth of 23.50% over the past 10 years. GuruFocus rated Under Armour the business predictability rank of 5-star.

      


  • Dodge & Cox Buys Union Pacific, American Express

    Dodge & Cox was founded in 1930 by Van Duyn Dodge and E. Morris Cox. During the first quarter the fund bought shares in the following stocks.


    It increased its shares in Union Pacific Corp. (UNP) by 4,160% with an impact of 0.93% on the portfolio.

      


  • Express Scripts: Is This a Value Investing Opportunity or a Legal Quagmire?

    You will have needed a pill or two if you’ve owned Express Scripts Holding Co. (NASDAQ:ESRX) over the past year — with or without the benefit of a pharmacy benefit manager (which is Express Scripts' line of business).


    ESRX low p/s

      


  • Dodge & Cox: Staying the Course in Value Investing

    In 2015, growth stocks in the United States and around the world outperformed value stocks by one of the widest margins since the global financial crisis. Although value stocks have outperformed growth stocks for extended periods over most of the last 90 years, the decade 2005-2015 has been one of the few ten-year periods in which value has lagged growth.

      


  • Bruce Berkowitz Buys Bank of America, Sells Leucadia National

    Bruce Berkowitz (Trades, Portfolio) is the founder and the managing member of the Fairholme Fund (Trades, Portfolio). During the first quarter he traded the following stocks:


    The guru increased his shares in Bank of America Corp. (BAC) by 119.31% with an impact of 3.81% on the portfolio.

      


  • Leucadia Opens Positions in FedEx, Adobe System, Broadcom

    Leucadia National (Trades, Portfolio) bought shares in the following stocks in the first quarter:


    Leucadia bought 6,100 shares in FedEx Corp. (FDX) with an impact of 0.14% on the portfolio.

      


  • John Paulson Trims Time Warner Cable, Starwood Hotels

    John Paulson (Trades, Portfolio) is the president and portfolio manager of Paulson & Co. Inc. During the first quarter he reduced or closed his shares in many stocks.


    The investor reduced his stake in Time Warner Cable Inc. (TWC) by 69.18% with an impact of -4.64% on the portfolio.

      


  • Fairholme Fund Sells Bank of America, Leucadia National

    Fairholme Fund (Trades, Portfolio) is managed by its founder Bruce Berkowitz (Trades, Portfolio). For the 10-year period after inception in 1999, the fund gained 253% while the Standard & Poor's lost money. During the first quarter the fund traded some stocks as follows:


    It exited its position in Bank of America Corp. (BAC) with an impact of -7.44% on the portfolio.

      


  • UnitedHealth’s Obamacare Changes to Affect Healthcare Sector

    UnitedHealth (NYSE:UNH) reported its first quarter earnings results on April 19. UnitedHealth is the Dow Jones Industrial Average’s only healthcare stock focused primarily on healthcare plans. Following its early morning earnings release, the company reported a gain for the day of 2.1%.


    Favorable market trading was led by a revenue and earnings beat for the first quarter. UnitedHealth reported revenue of $44.53 billion, beating analysts’ estimates by $570 million and reporting a year-over-year gain of 24.5%. EPS of $1.81 also beat analysts’ expectations and reported a positive gain of 17% year over year.

      


  • Dodge & Cox Funds' 1st Quarter 2016 Global Stock Fund Commentary

    The Dodge & Cox Global Stock Fund had a total return of –1.3% for the first quarter of 2016, compared to –0.3% for the MSCI World Index.


    Market Commentary

      


  • Dodge & Cox Funds' 1st Quarter 2016 Commentary

    The Dodge & Cox Stock Fund had a total return of –1.0% for the first quarter of 2016, compared to 1.3% for the S&P 500 Index.


    Market Commentary

      


  • Dodge & Cox Trims Stakes in Pfizer, GE, eBay, Microsoft

    Dodge & Cox added three new stakes to its portfolio in the fourth quarter, but the transactions that had the greatest impact were the guru's sales of portions of existing stakes.


    Dodge & Cox’s most noteworthy fourth-quarter transaction was the sale of more than 95% of its stake in Pfizer Inc. (NYSE:PFE), a pharmaceutical company based in Groton, Connecticut. The guru sold 43,023,258 shares for an average price of $33.17 per share. The deal had a -1.36% impact on Dodge & Cox’s portfolio.

      


  • 5 Most Popular S&P 500 Stocks

    The following were five of the most popular Standard & Poor's 500 stocks among the gurus during the fourth quarter, according to results from GuruFocus’ All-in-One Screener.


    Apple (NASDAQ:AAPL)

      


  • Dodge & Cox: Value Investing in 2016

    Value managers Diana Strandberg and Charles Pohl discuss their fund's underperformance of the S&P 500 as growth surpassed value in recent years. The result has been more opportunities arising, particularly in financials, energy and emerging markets.


    "What I'd note is, conditions can change direction quickly and so we find that too many investors jump in and out at just the wrong time, and we think that having patience and persistence in retaining a long-term view are essentials to long-term investing success," Strandberg said.

      


  • Charles Brandes' Top Buys During the 4th Quarter

    Charles Brandes (Trades, Portfolio), chairman of Brandes Investment Partners, increased his stakes in many stocks in the fourth quarter.


    He raised his stake in Credit Suisse Group AG (CS) by 121.44%. The deal had an impact of 0.52% on the portfolio.

      


  • Fairholme Fund Cuts Bank of America, Buys Lands' End

    Fairholme Fund (Trades, Portfolio) is managed by its founder, Bruce Berkowitz (Trades, Portfolio). In the 10-year period after inception in 1999, the fund gained 253% while the Standard & Poor's lost money. During the fourth quarter Berkowitz traded many stocks.


    The investor reduced its stake in Bank of America Corp. (BAC) by 71.16%; the deal had an impact of -15.61% on the portfolio.

      


  • Dodge & Cox Comments on HP Inc.

    As the leader in printing and personal computer sales globally, HP Inc. (NYSE:HPQ)’s key challenge is declining revenues. Partly due to the stronger U.S. dollar, consensus estimates have the company’s sales declining approximately 10% in 2016. Many investors believe a shrinking market for hardware and ink may be too difficult to overcome; we believe this view of the company’s prospects is too pessimistic. HP’s management is aggressively cutting costs and has plans to introduce more new products. For example, HP has portions of its printing business (e.g., high-end graphics production) that are currently growing and may increase share in the established copier market and in the more nascent 3D print market. Moreover, the company generates robust free cash flow. Trading at seven times forward estimated earnings, HP remains an attractive investment opportunity with strong business prospects given its large valuation discount to the overall market.


    From Dodge & Cox Stock Fund annual commentary for 2015.

      


  • Dodge & Cox Comments on Hewlett Packard Enterprise

    After providing strong returns in 2013 and 2014, Hewlett-Packard was the Fund’s largest detractor from results during 2015. Hewlett-Packard recently split into two entities—Hewlett Packard Enterprise (NYSE:HPE) and HP Inc. (NYSE:HPQ)—which should result in greater focus and flexibility for each company to achieve its strategic goals. To assess secular challenges and evaluate the risks and opportunities of each stand-alone business, we met numerous times with their management teams and competitors and spoke with industry consultants. As a result, we added to the Fund’s positions in both companies. On December 31, Hewlett Packard Enterprise was a 2.5% position and HP Inc. was a 1.8% position in the Fund.


    Hewlett Packard Enterprise, one of the largest vendors in information technology (IT), consists of the enterprise technology infrastructure, software, and services segments of the old Hewlett-Packard. We acknowledge the company faces headwinds: the shift to the cloud has negatively impacted all on-premise IT vendors, continued public cloud adoption will likely erode the company’s market share, and competition is keen. Despite these risks, we believe Hewlett Packard Enterprise is an attractive investment due to its strong market positions across its portfolio (e.g., top provider of servers, number two position in IT services), scale advantages, and opportunities to improve its margin structure. Meg Whitman—the CEO of Hewlett Packard Enterprise—has overseen sound acquisitions (e.g., 3Par), new product launches, and cost reduction programs during her tenures at Hewlett-Packard and eBay. Management is actively cutting costs and retooling its product and service offerings to improve the company’s competitiveness. Margins in the Enterprise Services segment should expand as the company optimizes its contract mix and delivery models. The company trades at a compelling valuation (eight times forward estimated earnings), which is among the lowest in the S&P 500.

      


  • Dodge & Cox Comments on American Express

    American Express (NYSE:AXP)—the largest new purchase in the Fund during 2015—provides charge and credit card products and travel-related services to consumers and businesses worldwide. The company is the number one credit/charge card issuer and merchant acquirer in the United States measured by billed business, and its network is the second largest after Visa. Historically, American Express has generated attractive returns due to its vertical integration and strong value proposition for high-spending customers.


    In 2015, American Express’ stock declined 24%(c) due to concerns that the company’s business model is under pressure: Costco U.S. and JetBlue terminated their exclusive relationships with the card company and the Department of Justice questioned American Express’ ability to enforce rules prohibiting merchants from steering customers to other credit cards. As a result, American Express’ valuation relative to the market is at a historically low level (13 times forward estimated earnings(d)). We initiated a position in the company because we believe these near-term concerns have obscured a long-term investment opportunity. The company has an attractive business model that produces high returns on capital by encouraging more affluent and creditworthy customers to use the company’s credit and charge cards. American Express’ highly perceived rewards program, customer service, and strong brand recognition help attract and retain wealthier customers. The company should benefit from a continued industry shift from paper to plastic payments and growth in its third-party issued cards business. We believe American Express will be able to maintain its strong return on equity and improve profitability in the long run. On December 31, American Express was a 1.4% position in the Fund.

      


  • Dodge & Cox Comments on Schneider Electric

    Schneider Electric (XPAR:SUNV), a 2.2% position in the Fund, is a global leader in electrical products, systems, and services such as low- and medium-voltage gear, factory automation equipment and systems, and uninterruptible power supply solutions for data centers. While incorporated in France, Schneider derives only 27% of its revenues from Western Europe and more than 40% of its sales come from emerging markets. Thus, Schneider is a prime example that a company’s domicile does not always reflect its true revenue exposure. Schneider’s stock performed poorly in 2015 (down 21% in U.S. dollars) due to lower than expected construction and industrial activity, driven in large part by a slowdown in China, Russia, and Brazil.

      


  • Dodge & Cox Comments on Itau Unibanco

    Itau Unibanco (NYSE:ITUB), Brazil’s leading bank, has strong market positions in consumer credit and payments and is exposed to under-penetrated areas of the financial market that are poised to grow over the next three to five years. Brazil’s struggling economy and sharp currency depreciation weighed substantially on Itau Unibanco’s stock during 2015 (down 41%(e) in U.S. dollars). We conducted both on-the-ground and other due diligence with company management and government officials to evaluate economic and company-specific concerns. What we found reaffirmed our view that Itau’s management has proactively managed credit risk by reducing exposures and raising provisions. Management is focused on enhancing shareholder value and has a solid track record of capital allocation. Beyond this cycle, management is investing for the future and strengthening Itau’s competitive advantage. For example, Itau continues to invest in online access to better serve the needs of affluent customers and more efficiently handle payments and transactions for its retail customer base. At 1.6 times tangible book value, Itau trades at a 10-year low valuation. While political and macroeconomic instability has plagued Brazil, we believe Itau is an attractive long-term investment opportunity and added to the holding. On December 31, Itau was a 1.7% position in the Fund.


    From Dodge & Cox International Stock Fund year-end letter 2015.

      


  • Dodge & Cox Stock Fund Annual Letter 2015

    To Our Shareholders

      


  • Stocks in the Spotlight

    Indexes had a nice rebound along with oil on Tuesday on renewed optimism that oil producers will look to curb production in the near future. The problem with this is twofold. For one, Saudi Arabia has been pretty adamant that it plans to keep producing oil in order to preserve market share. Second, more supply is set to hit the market, this time from Iran whose sanctions have been lifted. Neighboring Iraq is also set to increase its oil production from 3.8 million barrels per day to 4 million plus.


    The main stock to watch on Wednesday, Jan. 27, will be Apple (NASDAQ:AAPL) whose shares are down after hours after it reported better-than-expected earnings but missed analyst estimates on revenue. Earnings came in at $3.28 per share on $75.9 billion in revenue vs. analyst expectations of $3.23 per share on revenue of $76.54 billion.

      


  • Dodge & Cox Global Stock Fund 4th Quarter Commentary

    The Dodge & Cox Global Stock Fund had a total return of 3.5% for the fourth quarter of 2015, compared to 5.5% for the MSCI World Index. For 2015, the Fund had a total return of –8.1%, compared to –0.9% for the MSCI World.


    Market Commentary

      


  • Still a Guru Favorite

    Are the gurus right about Bank of America (NYSE:BAC)?


    There are only a few companies that are more widely held by GuruFocus' gurus. Two of these are banks as well: Wells Fargo (NYSE:WFC) and Citigroup (NYSE:C). Meanwhile lots of gurus have been selling out of Bank of America over the past quarter while the stock is within 20% of its 52-week high and only 2.3% above its 52-week low. Today, the bank reported solid earnings that beat expectations.

      


  • Dodge & Cox Stock Fund 2015 Commentary

    The Dodge & Cox Stock Fund had a total return of 4.6% for the fourth quarter of 2015, compared to 7.1% for the S&P 500 Index. For 2015, the Fund had a total return of -4.5%, compared to 1.4% for the S&P 500.


    Market Commentary

      


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