Bill Nygren

Bill Nygren

Last Update: 05-27-2016

Number of Stocks: 51
Number of New Stocks: 0

Total Value: $14,854 Mil
Q/Q Turnover: 2%

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

Bill Nygren Watch

  • Carlson Reduces Holdings in Monsanto and eBay in 1st Quarter

    The top two transactions in the first-quarter portfolio of David Carlson (Trades, Portfolio) of Elfun Trusts were large stake reductions – one in a biotechnology company, the other in an ecommerce company.

    Carlson trimmed his stake in Monsanto Co. (NYSE:MON), a St. Louis-based agricultural biotechnology company, by nearly 78% with the sale of 560,000 shares for an average price of $90.35 per share. The transaction had a -2.39% impact on Carlson’s portfolio.  


  • Low PS for Caterpillar, L-3, Advanced Auto Parts

    According to GuruFocus' All-in-One Screener, the following are companies with market caps above $5 billion that are trading with low P/S ratios.


    Caterpillar Inc. (CAT) is trading at about $72 with a P/S ratio of 1.01 and an estimated P/E multiple of 34.66. The company has a market cap of $42.29 billion; over the last 10 years, the stock has dropped by 7%. During the last 52 weeks, the price has been as high as $89.62 and as low as $56.36.

      


  • Fiat Chrysler Recalls Vehicles Over Transmission Problems

    London-based Fiat Chrysler Automobiles (NYSE:FCAU), the seventh-largest automaker in the world, announced Friday that it would recall more than 1 million vehicles because they can roll abruptly and, as a result, cause damage and/or injuries if the transmission is being used incorrectly.


    The recall was issued after a reported 41 injuries were connected to problems with the automatic gearshifts. The gearshift indicator has been redesigned for all models.

      


  • Financial Stocks’ Weakness Attractive to Oakmark’s Nygren – Top Picks

    In search of a great unloved sector, Oakmark Funds’ Bill Nygren (Trades, Portfolio) vouched for financial stocks in 2016. He had 18 in this portfolio at the end of the fourth quarter, and in spite of their downward slide this year he hasn’t changed his mind.


    Financial stocks have come in dead last in S&P sector performance year to date, falling 7.3% and trailing the S&P 500 stock index’s 0.10% decline. Some of the industry’s bellwethers to tumble this year were Bank of America (NYSE:BAC), down 21%; JPMorgan (NYSE:JPM), down 10%; and Citigroup (NYSE:C), down 19%. Nygren saw the falter as primarily a combination of two factors.

      


  • Oakmark Fund Sells General Mills, American Express, Chesapeake Energy

    Before filing his complete portfolio update not due for several weeks, Bill Nygren (Trades, Portfolio) in his first quarter letter from Friday disclosed some highlights of his fund’s activity, including the end of four positions.


    Nygren, portfolio manager of the Oakmark Fund, sold all of his shares in General Mills (NYSE:GIS), American Express (NYSE:AXP), Union Pacific (NYSE:UNP) and Chesapeake Energy (NYSE:CHK). He did not add any new positions during the first quarter of 2016.

      


  • Bill Nygren, David Herro Comment on Credit Suisse

    Credit Suisse (NYSE:CS) (Switzerland) was the largest detractor for the quarter, declining by 34%. Although CEO Tidjane Thiam warned that fourth-quarter earnings would be weak, some one-off expenses related to litigation, pension true-up charges and write-downs on certain credit assets were negative surprises during the period. However, this has caused the management team to accelerate the restructuring and reduction of non-core investment banking lines of businesses. The goal is to emphasize the wealth management business that has very good secular growth trends, is fee based and requires little capital. We believe Credit Suisse’s capital position remains solid with a Tier 1 capital ratio of 11.4% as of year-end, which is in excess of regulators’ 10% requirement. Despite some near-term challenges, we continue to believe that over time shareholders will benefit from CEO Thiam’s initiatives to correct some legacy missteps, grow the business and reduce costs.


    From Bill Nygren (Trades, Portfolio) and David Herro (Trades, Portfolio)'s Oakmark Global Select Fund: First Quarter 2016 Commentary​.

      


  • Bill Nygren, David Herro Comment on Oracle

    The largest contributor to performance for the quarter was Oracle (NYSE:ORCL) (U.S.), which returned 12%. Shares reacted positively to stronger-than-expected fiscal third quarter results from the cloud-based business. We believe Oracle’s successful transition to the cloud indicates that the company is on the right track. Management also recently announced a $10 billion increase to Oracle’s existing share repurchase program. Even though its stock has enjoyed recent price increases, we believe Oracle remains undervalued relative to its normalized earnings power.


    From Bill Nygren (Trades, Portfolio) and David Herro (Trades, Portfolio)'s Oakmark Global Select Fund: First Quarter 2016 Commentary​.

      


  • Bill Nygren Comments on Fiat Chrysler

    Similarly, we have increased our position in Fiat Chrysler (NYSE:FCAM) mandatory convertible bonds at prices that preserved the upside of the equity with the added benefit of downside protection through a unique conversion feature, purchased at minimal additional cost, while capturing a tax loss as we sold a corresponding dollar amount of Fiat Chrysler equity. In January, we also sold Ferrari shares upon distribution from Fiat Chrysler because the shares were near our estimate of intrinsic value. We used the proceeds to purchase a like dollar amount of Fiat Chrysler shares, which were selling at a much larger discount to our estimate of value.

      


  • Bill Nygren Comments on Chesapeake Energy

    While there were no new companies purchased in the quarter, recent volatility in the equity and fixed income markets allowed us to purchase securities within the capital structure of two existing holdings in a way that maintained upside to these undervalued companies and added downside protection, while also providing a tax benefit. In the case of Chesapeake Energy (NYSE:CHK), we purchased bonds at prices that offered similar upside to the equity, despite higher seniority in the capital structure, while capturing a tax loss on the sale of equity.

      


  • Bill Nygren Comments on Chesapeake Energy

    When a business doesn’t meet our expectations, we reduce our intrinsic value estimate accordingly, and the remaining three eliminations fall into that category. Selling our positions in American Express, Union Pacific and Chesapeake Energy allowed us to take tax losses while reinvesting proceeds into businesses in which we have more long-term confidence. Specifically, Chesapeake Energy (NYSE:CHK) has been a poor performer as oil prices have dropped from over $100 per barrel to less than $40 per barrel. Therefore, we swapped our Chesapeake holdings for other energy holdings that are also undervalued based on expected cost-cutting and higher commodity prices, but have what we believe are stronger balance sheets.

      


  • Bill Nygren Comments on General Mills

    General Mills (NYSE:GIS) has provided favorable returns since we added the stock in early 2014, and we sold our position as the share price approached our estimate of intrinsic value.

      


  • Bill Nygren and David Herro's Oakmark Global Select Fund: First Quarter 2016 Commentary

    The Oakmark Global Select Fund declined 4% for the quarter ended March 31, 2016, underperforming the MSCI World Index, which was flat for the quarter. The Fund has returned an average of 7% per year since its inception in October 2006, outperforming the MSCI World Index’s annualized gain of 4% over the same period.


    The largest contributor to performance for the quarter was Oracle (NYSE:ORCL) (U.S.), which returned 12%. Shares reacted positively to stronger-than-expected fiscal third quarter results from the cloud-based business. We believe Oracle’s successful transition to the cloud indicates that the company is on the right track. Management also recently announced a $10 billion increase to Oracle’s existing share repurchase program. Even though its stock has enjoyed recent price increases, we believe Oracle remains undervalued relative to its normalized earnings power.

      


  • Bill Nygren's Oakmark Select Fund: First Quarter 2016 Commentary

    For the quarter, the Oakmark Select Fund declined 6%, compared to a 1% gain in the S&P 500 Index. Our financial sector holdings accounted for over 80% of the decline in the Fund this quarter. While we are disappointed with this outcome, we remain confident in our financial holdings and the same process that has delivered success since the Fund’s inception.


    The three largest detractors from performance were Bank of America (-19%), Citigroup (-19%) and American International Group (-12%). Concerns about the economy and lower near-term expectations for interest rates have pressured financial stock prices broadly, and our holdings were not immune. Importantly, our values already reflect normalized credit losses and relatively minor interest rate increases over the next two years. While stresses in the energy and mining sectors will likely lead to some related credit losses for the banks, we believe the impact to value will prove de minimis as exposures are relatively small across our holdings. Meanwhile, operational performance and capital allocation are tracking with our expectations. Therefore, we view the lower share prices as merely increasing the discount to value at which these already cheap financials were trading, and we remain very confident in these holdings. The management and directors of Bank of America, Citigroup and JP Morgan seem to agree as they personally bought an aggregate $31.5 million of their companies’ stock during the first quarter.

      


  • Bill Nygren's Oakmark Fund: First Quarter 2016 Commentary

    The Oakmark Fund declined 1% in the first quarter of 2016, and it lagged behind the 1% gain for the S&P 500. While the broader market increased only modestly from the first day of the quarter to the last, a closer look shows heightened intra-quarter volatility, with a 10% decline during the first half of the quarter followed by a swift recovery during the second half. Not surprisingly, oil prices followed a similar pattern, and the Fund’s energy stocks increased from their early quarter lows. Interest rates remained at decades-low levels during the quarter, fueling “lower for longer” concerns, which along with worries about energy exposure added further pressure to the Fund’s financial stocks. At Oakmark, we remain focused on assessing the long-term underlying value of businesses, which we believe are much less volatile than stock prices. As such, the financial sector’s pronounced weakness has made the segment more attractive to us, and despite recent share price declines, financial companies still represent almost one-third of the Fund’s equity holdings.


    Our biggest contributing sectors for the first quarter were industrials and information technology, while Whirlpool (NYSE:WHR) and Cummins (NYSE:CMI) were the top individual contributors. The Fund’s worst contributing sectors for the quarter were financials and materials, and our worst contributing securities were Bank of America (NYSE:BAC) and Citigroup (NYSE:C).

      


  • Citigroup, Amgen Are Trading With Wide Margin of Safety

    The following are some of the stocks that are trading below the Peter Lynch earnings line, according to GuruFocus' All-in-One Screener.


    Citigroup Inc. (C) is trading at about $42, but the Peter Lynch earnings line gives the company a fair price of $57.62, giving the stock a margin of safety of 27%. It is trading with a PE ratio of 7.78 that is ranked higher than 78% of its competitors in the Global Banks - Global industry, and is currently 31.22% below its 52-week high and 21.44% above its 52-week low.

      


  • Guru Stocks With Low PS Ratio, Wide Margin of Safety

    According to GuruFocus' All-in-One Screener, the following are companies with a market cap above $5 billion that are trading with a very low P/S ratio.


    Telecom Italia SpA (TI) is trading at about $12 with a P/S ratio of 1 and an estimated forward P/E multiple of 11.68. The company has a market cap of $22.45 billion and over the last 10 years, the stock has dropped by 61%. During the last 52 weeks, the price has been as high as $14.18 and as low as $8.89.

      


  • Caxton Associates Sells Bank of America, Monster Beverage

    Caxton Associates (Trades, Portfolio), a firm with a $628 million in assets, makes bets on macroeconomic trends through liquid assets, including stocks, bonds, currencies and commodities. During the last quarter, the fund reduced several of its stakes and the following were the most heavily weighted trades:


    The investor reduced its stake in Bank of America Corporation (BAC) by 91.42% and the deal had an impact of -6.72% on the portfolio.

      


  • Sanofi's New Products Will Fuel Sales

    One of the most prominent stocks that most investors like to keep in their portfolios is Sanofi. (NYSE:SNY). Among the gurus, James Barrow (Trades, Portfolio) is one of the largest shareholders of the stock and some of the other prominent investors who hold a position in Sanofi are Ken Fisher (Trades, Portfolio), Bill Nygren (Trades, Portfolio) and Warren Buffett.


    Sanofi, a global healthcare leader, discovers, develops and distributes therapeutic solutions focused on patients' needs. Sanofi has core strengths in diabetes solutions, human vaccines, innovative drugs, consumer healthcare and animal health.

      


  • The Case for Eating Your Own Cooking - Oakmark Funds

    At Harris Associates, we believe there is no better way to convey confidence in our stock-picking abilities than to invest in our own funds. Each year we voluntarily disclose the total assets that the firm’s employees, our families and the Funds’ trustees have invested in the Oakmark Funds; as of December 31, 2015, that number is over $440 million, reflecting significant share purchases during the past year. In the words of Warren Buffett (Trades, Portfolio), “To be successful in business and investing, you’ve got to have skin in the game.” The Oakmark Funds family, incepted in 1991, was born out of that idea: The partners at Harris Associates wanted to start mutual funds in which they could invest their personal money with the same long-term, value-investing approach successfully employed in the firm’s client accounts.

    One of our central investment tenets is to buy stock in companies that have management teams whose interests are aligned with their shareholders. We look to buy stock in businesses with management teams that think and act like owners as demonstrated in their capital allocation decisions and ownership structure. We like to see management teams invested right alongside us, or if not possible, they must be properly incented to grow shareholder value. Internally, we abide by that same manager-shareholder alignment tenet by investing our own dollars in our own strategies.  


  • Bill Nygren Makes Big Investment in Ally Financial

    Guru Bill Nygren (Trades, Portfolio) purchased a 10,456,000-share stake in Ally Financial Inc. (NYSE:ALLY) in the fourth quarter.


    Ally Financial was originally founded in 1919 as a subsidiary of The General Motors Corporation. The company’s original founding name was the General Motors Acceptance Corporation (GMAC). The name was used in operation for 91 years before the company rebranded in 2010, changing its name to Ally Financial.

      


  • Oakmark Fund Buys Ally Financial, Sells Amazon

    Oakmark Fund portfolio manager Bill Nygren (Trades, Portfolio) stayed true to the firm’s concentrated approach during the fourth quarter, initiating one new holding and selling three others that had reached the fund’s estimate of true value.

    Nygren purchased 10,456,000 shares in Ally Financial (NYSE:ALLY), which traded for an average price of $19.80 during the quarter. Ally is an online banking and auto financing company whose stock has traded down 12% over the past year. In the fourth quarter 2015, Ally reported losses of $1.97 per share compared to earnings of 23 cents per share in the year-ago quarter.  


  • Gap, Qualcomm Are High-Yield Stocks Gurus Are Buying

    The following are companies with high and growing dividend yields that gurus are buying according to GuruFocus' All-in-One Screener.


    Ingersoll-Rand PLC (IR) has a trailing dividend yield of 2.26% with a three-year growth rate of 32.50% and a five-year growth rate of 22.70%. The stock is now trading with a trailing 12-month P/E multiple of 20.10 and an estimated forward P/E multiple of 11.60. During the last 12 months, the stock price has dropped by 24%.

      


  • Bill Nygren Boosts Stakes in Halliburton, American Express, Caterpillar

    Bill Nygren (Trades, Portfolio) increased his stake in many stocks, but most of them were below 10%. He is portfolio manager of the Oakmark Fund. He and his partners are value investors, and they invest in companies that they believe trade at a substantial discount to what they consider to be the true business value.


    The biggest increase was in Halliburton Co. (HAL); the guru increased the stake by 51.13% at an average price of $39.34 per share. The position was established in Q4 2012 and in the first quarter he reduced the stake by 10.36%. The deal had an impact of 0.52% on the portfolio, and the stock price dropped 20%. The stock traded for $31.47 on Thursday.

      


  • 3 Undervalued Stock Picks From Bill Nygren


    Bill Nygren (TradesPortfoliocomments on how the prices in the market were a lot different at the start of 2015. Values are now much in favor of traditional value stocks. Ally Financial (NYSE:ALLY) is one example. Everyone is concerned about auto loans, but the terms are unchanged from a couple of years ago. Car lenders are focused on lending against depreciating assets. In the fourth quarter 2015 commentary he commented:

      


  • Bill Nygren's 4th Quarter Commentary


    “Don’t keep all your eggs in one basket.” -Old Italian Proverb

      


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