Bill Nygren

Bill Nygren

Last Update: 02-26-2016

Number of Stocks: 56
Number of New Stocks: 1

Total Value: $16,225 Mil
Q/Q Turnover: 6%

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

Bill Nygren Watch

  • 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.

      


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