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

  • Oil Update: Are Bargains Still Out There? - Harris Associates

    Judson Brooks is a partner and U.S. investment analyst at Harris Associates. Prior to joining Harris Associates in 2001, Judson was a research analyst at Ariel Capital Management. He has an MBA from the University of Chicago and a BA from Indiana University. Judson is a CFA charterholder.


    May 18, 2016

      


  • Brexit Threat and Long-Term Investors: Most Discounted Financials

    Many economists and international organizations have opined on the potential dangers of a British decision to leave the EU next week, but its jarring impact on the market may have a different meaning for long-term investors. Already it has helped put many banks on sale.


    Firms in the UK’s financial sector “would likely incur a setback to their earnings and economic disruption,” if a majority of British citizens vote yes on a June 23 referendum to decide whether to leave the EU, Sarah Ketterer (Trades, Portfolio) of Causeway Capital has said. Fear of the Brexit fallout has already hit the country’s financial sector, dropping it 29.9% in the recent year, the third most precipitous sector decline in the FTSE.

      


  • Gurus Who Bought LinkedIn Cheap in 2nd Quarter See Big Gains

    The Microsoft-LinkedIn deal this week conferred some much needed mercy on funds this quarter, if they owned LinkedIn (NYSE:LNKD) stock.


    Oakmark Funds, for instance, had such a sharp uptick in its return June 13, the day Microsoft announced its plan to acquire LinkedIn, it sent a note to clients to explain. Its stake in LinkedIn was a surprise to investors because the firm started the position in the second quarter before the SEC-required disclosure date. The stock’s spike to $196 the day of the announcement from $131 the day prior gave an unusually quick profit for the long-term focused fund.

      


  • Oakmark Fund Celebrates LinkedIn-Related Jump

    From the Oakmark Fund, led by Bill Nygren (Trades, Portfolio) and David Herro (Trades, Portfolio):   


  • Bill Nygren of Oak Mark Fund Invests in Citigroup and Ally Financial

    During the first quarter, Bill Nygren (Trades, Portfolio) of Oak Mark Fund increased his position in Ally Financial Inc. (NYSE:ALLY) by 49.90%, ending with 15,674,000 shares of the stock.


    Usually, the Oak Mark Fund portfolio manager uses multiple methods to calculate the proper intrinsic value for the stock. According to his first-quarter commentary, Nygren wants to apply the valuation metrics that most accurately capture the intrinsic value. For example, Nygren valued Amazon (NASDAQ:AMZN), one of his largest holdings last year, using EV/Sales multiples, the valuation multiple that gives Nygren confidence that Amazon was cheap compared to its competitors. For Alphabet Inc. (NASDAQ:GOOGL), Nygren used a more complicated approach to value the company: a “sum-of-the-parts” approach that explicitly valued cash and cumulative investments in venture caplike projects.

      


  • Bill Nygren Adds Stake in Fiat Chrysler Automobiles

    Bill Nygren (Trades, Portfolio) increased his stake in Fiat Chrysler Automobiles NV (FIATY) during the first quarter.


    Fiat Chrysler Automobiles is the seventh-largest automaker in the world. It designs, engineers, manufactures and sells passenger cars, light commercial vehicles, components, and production systems worldwide. The group’s automotive brands are Abarth, Alfa Romeo, Chrysler, Dodge, Fiat, Fiat Professional, Jeep, Lancia, Ram, SRT and Maserati, in addition to Mopar, the parts and service brand.

      


  • Bill Nygren Gets Better Than Fair Value for 3 Stakes

    Bill Nygren (Trades, Portfolio) of Oakmark Fund sold more stakes in the first quarter – five – than he had in more than a year. In all but two of those transactions, he sold the shares for well in excess of their fair values.


    Nygren’s most noteworthy transaction in the first quarter was the sale of his 4.8 million-share stake in American Express Co. (NYSE:AXP), a banking and financial services company based in New York City, for an average price of $58.34 per share. The divestiture had a -2.06% impact on Nygren’s portfolio.

      


  • 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

      


  • Bill Nygren: Why Oil Won't Stay at $30

    Bill Nygren (Trades, Portfolio) of Oakmark Funds did a interview with CNBC on Tuesday where he discussed how traditional value investing is back. He spoke about selling out of Amazon (NASDAQ:AMZN) and investing in Ally Financial (NYSE:ALLY). He discussed why he owns a growth stock like Google (NASDAQ:GOOGL). Nygren also talked about energy stocks and oil prices, saying he doesn't believe that oil will stay at $30.


      


  • Oakmark Comments on Apache

    The largest detractor for the year was Apache (NYSE:APA) (U.S.), a global oil and gas exploration and production company, whose shares fell 28%. As with most oil and gas exploration and production companies, Apache’s share price has been adversely affected by persistently weak oil and natural gas prices. In this challenging environment, the company is focused on improving capital efficiency, both through the efficient development of U.S. shale assets and the low-cost growth of international assets. Firm-wide operating costs continue to fall, and capex has decreased by almost 60% this year. We believe Apache's capital productivity is improving at a faster pace than its global peers, which helps its position on the cost curve. Apache has what we consider to be a healthy balance sheet, which should allow the company to endure a prolonged downturn, and we expect that an eventual commodity price recovery will highlight the growing value of Apache's underappreciated asset base.


    From Oakmark Global Select Fund's fourth quarter 2015 commentary.

      


  • Oakmark Comments on Credit Suisse Group

    Credit Suisse Group (XSWX:CSGN) (Switzerland) was the largest detractor for the quarter, falling 7%. Credit Suisse Group’s net new money and profits from its wealth management and asset management divisions increased in the third quarter, indicating that its fundamental performance remains solid. However, its share price suffered during the quarter due to the convergence of the preceding stock price with the new rights offering price of CHF 18 per share. Its share price was also likely hurt by external factors, especially the Financial Stability Board (FSB)’s announcement of higher capital buffer recommendations for systemically important banks. The FSB is calling for increasing the capital buffer to 16% of a banking group’s equity and debt risk-weighted assets by 2019 and to 18% by January 2022. As we have stated previously, we believe that given adequate notice, Credit Suisse Group is well equipped to contend with future capital requirements.


    From Oakmark Global Select Fund's fourth quarter 2015 commentary.

      


  • Oakmark Comments on Alphabet

    Alphabet (NASDAQ:GOOGL) (formerly Google) (U.S.), the leading Internet search engine, was the top contributor for the quarter, returning 25%. Alphabet’s share price reacted positively to third-quarter results in which both earnings and revenues exceeded market expectations. Importantly, the company also reported accelerating constant currency revenue growth of 21%. This high quality growth was the product of gains across all important segments; the fastest growth occurred in Google Sites (Search, YouTube, Gmail, etc.), which provide the company’s most profitable revenue. Alphabet’s mobile division also grew substantially, which eased concerns that the shift to mobile computing would harm the company’s profitability. We believe that Alphabet will benefit from a very strong tailwind as advertising continues to move online.


    From Oakmark Global Select Fund's fourth quarter 2015 commentary.

      


  • Bill Nygren Comments on Chesapeake Energy

    Our worst quarterly performer by far was Chesapeake Energy, down 39%, while only two other positions declined—FNF Group down 2% and Calpine down 1%. In our opinion, commodity prices have fallen to levels which, if permanent, would bankrupt much of the exploration and production sector of the oil and gas industry. However, we believe commodity prices will rise and that many investments made today in this industry will prove quite rewarding. That said, given Chesapeake (NYSE:CHK)’s financial obligations, it is without question a much riskier investment than we normally hold. Securities across Chesapeake’s capital structure have all declined sharply and, in our opinion, are now all attractively priced. We’ve shifted some of our position from common stock to somewhat less risky preferred stock, which we believe reduces risk without forfeiting upside potential.


    From Oakmark Select Fund's fourth quarter 2015 commentary.

      


  • Bill Nygren Comments on Amazon

    We eliminated our Amazon (NASDAQ:AMZN) stake during the quarter, as the stock’s rapid climb in 2015 brought the shares up to our estimate of intrinsic value. While our holding period for Amazon (first purchased in the Fund in the second quarter of 2014) was much shorter than is typical for us, we’ve always said that turnover is simply a byproduct of the length of time required for price to converge with value. We’ll happily show high turnover when it is the result of rapid stock price appreciation. We reinvested the Amazon proceeds across existing holdings, ending the quarter with investments in 19 companies; the Fund generally holds about 20 positions.


    From Oakmark Select Fund's fourth quarter 2015 commentary.

      


  • Bill Nygren Comments on Ally Financial

    Ally (NYSE:ALLY) was founded nearly a century ago as General Motors Acceptance Corporation. Its purpose then was to provide financing to GM dealers and retail customers. Today, Ally’s business is largely the same except that it is no longer owned by GM and now serves dealers and customers of many other automobile manufacturers, such as Ford, Chrysler and Toyota. Since Ally’s initial public offering in spring 2014, its shares have fallen over 20% while the S&P 500 has returned over 15%. Over this period, some investors have grown concerned that the business is at a cyclical peak, as U.S. auto sales are near record levels and credit losses are below long-term averages; as a result, some believe Ally’s earnings have nowhere to go but down. We believe cyclical pressures will be offset by continued internal improvements, such as funding cost reductions (as “legacy” liabilities are replaced with lower cost borrowings) and improving their capital structure. With Ally’s stock trading at just 80% of tangible book value, we believe Ally is a compelling addition to the Oakmark Fund.


    From Oakmark Fund's fourth quarter 2015 commentary.

      


  • Bill Nygren Comments on Omnicom Group

    Omnicom Group (NYSE:OMC) has also been a strong performer for the Fund. We have held Omnicom since late 2008, and we eliminated the position in the fourth quarter as the share price approached our estimate of fair value.


    From Oakmark Fund's fourth quarter 2015 commentary.

      


  • Bill Nygren Comments on Amazon

    Amazon (NASDAQ:AMZN) has been a great holding for the Fund, and with the share price more than doubling in 2015, we believe the business is now fairly valued. With minimal reported earnings and a very high P/E ratio, Amazon may have looked like an unusual purchase for a value-based fund when we initiated a position in April 2014. We looked past reported earnings, which were tempered by large investments for future growth, and found that the scale and core earnings power of Amazon’s business were quite impressive and under-appreciated.


    From Oakmark Fund's fourth quarter 2015 commentary.

      


  • Oakmark Global Select Fund 4th Quarter 2015 Commentary

    The Oakmark Global Select Fund returned 7% for the quarter ended December 31, 2015, outperforming the MSCI World Index’s 6% return. For the calendar year, the Fund returned 2%, outperforming the MSCI World Index, which lost 0.9%. The Fund has returned an average of 8% per year since its inception in October 2006, outperforming the MSCI World Index’s annualized gain of 4% over the same period.


    Amazon (NASDAQ:AMZN) (U.S.), one of the largest online companies in the world, was the largest contributor to Fund performance for the year, returning over 100% during our holding period. We sold our shares of Amazon in early November as it reached our estimate of intrinsic value.

      


  • Bill Nygren's Oakmark Select Fund Q4 2015 Shareholder Letter

    The Oakmark Select Fund returned 7% for the quarter which matched the S&P 500 Index’s return. For all of calendar 2015, the Oakmark Select Fund declined by 4%, compared to a 1% gain for the S&P 500 Index.


    Our top performers in the quarter, each up by at least 24%, were Alphabet (formerly known as Google), General Electric (NYSE:GE), and Amazon (NASDAQ:AMZN). Alphabet (NASDAQ:GOOGL) and GE ended the quarter as the two largest positions in the Fund, and we believe both investments remain substantively undervalued, possess strong fundamentals, and are run by excellent management teams. We’ve always believed that Alphabet’s highly valuable search business makes more money than investors give it credit for, and the company’s new reporting structure should better highlight this profit stream. General Electric, meanwhile, is completing its portfolio transformation by selling off finance assets, acquiring what we believe is a quality industrial asset at a great price (Alstom), and buying back stock with proceeds from its Synchrony share exchange. We expect the newly refocused GE to have significant margin expansion potential over the next few years.

      


  • Bill Nygren's Oakmark Fund 4th Quarter 2015 Commentary

    The Oakmark Fund returned 5% during the fourth quarter of 2015, bringing the calendar year to a loss of 4%. These results lagged behind the S&P 500, which was up 7% for the fourth quarter and up 1% for the calendar year. We are disappointed with the Fund’s full-year results, which were hurt by significant declines in energy-related shares and relative underperformance from financials. As portfolio managers and large shareholders of the Fund, we’re not satisfied with losses, but we remain confident in our time-tested philosophy, investment process and our research team. As we have said in the past, our analysts look for three characteristics in every investment: (1) businesses selling at a discount to fair value, (2) businesses that produce sustainable value growth over time and (3) management teams that think and act like value-maximizing owners. We typically buy businesses that are trading at a significant discount to our estimate of a company’s intrinsic value and sell when the price approaches intrinsic value. With recent underperformance in several of our sectors, the valuation of the Oakmark Fund portfolio is attractively positioned toward the “buy” end of the range.


    Our biggest contributing sectors for the fourth quarter were information technology and financials, with General Electric and Amazon being the best individual contributors. Our worst contributing sectors for the quarter were energy and healthcare, and our worst individual securities were Anadarko and Cummins. For the calendar year, the highest contributing securities were Amazon and Alphabet (formerly known as Google), and the worst contributing securities were Chesapeake and Qualcomm. Chesapeake (NYSE:CHK) was affected by another 30% drop in crude oil prices in 2015, to what we feel is an unsustainable level, and Qualcomm (NASDAQ:QCOM) was pressured by foreign disputes in their highly profitable wireless royalty business.

      


  • Analyzing Oakmark Fund's Top Holdings

    Bill Nygren (Trades, Portfolio) is the portfolio manager of the Oakmark Fund. I think it is important to analyze key holdings from prominent fundamental-oriented hedge funds because hedge funds have more analytical resources to analyze stocks than the majority of individual investors. Let's analyze Oakmark Fund's most interesting stock selections:


    Largest position - Bank of America Corporation (NYSE:BAC)

      


  • Microsoft, Intel and National Oilwell Varco Have High Dividend Yields in Bill Nygren's Portfolio

    Bill Nygren (Trades, Portfolio) is portfolio manager of The Oakmark Fund, The Oakmark Select Fund and the Oakmark Global Select Fund. Nygren and his partners invest in companies they believe trade at a substantial discount to what they consider to be the true business value.


    National Oilwell Varco Inc. (NOV)

      


  • Nominate an Investor for Guru of the Year

    As a tough year for money managers winds down, it’s time to nominate who you think performed best in 2015 for a special honor: GuruFocus Guru of the Year.


    Some of the most spotlighted firms slumped in 2015. David Einhorn (Trades, Portfolio)’s Greenlight Capital Offshore fell 16.9% and Leon Cooperman (Trades, Portfolio)’s Omega Overseas Partners fell 12% through Sept. 30, and Bill Ackman (Trades, Portfolio)’s Pershire Square Holdings dropped 9.6% through Oct. 13, according to HSBC.

      


  • Bill Nygren Cuts Stake in Omnicom Group More Than 40%

    Bill Nygren (Trades, Portfolio) is portfolio manager of the Oakmark Fund, which is a diversified fund that seeks long-term capital appreciation by investing primarily in larger capitalization U.S. companies. The following are the stakes that Nygren reduced in the third quarter.


    Amazon.com Inc. (AMZN)

      


  • Bill Nygren Invests in Stake in Alphabet

    Bill Nygren (Trades, Portfolio) and his partners at Oakmark Fund look for companies that are trading below their true value, then hold the shares until the businesses rise to that level. It is a strategy that has produced double-digit returns in recent years.


    Nygren’s most noteworthy third-quarter transaction was his acquisition of a 1,900,000-share stake in Cummins Inc. (NYSE:CMI), a Columbus, Ind.-based heavy equipment company, for an average price of $123.51 per share. The deal had a 1.31% impact on Nygren’s portfolio.

      


  • These 6 Bargain Stocks Are Still in Play

    Over the last six months, I’ve written more than 40 articles for GuruFocus. In this business, you have to take the good with the bad, especially in the performance column. With that in mind, I’ve gone back over my articles and found these stocks are even better bargains now than they were at publication.


    I believe in dollar cost averaging, or in this case dollar down averaging, as long as the underlying company is fundamentally rock solid and its stock still has the same upside potential from my original price point.

      


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