Bill Nygren

Bill Nygren

Last Update: 11-19-2015

Number of Stocks: 57
Number of New Stocks: 3

Total Value: $15,745 Mil
Q/Q Turnover: 8%

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

Bill Nygren Watch

  • 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.

      


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