Chuck Akre

Chuck Akre

Last Update: 2014-08-13

Number of Stocks: 39
Number of New Stocks: 2

Total Value: $3,442 Mil
Q/Q Turnover: 11%

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

Chuck Akre Watch

  • Do You Understand the Business?

    One of the key concepts in value investing is circle of competence. Warren Buffett (Trades, Portfolio) has always reminded us to stick to our circle of competence. Only investing in businesses that you can understand intuitively makes sense but what I’ve observed over the years is that the proper definition of understanding a business is often misconstrued.


    Many investors equate understanding the business to understanding the product or service of the business. I certainly wasn’t too far from that line of thinking in my earlier investment journey. I was ignorant enough to think that Coca-Cola, MasterCard and Wal-Mart were without doubt within my circle of competence. I don’t drink Coke, but I certainly know what Coke is. Heck, better yet, I even know Cherry Coke and Diet Coke. I have two credit cards that have MasterCard sign on them and I use them very often. I also go to Wal-mart occasionally. How could I not understand these businesses? They are part of our daily lives.

      


  • Chuck Akre Comments on MasterCard Corporation

    MasterCard Corporation (“MasterCard”) (NYSE: MA)


    Market cap: $85.8 billion (as of 6/30/14)

      


  • Chuck Akre Comments on Moody’s Corporation

    Moody’s Corporation (“Moody’s”) (NYSE: MCO)


    Market Cap: $18.7 billion (as of 6/30/14)

      


  • Chuck Akre Comments on Colfax Corporation

    Colfax Corporation (“Colfax”) (NASDAQ: CFX)


    Market Cap: $9.2 billion (as of 6/30/14)

      


  • Chuck Akre Comments on American Tower Corporation

    American Tower Corporation (“American Tower”) (NYSE: AMT)


    Market Cap: $35.6 billion (as of 6/30/14)

      


  • Chuck Akre 2nd 2014 Quarter Commentary

    AKRE FOCUS FUND 2nd QUARTER 2014 COMMENTARY


    We continue to believe the U.S. economy is making modest advances. With that said, it will not surprise you that we disclaim any ability to forecast the rate of U.S. economic growth over the next six months, or six years for that matter. A mentor once remarked, “Happiness comes from small improvements.” The Akre Focus Fund Retail Shares (AKREX) and Institutional Shares (AKRIX) returned 3.70% and 3.76%, respectively, net of fees and expenses in the second quarter of 2014 versus the S&P 500 with a return of 5.23% for the same period.

      


  • Don't Be Afraid to Pay a Little Bit More

    “Whether appropriate or not, the term ‘value investing’ is widely used. Typically, it connotes the purchase of stocks having attributes such as a low ratio of price to book value, a low price-earnings ratio, or a high dividend yield. Unfortunately, such characteristics, even if they appear in combination, are far from determinative as to whether an investor is indeed buying something for what it is worth and is therefore truly operating on the principle of obtaining value in his investments. Correspondingly, opposite characteristics – a high ratio of price to book value, a high price-earnings ratio, a low dividend yield – are in no way inconsistent with a ‘value’ purchase.”


    - Warren Buffett (Trades, Portfolio)’s 1992 Letter to Shareholders

      


  • Chuck Akre's Focus Fund First Quarter 2014 Commentary

    From our perch in Middleburg it looks to us like the market continues to absorb the often unpleasant news from around the world. Every so often the market has indigestion. With the attendant back and forth of emotions, it follows that investment outcomes for the first quarter were fairly benign. The Akre Focus Fund Retail Shares (AKREX) and Institutional Shares (AKRIX) returned 1.10% and 1.19% net of fees and expenses, respectively in the first quarter of 2014 versus the S&P 500 with a return of 1.81%.


    Our positions in Colfax and O'Reilly Auto were the largest contributors to performance over the quarter. MasterCard and Dollar Tree were the most meaningful detractors from performance over the quarter. At the end of the first quarter the Fund was approximately 91.4% invested and the portfolio held 31 positions.

      


  • Chuck Akre: Investing in Compounding Machines

    We had the honor to hear from Mr. Chuck Akre (Trades, Portfolio) from Akre Capital Management at the Value Investor Conference, which was held in Omaha on May 1-2, the days before the Berkshire Hathaway shareholder meeting. Mr. Akre’s topic is “Investing in Compounding Machines.” Below are the notes from his speech.

    Good judgment comes from experiences and experiences come from bad judgment. Many years ago, when I was getting into this business, since I had no formal training, I started to think about what makes a good business and what makes a good investment. So let me ask you what’s a good investment?  


  • Chuck Akre Comments on Colfax Corp.

    The only other business included in the top ten which we have not previously mentioned is Colfax Corp. (CFX). This is a manufacturing company whose business model is to acquire other manufacturing business and rationalize them in such a way as to importantly improve their operating results. The management of Colfax Corp. has demonstrated this skill at another company with which we are familiar, and we believe we have an important opportunity here, hence a top ten holding.

      


  • Chuck Akre Comments on Markel Corp.

    The last, Markel Corp. (MKL), is a specialty property and casualty insurer which we believe is positioned exceptionally well for what lies ahead, including the possibility of higher interest rates, firming of insurance pricing, growing free cash flow from its Markel Ventures segment, and lastly the opportunity for a more robust management of its balance sheet. In other portfolios we manage, we have owned shares of Markel Corp. for more than twenty years.

      


  • Akre Focus Fund Semi-Annual Report

    Semi-Annual Letter


    Fellow Shareholders:

      


  • Discount Retailer Ross Stores Proves to Be a Recession-Proof Business

    While 2009’s economic recession was a serious problem for many businesses, particularly in the retail area, off-price retailers were some of the few which actually benefitted from the crash and weak recovery phase. Ross Stores Inc. (ROST) was one of the retailers that gained market share thanks to consumer’s price oriented behaviour. However, the company’s large buyer fleet has also contributed significantly to its past growth. With 600 merchants and 8,000 vendors at hand, the firm has strong pricing power and has used it in the past to obtain trendy designer wear at the lowest prices possible.



    Given the company’s interesting business model, I will analyze Ross Stores' past profitability, capital, and operating efficiency. In addition, I will take a look at which institutional investors have recently bought the company’s stock in the last quarter and based on this information, we will get an understanding of the company´s revenues, operating metrics and quality of earnings.

      


  • Outdoor Advertising in the Midsize Market: A Profitable Business

    The outdoor advertising industry in the U.S. is dominated mainly by three major companies, which generate 75% of all billboard revenue. However, only one of these companies, Lamar Advertising Co. (LAMR) focuses on midsized markets, where it holds a 70% market share. As such, the firm operates 150,000 billboards, 100,000 logo advertising displays and over 27,000 transit displays throughout the country, which account for a total of 75% of sales. Last quarter, investment gurus Chuck Akre (Trades, Portfolio) and Mario Gabelli (Trades, Portfolio) bought this company’s shares at an average price of $48.8. Let’s see why.


    Of Market Advantages and Innovation

      


  • Follow Chuck Akre Latest Buys

    Chuck Akre (Trades, Portfolio) is one of those outstanding mangers that have performed exceptionally well over the long term with a focused, low turnover portfolio construction approach. It is great for us individual investors to be able to get ideas from his every quarter as he is a long-term value investor we can follow intelligently to higher returns.


    His top three buys of the quarter that have just been disclosed today are:

      


  • Chuck Akre's Fourth Quarter Letter to Clients

    January 14, 2014


    Fourth Quarter Letter

      


  • Akre Focus Fund 4th Quarter 2013 Commentary

    The Akre Focus Fund Retail Shares (AKREX) and Institutional Shares (AKRIX) returned 9.38% and 9.41% net of fees and expenses, respectively in the fourth quarter ending December 31, 2013 versus the S&P 500 Index with a return of 10.51% for the same period. For the year 2013, the Akre Focus Fund Retail Shares (AKREX) and Institutional Shares (AKRIX) returned 39.19% and 38.90% net of fees and expenses, respectively versus the S&P 500 Index with a return of 32.39% for the year. 


    Our positions in MasterCard and Moody's Corp. were the largest contributors to performance over the quarter. MarkWest Energy Partners L.P. and Dollar Tree, Inc. were the most meaningful detractors from performance over the quarter. At the end of the fourth quarter the Fund was approximately 85.3% invested and the portfolio held 29 positions. 

      


  • Akre Capital Management Third Quarter Letter to Shareholders

    Both the third quarter and September of 2013 finished with a flourish for the Akre Capital managed accounts. For the first nine months of 2013, our composite net return was 20.8% vs. the market measured by the S&P at 19.8%. In both cases, the returns are welcome and outsized! Your individual return does not likely match the composite for reasons you know, which we are happy to discuss.

    Since the quarter ended, our nationally elected leadership has created a kerfuffle by failing to reach an agreement on the budget. We have no idea what the ultimate outcome will be, but historically, a compromise of some sort has ALWAYS been reached. From our perch, the current stalemate is not added to the list of things which might trouble us. In fact, we don't currently have such a list. We do note that at some point in the future - maybe a year, maybe ten years - interest rates may rise. As a result, the direction of bond prices will almost certainly be negative. Holding long-dated bonds will likely have an unpleasant outcome.  


  • Akre Focus Fund 2rd Quarter 2013 Commentary

    The Akre Focus Fund Retail Shares (AKREX) and Institutional Shares (AKRIX) returned 6.99% and 7.11% net of fees and expenses, respectively in the third quarter of 2013 versus the S&P 500 with a return of 5.24%. Therefore, for the nine months ending September 30, 2013, the fund had returns of 26.99% for retail shares and 27.23% for the institutional shares versus the S&P 500 with a return of 19.79%.

    Our positions in MasterCard and Moody's Corp. were the largest contributors to performance over the quarter. NuSTAR Energy L.P. and DirecTV were the most meaningful detractors from performance over the quarter. At the end of the third quarter the Fund was approximately 89% invested and the portfolio held 29 positions.  


  • Akre Focus Fund 2nd Quarter 2013 Commentary

    The Akre Focus Fund Retail Shares (AKREX) and Institutional Shares (AKRIX) returned 6.39% and 6.40% net of fees and expenses, respectively in the second quarter of 2013 versus the S&P 500 with a return of 2.91%. Therefore for the six months ending June 30, 2013, the fund had returns of 18.69% for retail shares and 18.78% for the institutional shares versus the S&P 500 with a return of 13.82%.

    Our positions in Moody's (MCO), Colfax (CFX), DirecTV (DTV), LPL (LPL), and TD Ameritrade (AMTD) were the largest contributors to performance over the quarter. NuSTAR (NS), bwin, and Apple (AAPL) were the most meaningful detractors from performance over the quarter. At the end of the second quarter we were 96% invested. The portfolio currently has 34 positions.  


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User Comments

Davecvet
ReplyDavecvet - 10 months ago
I am a friend of Pat Lewis and he told me to contact Mr Akre regarding investments. How do I make contact with Mr Akre other than this site to discuss investmenting?

thank you

dave capraro



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