Dodge & Cox

Dodge & Cox

Last Update: 09-09-2016

Number of Stocks: 178
Number of New Stocks: 4

Total Value: $101,253 Mil
Q/Q Turnover: 6%

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

Dodge & Cox Watch

  • Dodge & Cox Stock Fund 3rd Quarter Commentary

    The Dodge & Cox Stock Fund had a total return of 8.8% for the third quarter of 2016, compared to 3.9% for the S&P 500 Index. For the nine months ending September 30, 2016, the Fund had a total return of 9.5%, compared to 7.9% for the S&P 500.


  • 7 Stocks With Growing Yields and Steady Assets

    Thanks to GuruFocus’ All-In-One Screener, I want to highlight stocks that have a five-year growing dividend yield with strong profitability and a long-term track of solid returns and growing asset value.

    Agrium Inc. (AGU) has a dividend yield that during the last five years has grown by 105.20%. The yield is now 3.91% with a payout ratio of 56%. The company has a 10-year asset growth rate of 21% supported by a current ROA of 5.14% that during the last 10 years has had an average value of 6.67%.


  • Railroad Companies Offer High Margin Potential

    As of Sept. 21, several companies in the railroad industry have an efficient business operation. Two companies, Canada Pacific Railway Ltd. (NYSE:CP) and Union Pacific Corp. (NYSE:UNP), have a selling, general & administrative expense to gross profit ratio of about 30%, which suggests durable competitive advantage. With low SGA expenses, these companies have potential for high profit margins.

    The efficiency ratio


  • 10 Stocks Dodge & Cox Keep Buying

    Dodge & Cox was founded in 1930 by Van Duyn Dodge and E. Morris Cox. The firm manages a portfolio composed of 178 stocks with a total value of $101,253 million. In both the first and second quarters, the firm bought shares in the following stocks.

    Apple Inc. (AAPL)


  • Dodge & Cox Trims Hewlett Packard Enterprise Stake

    Dodge & Cox, a firm that invests primarily in a diversified portfolio of equity securities, trimmed its stake in Hewlett Packard Enterprise (NYSE:HPE) by 7,747,840 shares for an average price of $17.51 per share during the second quarter.

    The trade had a -3.46% impact on Dodge & Cox’s portfolio. It now owns 216,321,878 shares of Hewlett Packard.


  • Dodge & Cox Exits Time Warner Cable, Buys MetLife

    Dodge & Cox was founded in 1930, by Van Duyn Dodge and E. Morris Cox. During the second quarter the guru’s most heavily weighted trades were as follows:

    The guru closed its stake in Time Warner Cable Inc. (TWC) with an impact of -3.65% on the portfolio.


  • Apache Announces Discovery of Oil in West Texas

    Apache Corp. (NYSE:APA), an independent energy company, announced the discovery of 2 billion to 3 billion barrels of oil in a West Texas field on Wednesday.

    The area, being referred to as “Alpine High,” is located near the Davis Mountains in Reeves County and has been previously overlooked due to the belief it would not be fit for hydraulic fracturing. According to Apache, the find could be worth at least $8 billion and has the potential to become one of the biggest energy finds of the past decade.


  • Westport's Top 7 Transactions in 2nd Quarter Were Reductions

    Westport Asset Management (Trades, Portfolio)’s top seven transactions in the second quarter were reductions of stakes in its portfolio.

    In its largest transaction of the quarter, the firm sold nearly 30% of its holding in Universal Health Services Inc. (NYSE:UHS), a Pennsylvania-based hospital management company, selling 170,564 shares for an average price of $131.77 per share. The deal had a -3.33% impact on the portfolio.


  • Bill Gates Foundation Traded in 2 Companies in 2nd Quarter

    Bill Gates (Trades, Portfolio)’ Bill & Melinda Gates Foundation reduced three positions and added to two in the second quarter.

    The foundation sold more than 7% of its stake in Warren Buffett (Trades, Portfolio)’s and Charlie Munger (Trades, Portfolio)’s Berkshire Hathaway (NYSE:BRK.B), the Omaha, Nebraska-based conglomerate. The foundation sold 5 million shares for an average price of $142.94 per share. The transaction had a -4.13% impact on the portfolio.


  • 6 Stocks With Growing Yields

    Thanks to GuruFocus’ All-In-One Screener, we can highlight stocks that have a five-year growing dividend yield with strong profitability and a long-term track record of solid returns and growing asset value.

    Agrium Inc. (AGU) has a dividend yield that during the last five years has grown by 105.20%. The yield is now 3.86% with a payout ratio of 56%. The company has a 10-year asset growth rate of 21%, supported by return on assets (ROA) of 15% that during the last 10 years has had a median value of 6.67%.


  • Joel Greenblatt Buys Fox, ConAgra and Intuit

    During the second quarter, Joel Greenblatt (Trades, Portfolio) of Gotham Asset Management LLC acquired three new holdings. They are Twenty-First Century Fox Inc. (NASDAQ:FOXA), ConAgra Foods Inc. (NYSE:CAG) and Intuit Inc. (NASDAQ:INTU).

    Greenblatt is the founder and portfolio manager of Gotham Asset Management. He is the creator of Magic Formula Investing, which emphasizes high return on capital (ROC) and earnings yield. He also founded the New York Securities Auction Corp. (NYSAC) and is an adjunct professor at Columbia Business School. The firm holds stock in 935 companies and is worth $8.3 million. The turnover rate is 35%.


  • Akre Capital Buys Fortive, Sells Arlington

    During the second quarter, Akre Capital Management LLC acquired one new holding and sold out of another. The fund bought Fortive Corp. (NYSE:FTV) and sold Arlington Asset Investment Corp. (NYSE:AI).

    Chuck Akre (Trades, Portfolio) founded Akre Capital, where he serves as CEO, in 1989. The fund is team managed. Their investment philosophy is called the “three-legged stool” approach. This approach examines a company’s growth in book value over time, its management and its ability to reinvest its free cash flow in a manner that continues to earn above-average returns. The fund holds stock in 27 companies with a toal size of $4.9 billion. The turnover rate is 16%.


  • 6 Stocks Trading Below the Peter Lynch Value

    According to GuruFocus' All-in-One Screener, several gurus are focusing on stocks whose Peter Lynch fair value is far above the current price. The following stocks are trading with wide margins of safety and at least five gurus are shareholders.

    Ryanair Holdings PLC ADR. (RYAAY) is trading at about $72 per share, and the Peter Lynch value gives the stock a fair price of $98.5, giving investors a margin of safety of 25%.


  • Dodge & Cox Comments on Goldman Sachs

    Goldman Sachs (NYSE:GS) (2.5% of the Fund) is a leading global investment bank, securities broker, and investment manager that provides financial services to a diversified client base that includes corporations, financial institutions, governments, and high-net-worth individuals. Since the financial crisis, Goldman Sachs has deleveraged its balance sheet, shed risky assets, and increased its liquidity. As European competitors (e.g., Credit Suisse, UBS, Royal Bank of Scotland) continue to cut costs and retreat from investment banking, Goldman has an opportunity to further increase its market share in many key businesses. While regulatory requirements have increased, this should reduce the probability of large trading losses. Finally, although market turns can be sudden and difficult to predict, Goldman Sachs has demonstrated an ability to remain profitable: over the past 16 quarters, its return on common equity has averaged an impressive 10%.

    Continuing macroeconomic uncertainty has led to diminished primary debt and equity issuance and weaker secondary market trading conditions. Many of Goldman Sachs’ key clients, such as hedge funds and active asset managers, are experiencing net asset outflows. In this period of slower activity, the company has maintained its global network while downsizing naturally through attrition. The weak operating environment and concerns about Brexit have weighed on the stock, which was down 17% during the first half of 2016. However, after carefully analyzing the company’s risks and opportunities, we recently added to Goldman Sachs because it is an increasingly dominant player, has a highly profitable business, and trades at an attractive 0.9 times tangible book value.


  • Dodge & Cox Comments on Union Pacific

    While scores of railroads once operated in the United States, the industry is now concentrated: there are two major railroad lines east of the Mississippi and two in the West. We recently initiated a position in Union Pacific (NYSE:UNP), which owns an irreplaceable railroad franchise covering 23 western states.

    The North American railroad industry has many attractive characteristics: companies operate in regional duopolies and have high recurring revenue, substantial ability to control their costs, and extremely high barriers to entry. Union Pacific has the opportunity to increase its earnings as a result of growth in its domestic intermodal business, as well as a construction and housing recovery in the West. In addition, continued growth of the Mexican economy and increased trade with the United States should benefit its U.S.-Mexico business. With low leverage and a projected reduction in capital expenditures, management has the ability to increase share buybacks over our investment horizon.


  • Dodge & Cox Comments on Bank of America

    The largest bank in the United States by deposits, Bank of America (NYSE:BAC) has leading positions in the lines of business that comprise the majority of its revenues, including consumer banking and wealth management. Since the financial crisis, Bank of America has gained market share in its core businesses and navigated ever tougher regulatory requirements, while increasing capital and liquidity. As a part of its restructuring plan, management has simplified the business, reduced expenses, and implemented a more customer-focused strategy. Longer term, improved fundamentals and potential cyclical tailwinds (e.g., additional loan growth, higher rates, increased capital markets activity) could produce a significantly higher return on assets, as well as multiple expansion, dividend increases, and/or share repurchases.

    Bank of America—trading at 0.8 times tangible book value and nine times forward earningsb—has one of the lowest valuations among its peers. While a prolonged low interest-rate environment would continue to pressure net interest margins and profitability, we believe the bank’s inexpensive valuation, strong business franchises, and capable management team make it a compelling investment opportunity. Hence, we added to the Fund’s position in Bank of America, which comprised 3.2% of the Fund on June 30.


  • Dodge & Cox Stock Fund 2nd Quarter Shareholder Letter

    Market Commentary

    During the first half of 2016, global equity markets were volatile and the U.S. equity market emerged as one of the best performing developed markets. In January and February, concerns about China’s economic outlook, low oil prices, and the trajectory of the global economy led to a steep decline in equity prices. The U.S. market rebounded sharply and was approaching an all-time high until the United Kingdom voted on June 23 to leave the European Union (“Brexit”), triggering a “flight to safety.” Following the vote, global equity markets declined sharply, U.S. government bonds rallied, and the U.S. dollar strengthened significantly against several major currencies, especially the British pound. The S&P 500 subsequently recovered to end the first half of the year up 4%.


  • Priceline: The Power of Earnings

    If you know nothing else about The Priceline Group Inc. (NASDAQ:PCLN), you probably know it as a company that does not split its shares. That’s apparent from a share price of more than $1,400, and behind the big share price stands a big travel company that brings in big earnings.

    The Priceline Group website


  • Is Now the Time to Invest in Motorcycle Companies?

    The motorcycle industry and the oil industry have an interesting relationship.

    When gas prices are high, many consumers turn to motorcycles to bring their transportation budgets under control. They will sometimes choose other options, such as riding bicycles, walking or taking public transportation, but many consumers prefer the freedom of personal vehicle ownership; thus, when gas prices are high and cars are seen as too expensive to operate, sales of fuel-efficient motorcycles go up, sometimes way up.


  • Van Den Berg's Best Investments of 2nd Quarter

    Arnold Van Den Berg is a value investor who has been managing Century Management since its founding in 1974. During the second quarter, the guru raised several stakes, and the following are the ones with the highest performances since those buys.

    Liberty Media Corp. (LSXMK)


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