Ruane Cunniff

Ruane Cunniff

Last Update: 02-14-2017

Number of Stocks: 92
Number of New Stocks: 11

Total Value: $10,642 Mil
Q/Q Turnover: 8%

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

Ruane Cunniff Watch

  • David Rolfe Invests in Tractor Supply, Fastenal

    Wedgewood Partners’ David Rolfe (Trades, Portfolio) gained two new holdings and divested another in the final quarter of 2016. He established positions in Tractor Supply Co. (NASDAQ:TSCO) and Fastenal Co. (NASDAQ:FAST). He sold out of Stericycle Inc. (NASDAQ:SRCL).


    With over 29 years of portfolio management experience, Rolfe serves as the chief investment officer at Wedgewood. The firm believes significant long-term wealth is created by investing as “owners” in a company. Wedgewood seeks highly profitable companies that offer a dominant product or service, consistently grow earnings, revenues and dividends and have strong management teams that prioritize shareholders. The current portfolio is composed of 36 stocks and is valued at around $4.1 million.

      


  • Ruane Cunniff Comments on Liberty Media

    At the very end of the year, we found what we believe will be another good use for our dry powder when we joined a select group of investors in purchasing a stake in Liberty Media Group, a John Malone-affiliated company, as part of Liberty’s acquisition of the Formula One auto racing business. The deal closed on January 23, and Sequoia purchased 4.7 million shares at a discounted price of $25 per share.

    Recently, Liberty Media (NYSE:BATRR) has traded above our cost basis in the public market. Sequoia’s allocation will be restricted for several months, meaning we won’t be able to sell the shares. During that time, accounting rules require us to price the stock at a modest discount to its market price to reflect its illiquidity. Undoubtedly, the share price will fluctuate during the lock-up period, but we’re delighted to have acquired shares at what we believe is an attractive price. More importantly, we believe Formula One is a powerful global brand and Liberty will be an excellent manager. Our expectation is to own the shares for years.

    Formula One is the leading global automotive sport with an estimated 400 million fans around the world. While Formula One has grown considerably under the leadership of Bernie Ecclestone over the last three decades, we believe new management has significant opportunities to further improve and grow the sport. Liberty Chairman John Malone and CEO Greg Maffei have exceptional track records as capital allocators and value creators, and we believe they have found a superb manager in Chase Carey to run Formula One. Mr. Carey had successful tenures at Fox Broadcasting, DirecTV, News Corp. and 21st Century Fox and has particular expertise in sports businesses. We believe there is room to improve revenue from broadcast, advertising and sponsorship sources, while also developing a digital business that captures younger fans. Importantly, our return assumptions do not depend on the sport succeeding in immature markets such as the US and China.



    From Ruane Cunniff (Trades, Portfolio)'s Sequoia Fund 4th quarter shareholder letter.
      


  • Ruane Cunniff Comments on Amazon

    In the fall, we exited our small position in Walmart and replaced it with a similarly small position in Amazon (NASDAQ:AMZN). The company’s e-commerce operation (Amazon.com) and its cloud computing platform (Amazon Web Services) are two of the most advantaged businesses we’ve analyzed in quite some time. Both are growing fast and have miles of runway ahead of them. And they are run by arguably the most talented, customer-focused and long term-oriented businessman of his generation.

    At a consolidated level, Amazon produces very little in the way of reported profits. Amazon Web Services, whose financials are disclosed separately, earns very rich margins, but the larger e-commerce business reports scant earnings. Our research indicates that the company’s e-commerce business has substantial earnings power that is being masked by a variety of ambitious growth investments. The Fund purchased shares at what we believe to be a reasonable multiple of underlying earnings power excluding those investments. Estimating the long-term potential of Amazon’s many investments is an inherently imprecise exercise, which is why the investment thus far has been a small one.


    From Ruane Cunniff (Trades, Portfolio)'s Sequoia Fund 4th quarter shareholder letter.
      


  • Ruane Cunniff Comments on Chipotle

    Chipotle (NYSE:CMG) has been a weak performer, down 13% since purchase through the end of 2016. We knew Chipotle faced a long road to recovery after several outbreaks of food-borne illnesses frightened customers away, but we were attracted by the enormous potential of the business, which could grow for many years and generate high returns if the executive team manages the recovery adeptly. Chipotle is making changes to management and its board of directors, including adding a director who played a key role in the turnaround at McDonald’s a decade ago. Recently reported sales figures for December showed encouraging gains in customer traffic, but we are watching carefully, as the pace of recovery thus far has fallen short of our initial expectations.

    From Ruane Cunniff (Trades, Portfolio)'s Sequoia Fund 4th quarter shareholder letter.
      


  • Ruane, Cunniff & Goldfarb's Sequoia Fund 4th Quarter Shareholder Letter

    Dear Shareholder:

      


  • O’Reilly Automotive: Does Debt Diminish Its Value Stock Status?

    O’Reilly Automotive Inc. (NASDAQ:ORLY) currently holds a spot on the Undervalued Predictable screener list at GuruFocus due to a couple of recent dips in the share price:


    ORLY 3 month share price

      


  • John Rogers Boosts Berkshire, Rockwell Collins, Tiffany

    John Rogers (Trades, Portfolio) founded Ariel Investment LLC in 1983, and the firm now has a total value of $8.267 billion. During the third quarter the guru’s largest buys were the following:


    The investor raised his position in Berkshire Hathaway Inc. Class B (BRK.B) by 151.06% with an impact of 0.44% on the portfolio.

      


  • 21 Questions for Bluegrass Capital's Founder

    Thank you for your interest in me. I am a longtime follower of your site and hope my responses prove useful to at least a few of your readers. I look forward to other interviews in this series.


    19. Describe some of the biggest mistakes you have made value investing. What are your three worst investments? What did you learn and how do you avoid those mistakes today?

      


  • Ruane Cunniff Makes One Significant Buy

    On Tuesday, Ruane Cunniff (Trades, Portfolio) disclosed its first quarterly update since losing significantly on a position in Valeant Pharmaceuticals (NYSE:VRX), a fast-growing drug maker accused of price gouging and a dubious relationship with a pharmacy. The firm’s Sequoia Fund made only one large purchase during the third quarter, Dentsply Sirona (NASDAQ:XRAY).


    Sequoia owned Sirona, the original company, since 2011, according to its third-quarter letter. Sirona, a dental products maker, merged with Dentsply, a dental consumables company, in February to create the world’s largest professional dental company, supplying to labs, dental offices and clinics worldwide. Dentsply Sirona has a global headquarters in York, Pennsylvania, international headquarters in Salzburg, Austria, and a market cap of $13.44 billion.

      


  • Ruane Cunniff Comments on Wells Fargo

    We did not add to or reduce our 2% position in Wells Fargo (NYSE:WFC) during the quarter, but recent events prompt us to share our thoughts on the bank with you. News emerged in September that since 2011, Wells Fargo employees had created up to 2.1 million sham customer accounts in order to meet aggressive sales quotas set by bank management. While this behavior caused the bank to fire some 5,300 employees over a period of five years, the bank was distressingly slow to change the incentives that prompted this bad behavior. We believe that Wells management has damaged the bond of trust the bank had built with its customers, and that senior executives should be held accountable for the practices their policies engendered. That said, it is important to note that only about 5% of the unauthorized accounts had fees associated with them—and that these fees came to about $2.6 million in total. Wells Fargo is an enormous enterprise, with 93 million customer accounts and $22.4 billion of net income in the past year. The sham accounts did not make money for Wells, and more likely cost it money as the bank paid bonuses to employees who opened inactive accounts. Wells has suffered deep reputational damage and we will keep a watchful eye on the remedies proposed by management, but we believe Wells remains an attractive franchise with a low valuation.

    From Ruane Cunniff (Trades, Portfolio)'s Sequoia Fund third quarter 2016 letter to shareholders.  


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