Wallace Weitz

Wallace Weitz

Last Update: 11-13-2015

Number of Stocks: 67
Number of New Stocks: 5

Total Value: $3,195 Mil
Q/Q Turnover: 11%

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

Wallace Weitz Watch

  • A Look at Most Recent Insider Trades

    The All-In-One Screener can be used to find insider buys and sales over the last week by clicking on the Insiders tab and changing the settings for All Insider Buying/All Insider Selling to “$1,000,000+” and duration to "November 2015."

    According to the above filters, the following are the recent buys from company insiders in the past week.


  • Wallace Weitz Sells Stake in Martin Marietta Materials

    Wallace Weitz (Trades, Portfolio) of Weitz Investment Management, where he is portfolio manager for Weitz Value Fund, Weitz Hickory Fund and Weitz Partners Value Fund, has an investing philosophy that is best described as a blend. It combines price sensitivity and margin of safety with a belief in a marketplace version of free will.

    Weitz Partners Fund recorded returns exceeding 30% in 2013.


  • Why Wallace Weitz Added to Stake in Redwood Trust

    For the second quarter in a row, Wallace Weitz added to his position in Redwood Trust Inc. (NYSE:RWT), which brings his firm's ownership to 7.4% of Redwood Trust's outstanding shares. Other gurus who own Redwood Trust include NWQ Managers (Trades, Portfolio) and Arnold Schneider (Trades, Portfolio).

    Redwood is a somewhat unique REIT that has both a securities portfolio and a taxable securitization business. The investment portfolio owns a variety of consumer and commercial mortgage securities that generate interest income and may provide price appreciation. The securitization and whole loan platform earn fees from RMBS securitizations and residential and commercial whole loan sales. This business also generates securities that are purchased internally for the securities portfolio. The firm is internally managed and is flexible in the securities they can own, strategies they can initiate and how they want to generate fees through their securitization/whole loan platform.


  • Weitz Funds Comments on Praxair

    Praxair (NYSE:PX) is an industrial gas supplier of Oxygen, Argon, Hydrogen and Helium in North and South America, Asia and Europe. These gases are integral to many industrial processes yet are often a tiny fraction of overall production costs. As a result, the industry is consolidated with only four global rational participants, which translates into pricing power for Praxair. Roughly a quarter of the company’s industrial gas production is under “take or pay” arrangements, providing coverage of fixed costs in downturns. Praxair management has proven to be excellent operators and capital allocators. The recent industrial sector downturn provided an opportunity for purchase. Prior to purchase, the company had been on our “On-Deck” list for several years.


  • Weitz Funds Comments on MRC Global

    MRC Global (NYSE:MRC) is a distributor of pipes, valves, fittings and related products to the upstream, midstream and downstream energy industries. A glut of global oil supply, growing demand uncertainty and a more discerning credit market have resulted in continued declines in oil field activity levels and fears of delays in larger pipeline and petrochemical projects. In August, MRC management sounded a more cautious tone about the possibility of a pickup in demand during 2016. Despite a challenging near-term outlook, we believe MRC’s competitive position in the industry continues to improve and that its earnings and cash flows will be significantly higher when activity levels return to more normal levels.


  • Weitz Funds Comments on MasterCard

    MasterCard (NYSE:MA) is the world’s second largest payment network and one of the best known global brands, needing little introduction. The Fund began building a position below $85 during the broader market swoon in August at a nice discount to our base case estimate of intrinsic value. MasterCard is among the most attractive businesses we own. Its network is well entrenched within the plumbing of payment systems across the globe, the transition from cash to digital forms of payment provides growth opportunities over and above underlying economic expansion, and its core business produces healthy doses of excess cash flow with modest reinvestment requirements. We would welcome additional opportunities to add to the Fund’s position.


  • Weitz Funds Comments on Redwood Trust

    Redwood Trust (NYSE:RWT) invests in mortgage-related and other real estate-related assets and is engaged in residential and commercial mortgage banking activities. A volatile interest rate environment and increased competition in each of Redwood Trust’s business segments (residential and commercial mortgage banking) has resulted in lower than expected volumes and profitability through the first three quarters of 2015. Despite difficult market conditions, the company has remained profitable in each of its business segments. Additionally, Redwood continues to enhance its competitive advantage across its platforms and remains well positioned to take advantage of potential government-sponsored enterprise reform, the eventual revitalization of private-label residential securitization and new commercial investment opportunities. In hindsight, the market may have been assigning an overly aggressive timeline to Redwood’s earnings progression. We believe, however, that the market valuation of less than book value now overly discounts Redwood’s future earnings capabilities. While we wait for that value to be realized, a dividend yield of nearly 8% should enhance future total return.

    From Wallace Weitz (Trades, Portfolio)'s Balanced Fund commentary for third quarter 2015.   

  • Wallace Weitz Comments on Prestige Murphy USA

    Murphy USA (NYSE:MUSA) is a retail marketing company of motor fuel products and convenience merchandise through a chain of retail stations. Shares of Murphy USA benefited from improving investor sentiment during the third quarter, given its already low valuation, as well as further declines in gas prices. Falling prices at the pump have traditionally led to more favorable margins for Murphy. Furthermore, Murphy continues to make good progress on returning excess capital to shareholders.

    From Wallace Weitz (Trades, Portfolio)'s Hickory Fund commentary for third quarter 2015.   

  • Wallace Weitz Comments on Prestige Brands Holdings

    Prestige Brands Holdings is engaged in the marketing, sales and distribution of brand name, over-the-counter healthcare and household cleaning products to mass merchandisers and drug stores in North America, Australia and other international markets. Prestige’s stock has appreciated due to an improved outlook for their consumer health products and the Company’s recent acquisition of the Monistat brand which appears on track to deliver additional future growth. We eliminated the position in the third quarter when the stock price reached our business value estimate.

    From Wallace Weitz (Trades, Portfolio)'s Hickory Fund commentary for third quarter 2015.   

  • Weitz Funds Comments on Fossil Group

    Fossil Group (NASDAQ:FOSL) is the fourth largest producer of watches and the largest licenser of watches and jewelry globally. Fossil’s stock has been weighed down due to their largest licensed brand, Michael Kors, reporting a material deceleration in their North American business, along with concerns surrounding watch category growth globally. Growth concerns in the U.S. are being driven by sluggish foot traffic in malls and department stores and broad based de-stocking by Fossil’s license partners as they remain cautious ahead of new smartwatch entrants and an uncertain consumer environment. Fossil has added additional licensed brands to their portfolio, including Kate Spade, Tory Burch and Ralph Lauren’s Chaps, which will provide diversification and less exposure to individual brands going forward. We view the headwinds facing the traditional watch industry as cyclical and have taken advantage of investors’ fear of secular decline by adding to our position.

    From Wallace Weitz (Trades, Portfolio)'s Research Fund commentary for third quarter 2015.


  • Wallace Weitz Comments on Post Holdings

    Post Holdings (NYSE:POST) is a consumer packaged goods holding company whose products are sold through a range of channels, such as grocery, drug stores, foodservice and the Internet. The company has been transforming itself from a branded cereal manufacturer into a food holding company with a more growth-oriented portfolio in protein, private label and value cereals. Post’s stock has appreciated due to an improved outlook for Post’s overall businesses and prospects for the recently acquired Malt-O-Meal brands. Prior investor concerns about the impact of Avian Influenza on Post’s Michael Foods unit have become muted as it appeared the outbreak would likely be one-time in nature and the financial impact less than feared. In addition, Post benefited from a capital raise of equity and debt which delivered the business, putting the company in a better position to take advantage of future value-enhancing M&A. We eliminated the position in the third quarter when the stock traded above our business value estimate.

    From Wallace Weitz (Trades, Portfolio)'s Partners Value Fund commentary for third quarter 2015.   

  • Wallace Weitz Comments on Google

    Google (NASDAQ:GOOGL) is a multinational technology company generally specializing in Internet related services and products. Google’s stock price increased as reported earnings exceeded expectations due to better expense controls and accelerated revenue growth in Google’s core search businesses, where mobile search and YouTube showed particular strength. Furthermore, CFO Ruth Porat provided some hope of returning some of Google’s excess cash to shareholders. While we remain unconvinced that controlling shareholders Brin and Paige will return cash to shareholders as Porat’s comments suggest, we would welcome it as it would provide additional upside to our base case valuation. In addition, the stock price was also helped by the announcement of the creation of a holding company called Alphabet, implemented on Oct. 2, which will consist of several subsidiaries the largest of which will be the Google Internet Services (search, apps, android, YouTube etc.). Alphabet will hold several other companies that used to sit inside Google which represent longer term initiatives not directly related to Internet Services such as Nest, Calico Healthcare and Google Fiber. We believe this is a positive move as it may entail further disclosures of both the highly profitable Google Internet Services business and the company’s other venture investments.

    From Wallace Weitz (Trades, Portfolio)'s Partners Value Fund commentary for third quarter 2015.   

  • Wallace Weitz Comments on Berkshire Hathaway

    Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) is a conglomerate holding company owning subsidiaries engaged in a number of business activities. A tepid insurance outlook caused by a general lack of pricing, combined with a dour near-term outlook for Berkshire’s railroad and industrial businesses has caused Berkshire’s stock price to retreat over the calendar year. With respect to insurance, Berkshire in our view, is behaving properly and building value as it holds capital in anticipation of better future pricing. While the industrial businesses of Berkshire are seeing temporary headwinds we believe they continue to grow and build the per share value of the company. The company’s third quarter purchase of Precision Castparts (a business we own) was at a fair price and represents yet another long-term compounder in the Berkshire portfolio. We have been adding to our position over the calendar year on price weakness.

    From Wallace Weitz (Trades, Portfolio)'s Partners Value Fund commentary for third quarter 2015.   

  • Wallace Weitz Comments on Iconix Brand Group

    Iconix Brand Group (NASDAQ:ICON) is a brand management company and owner of a diversified portfolio of global consumer brands across women’s and men’s fashion, entertainment and home segments. Iconix has endured a complete change of senior management with the CFO, COO and CEO all leaving in the first half of the fiscal year. In addition, the company has had to adjust earnings expectations down, as continued disappointment in the men’s division and a shift in timing of revenue from the anticipated November launch of The Peanuts feature film made meeting original guidance difficult. We have revisited our key assumptions behind our Iconix investment and are comfortable that the underlying asset-lite, high margin, licensing business model remains intact. While investors have become nervous about the company’s high leverage, Iconix has minimum revenue guarantees from many of its licensees which provides a reliable stream of free cash flow. Our continued due diligence including conversations with interim CEO Peter Cuneo, who has extensive consumer product licensing experience, provides comfort that Iconix is headed in the right direction. We added to our position over the calendar year on price weakness.

    From Wallace Weitz (Trades, Portfolio)'s Partners Value Fund commentary for third quarter 2015.   

  • Wallace Weitz Comments on Avon Products

    Avon Products (NYSE:AVP) is a manufacturer and marketer of beauty and related products. As management guides the company through an operational turnaround in North America and tries to build a more enduring foundation in all of its markets, Avon continues to suffer from the difficulties imposed by an emerging market slowdown. While Avon has demonstrated some progress in its long turnaround, worries over macroeconomic conditions, the continued strength of the dollar and the weakness of the Brazilian Real have made forecasting difficult. Management has been forced to respond to immediate issues at the expense of longer-term challenges involving representative engagement and the company’s supply chain. We believe management is up to the difficult task of balancing out the company’s short- and long-term investments. Avon has an extensive operating history in Latin America and has managed through several currency crises in these countries. While global challenges remain, the turmoil in Latin America may actually help the company in its recovery as women seek to supplement depressed incomes by selling Avon’s products. We have continued to add to the position over the calendar year on price weakness.

    From Wallace Weitz (Trades, Portfolio)'s Partners Value Fund commentary for third quarter 2015.   

  • Wallace Weitz Comments on TransDigm Group

    TransDigm Group (NYSE:TDG) is a designer, producer and supplier of engineered aircraft components for use on commercial and military aircraft. With the PneuDraulics acquisition having closed in August, TransDigm has officially completed its busiest, and perhaps most attractive, year of acquisitions since fiscal 2011. Heavy on commercial aftermarket assets, the 2015 class should provide a nice multi-year runway for growth and operational improvement. CEO Nick Howley and his team have capitalized on low interest rates and an accommodating credit environment over the past several years, growing the company’s underlying business value at an attractive rate. While we continue to see good things ahead for TransDigm over the next several years, we lightened the Fund’s position during the calendar third quarter as its discount to estimated value narrowed.

    From Wallace Weitz (Trades, Portfolio)'s Partners Value Fund commentary for third quarter 2015.   

  • Wallace Weitz: A Humble and Intelligent Investor

    With the financial markets dropping more than 10% between July and August, it was appropriate that Wallace Weitz, who embodies calmness and discipline, lecture my Texas Lutheran University students. It was homecoming weekend and amid the excitement, we were fortunate to have the man known as “the other Oracle of Omaha” fly down for a two hour question-and-answer session.


  • Wallace Weitz Exits Valeant, Issues Statement

    Wallace Weitz (Trades, Portfolio), founder of $5 billion Weitz Investment Management, told investors yesterday via his website that they had jettisoned their entire position in Valeant Pharmaceuticals (NYSE:VRX).

    “While we don't usually comment on individual portfolio holdings intra-quarter, we have received questions regarding Valeant Pharmaceuticals,” The Weitz Funds statement on Valeant said. “Valeant was a very profitable investment for our funds over the past four years. As of the September quarter-end we had significantly reduced our positions. Recent developments about the company’s pharmacy relationships, pricing policies and business practices led us to sell our remaining shares in late October. We no longer own Valeant in our client portfolios or mutual funds."  

  • My Indirect Experiences With Valeant Pharmaceuticals

    Valeant Pharmaceuticals International Inc. (NYSE:VRX) has been a hot topic recently with high-profile investors and short sellers both involved in one of the most interesting dramas ever. Valeant's shareholder base includes some of the most admired investors including Bill Ackman (Trades, Portfolio), Jeff Ubben (Trades, Portfolio), the Sequoia Fund, Lou Simpson (Trades, Portfolio) and Wallace Weitz. It is really fascinating to watch on the sideline as the events unfold.

    This is not intended to add any personal thoughts on whether or not Valeant’s business is legitimate or not as I don’t know enough about the business to have useful insights. But over the past year, I’ve been exposed to Valeant in a few incidents, which I think may be worthwhile to share with the readers.


  • Wallace Weitz's Lecture at Texas Lutheran University

    Wallace Weitz founder of Weitz Investment gave a lecture at Texas Lutheran University recently.

    Wally Weitz at Texas Lutheran University:


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