Wallace Weitz

Wallace Weitz

Last Update: 08-11-2016

Number of Stocks: 68
Number of New Stocks: 7

Total Value: $2,663 Mil
Q/Q Turnover: 11%

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

Wallace Weitz Watch

  • Weitz Funds 3rd Quarter Value Matters

    Dear Fellow Investor:

    The third quarter of 2016 was a good one for our stock funds. In a relatively lackluster year for the stock market, each showed gains for the quarter and all are up year to date. All but one of our bond funds also showed gains in the quarter and all have earned strong returns during the first nine months of the year. The table on our website shows for all of our funds over various time frames. As usual, we suggest that the longer measuring periods are more meaningful.


  • Wallace Weitz's Largest 2nd-Quarter Trades

    Wallace Weitz (Trades, Portfolio) manages a portfolio composed of 68 stocks with a total value of $2.663 billion. During the second quarter the guru’s largest trades were:

    The investor bought 4,268,970 shares in Liberty SiriusXM Group Class C (LSXMK) with an impact of 4.95% on the portfolio.


  • 15 Questions With Wally Weitz

    1. How and why did you get started investing? What is your background?

    As a kid (12) I tagged along to a lunch with a stockbroker. Something about his pitch intrigued me and I bought “How to Buy Stocks” by Louis Engel on the way home. I bought my first stock a few weeks later and was hooked. I went through a charting phase in high school and then discovered Ben Graham while at Carleton College. My only formal training was my economics degree from Carleton.


  • Tom Gayner Buys Microsoft, Amazon

    Tom Gayner (Trades, Portfolio), executive vice president and chief investment officer of Markel Corp. (NYSE:MKL) and president of Markel Gayner Asset Management Inc., Markel's investment subsidiary since December 1990, bought shares in the following stocks in the second quarter.

    The investor acquired 522,000 shares in Liberty Media Corp. (LSXMK) with an impact of 0.42% on the portfolio.


  • Wally Weitz Comments on Laboratory Corp of America

    Laboratory Corp. of America (NYSE:LH) is a healthcare diagnostics company providing comprehensive clinical laboratory services to medical professionals and end-to-end drug development support to pharmaceutical manufacturers. LabCorp reported stronger than expected organic growth during the first quarter in both its diagnostics and drug development segments and raised its financial forecast for the full year. Covance, its drug development segment, has demonstrated improving operating momentum the past three quarters, with strength across each of its primary end markets (pre-clinical, central lab, late stage). Finally, the Center for Medicare and Medicaid Services’ (CMS’) highly anticipated Final Rule on changes to the Medicare Clinical Lab Fee Schedule in mid-June included two positives for the lab industry – a delay in implementation until 2018 and the inclusion of higher cost outpatient hospital labs, which is a piece that will determine future reimbursement levels. While final details won’t be known for some time, we anticipate these reimbursement changes will have a very modest impact on LabCorp’s future earnings power.

    From Weitz Partners Fund's second quarter 2016 commentary.


  • Wally Weitz Comments on Fossil Group

    Fossil Group (NASDAQ:FOSL) is the fourth-largest producer of watches and the largest licenser of watches and jewelry globally. Following a strong first quarter earnings report, Fossil reported disappointing results in the second quarter due to a tough consumer environment and weakness in the wholesale channel in North America and Europe. The main drivers of the wholesale channel weakness were weak foot traffic, inventory destocking and continued moderation at their largest licensed brand, Michael Kors. This difficult environment led management to cut guidance for thefull year. The retail channel and Fossil’s owned brands continued to outperform, with Skagen growing double-digits and the Fossil brand posting growth in a difficult environment. Despite low visibility over the next several quarters, we expect a rebound in 2017 led by a large pipeline of product introductions, including wearables launches across 10 brands. Furthermore, investments in brand building and omni-channel initiatives should also benefit 2017 results.

    From Weitz Partners Fund's second quarter 2016 commentary.


  • Weitz Funds Comments on Omnicon Group

    Omnicon Group (NYSE:OMC) - Omnicom is the second-largest advertising agency holding company in the world, providing marketing, advertising and communication services to clients across the globe. The Fund first purchased shares in Omnicom roughly six years ago, attracted by the industry’s oligopolistic structure; the importance (some would say necessity) of the services its agencies provide to corporate advertisers; the capital efficient nature of its business; and an undemanding price, as investors fretted over advertising budgets that were slow to rebound on the heels of the Great Recession. Omnicom compounded nicely during our period of ownership, generating an annualized total return of approximately 21%. We closed our position in April, with the stock reaching our estimate of business value.

    From Weitz Value Fund's Value second quarter 2016 commentary.


  • Weitz Funds 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. TransDigm’s shares moved higher during the second calendar quarter on better than expected results in the company’s commercial aftermarket business, the acquisition of Data Device Corporation and the raising of additional debt capital, which may signal the possibility of future mergers & acquisitions or a special dividend. Moreover, TransDigm’s investor meeting in late-June provided additional information regarding the strength and durability of the company’s business model and strategy for the foreseeable future.

    From Weitz Value Fund's Value second quarter 2016 commentary.


  • Weitz Funds Comments on Monsanto

    Monsanto (NYSE:MON) is a provider of seeds and biotech traits for corn, soybeans and cotton. Bayer, a German Life Sciences company, proposed acquiring Monsanto in the second quarter in what is a rapidly consolidating agricultural seeds and chemicals sector. Monsanto ultimately rejected Bayer’s initial offer of $122 per share as financially inadequate, but discussions remain ongoing. We have long viewed Monsanto as the highest quality franchise in agriculture, a view validated by Bayer’s acquisition proposal. The company’s earnings power is currently facing a number of headwinds, including currency effects, low commodity prices, regulatory delays and longer product introduction cycles. Nevertheless, we view its technology and research & development pipeline as second-to-none, which should allow it to create double-digit earnings growth from 2017 through 2019.

    From Weitz Value Fund's Value second quarter 2016 commentary.


  • Weitz Funds Comments on Allergan

    Allergan (NYSE:AGN) is a global specialty pharmaceutical company focusing on the development, manufacturing, marketing and distribution of generic, brand name, biosimilar and over-the-counter (OTC) pharmaceutical products. The dissolution of Allergan’s merger with Pfizer in April, delays in gaining Federal Trade Commission approval for the sale of its global generics business to TEVA and broader industry concern around prescription drug prices combined to push Allergan’s stock down by 26% during the first half of the calendar year. As we wrote in January, we like the stand-alone Allergan business without the generics business and believe the $ 40 billion sale to TEVA should soon close. There are a number of signs that growth in Allergan’s aesthetics franchise is accelerating, and the company’s key product launches – VIBERZI, VRAYLAR and KYBELLA – appear to be off to healthy starts. The combination of healthy organic growth, debt reduction and meaningful share repurchases should drive per share value creation over our investment horizon. We substantially increased the Fund’s Allergan position during the second quarter at attractive discounts to our business value estimate.

    From Weitz Value Fund's Value second quarter 2016 commentary.


  • Weitz Funds Comments on Endo International

    Endo International (NASDAQ:ENDP) is a specialty healthcare company engaged in developing, manufacturing, marketing and distributing branded pharmaceutical and generic products and medical devices. Endo experienced significantly worse than anticipated erosion at Qualitest, its legacy generic drug platform. Simply put, our analysis of the company’s competitive positioning in controlled substance generics was wrong. The competitive environment changed quickly and we were slow to recognize it. After conversations with management and a couple of the larger drug buying consortiums, we could not gain comfort in the durability of Endo’s now lower earnings base. The company’s balance sheet and potential legal obligations (liabilities relating to the company’s legacy vaginal mesh products) leave less room for error given growth challenges on the branded side of Endo’s business. Given the erosion in our investment thesis, questions about management’s ability to identify and navigate risk, and a growing list of unknowns surrounding the business, we elected to close our position and refocus our capital in more attractive opportunities.

    From Weitz Value Fund's Value second quarter 2016 commentary.


  • Weitz Funds Comments on Liberty Global

    Liberty Global (NASDAQ:LBTYA) is the largest international cable company, with operations in 14 countries providing video, broadband Internet, fixed-line telephone and mobile services to its customers. Shares fell in the first calendar quarter after an influential Wall Street analyst downgraded his outlook for the stock, principally due to concerns over continued competitive struggles in Holland. Since that time, Liberty announced it would move its Dutch operations into a 50/50 joint venture with Vodafone, allowing Liberty Global to combine its strong cable and broadband businesses with Vodafone’s mobile offering to create a more competitive, “converged” offering. Share prices declined in the second calendar quarter due to Brexit. The pound fell roughly 10% versus the U.S. dollar on the news. Without any rebound this will depress Liberty Global’s future earnings, regardless of underlying fundamentals, as its largest operation is in the United Kingdom and represents roughly 38% of its cash flow generation. Management has already turnedits attention to reducing indirect costs, better integrating its various operations, leveraging its scale and operating more efficiently. We remain confident of continued growth for Liberty Global’s cable offerings and management’s abilities to deliver operationally.

    From Weitz Value Fund's Value second quarter 2016 commentary.


  • Weitz Funds 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. Berkshire shares were helped by the closing of the Precision Castparts acquisition (in the first calendar quarter), improved operating performance at its Burlington Northern railroad subsidiary and the potential of further capital allocation opportunities. Additionally, Berkshire shares were helped by the diversification represented by the underlying businesses and continued momentum resulting from management’s general optimism about the company’s long-term prospects.

    From Weitz Value Fund's Value second quarter 2016 commentary.


  • Weitz Funds Comments on Liberty Broadband

    Liberty Broadband (LBDRA) holds a 17% ownership interest (25% aggregate voting power) in Charter Communications in addition to a minority equity interest in Time Warner Cable. Charter Communications is the fourth-largest cable operator in the U.S. and provides advanced video, high-speed internet, and telephone service to residential and business customers. In the second calendar quarter, “New Charter” was formed with a merger between Charter, Time Warner Cable and Bright House Networks. Furthermore, at the time of the merger announcement (a year and one-half ago), Liberty Broadband agreed to invest $5 billion into “New Charter” at a fixed price ($195 per share) that proved to be a material discount to Charter’s market price at the time of closing ($225 per share), thus giving Liberty Broadband shareholders an immediate unrealized gain. Our investment in Liberty Broadband represents additional upside to our business value estimate for Charter on a stand-alone basis.

    From Weitz Value Fund's Value second quarter 2016 commentary.


  • Weitz Funds Comments on Range Resources

    Range Resources (NYSE:RRC) is an independent producer of natural gas and natural gas liquids based in Fort Worth, Texas. Following a difficult 2015, Range shares rallied from depressed levels, thanks to the successful completion of non-core asset sales, long-term debt reduction and an improving natural gas outlook. In a surprise move, Range announced its intention to acquire natural gas producer Memorial Resources (MRD) in mid-May in an all-stock transaction valued at approximately $4.4 billion. Unlike many exploration & production (E&P) companies, Range has been extremely protective of its equity over the years and has generally not been acquisitive in the recent past. The Memorial purchase accomplishes a number of important objectives for Range, including further de-leveraging the company’s balance sheet as well as geographic diversity via an asset with an attractive return profile. While we remain favorably inclined toward the transaction, we took the opportunity to lighten our position in the low-$40s during the quarter as Range’s discount to our estimate of value narrowed.

    From Weitz Value Fund's Value second quarter 2016 commentary.


  • Wally Weitz's Partners Value Fund 2Q 2016 Quarterly Commentary

    Investment Style: Multi-Cap Value


  • Weitz Funds' 2nd Quarter 2016 Value Fund Commentary

    The Value Fund’s Institutional Class returned -0.41% in the second calendar quarter, compared to +2.46% for the S&P 500 and +2.54% for the Russell 1000. For the calendar year to date, the Value Fund’s


  • Wally Weitz's Value Matters: 2nd Quarter Letter to Investors

    July 5, 2016

    During the second quarter, the U.S. stock market continued its sideways movement, interrupted occasionally by sharp, temporary dips like the one after the Brexit vote. Our funds followed a similar pattern, and almost all showed modest gains at mid-year. The table on our website shows the full 33-year history of our funds.


  • Weitz Investment Value Matters Stock Market Commentary, Outlook

    During the second quarter, the U.S. stock market continued its sideways movement, interrupted occasionally by sharp, temporary dips like the one after the Brexit vote. Our funds followed a similar pattern, and all but one showed modest gains at mid-year. The table on our website shows the full 33-year history of our funds.


  • Wallace Weitz's Best-Performing Stocks

    Wallace Weitz (Trades, Portfolio) is portfolio manager of Weitz Value Fund, Weitz Hickory Fund and Weitz Partners Value Fund, which he started in 1983. He manages a portfolio composed of 63 stocks with a total value of $2.81 billion. During the first quarter of 2016, the guru increased several stakes, and the following are the ones with the highest performances.

    Liberty Global PLC (LBTYA)


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