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Bill Ngren Commentary: Oakmark Select Fund - Second Quarter 2014; Buys Amazon, Citigroup, Fidelity National, Google
Posted by: GuruFocus (IP Logged)
Date: July 10, 2014 10:19AM
The Oakmark Select Fund increased 6% for the quarter, compared to 5% for the S&P 500 Index. Three quarters into our 2014 fiscal year, the Oakmark Select Fund has returned 25%, compared to 18% for the S&P 500 Index. Our best performers in the quarter were Apache and Intel, up more than 20% each, while a couple of our financial stocks, Bank of America and JP Morgan Chase, led the laggards with losses of 11% and 4%, respectively.
During the quarter we added four new positions to the Fund (Amazon, Citigroup, Fidelity National, and Google) and eliminated four others (Cenovus, Comcast, DIRECTV, and Kennametal). While this is an unusual amount of activity for us, it was driven by the attractiveness of the new additions, discussed individually below. As we’ve said before, we don’t manage the Fund to meet artificial criteria such as turnover ratios, sector weightings, or style boxes. Our investment process is to buy a business at a significant discount to our estimate of intrinsic value, where we believe that value will grow over time on a per-share basis, led by management teams focused on maximizing this per-share value. The consistent application of this process is what drives our position changes.
Our bottom-up company analysis is identifying attractive investment opportunities which today can often be classified into one of two categories: great businesses selling for average prices, and financial companies currently mispriced relative to their long-term earnings power. Our four new purchases this quarter each fit into one of those themes.
Amazon.com, Inc. (AMZN)
Citigroup Inc. (C)
Fidelity National Financial (FNF)
Google Inc. (GOOGL)
Anthony P. Coniaris, CFA
Guru Discussed: Bill Nygren: Current Portfolio, Stock Picks
Stocks Discussed: AMZN, C, FNF, GOOGL,
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