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Sequoia Fund Showed Us Where to Look For Value: VRX, GOOG, PRGO, APOL, EDMC

November 30, 2010 | About:
guruek

guruek

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The Sequoia Fund was founded in 1970 by William Ruane, who died in Oct. 2005. Currently, the Fund ‘s investment committee consists of Richard T. Cunniff, Robert Goldfarb, and David Poppe. $10,000 invested in the fund in 1970 at inception would become $1,922,460 through June 30, 2010, dividend and distribution re-invested. Talk about fortune making!

Morningstar has recently an article on the fund entitled Sequoia Dials Down Its Concentration. It is an interesting article. You should check it out if you own the fund or are thinking about owning the fund. The article mentioned that the Fund seeks to invest in companies long-term. Typically they are looking for companies that have rock-solid balance sheet and an ability to compound capital.

The top purchases of the fund during the quarter ended on the September 30, 2010 are:

No. 1: Valeant Pharmaceuticals International (VRX), Add: 6.58% of the portfolio - Total: 34,024,824 Shares

Valeant Pharmaceuticals International, Inc. is a multinational specialty pharmaceutical company that develops, manufactures and markets a broad range of pharmaceutical products primarily in the areas of neurology, dermatology and branded generics. Valeant Pharmaceuticals International has a market cap of $7.76 billion; its shares were traded at around $25.87 with a P/E ratio of 22.3 and P/S ratio of 9.5. The dividend yield of Valeant Pharmaceuticals International stocks is 1.5%. Valeant Pharmaceuticals International had an annual average earning growth of 13.7% over the past 5 years.



No. 2: Google Inc. (GOOG), Add: 1.33% of the portfolio - Total: 631,213 Shares

Google is a public and profitable company focused on search services. Google Inc. has a market cap of $177.11 billion; its shares were traded at around $555.71 with a P/E ratio of 22.5 and P/S ratio of 7.4. Google Inc. had an annual average earning growth of 65.7% over the past 10 years.



No. 3: Perrigo Company (PRGO), Buy: 1.26% of the portfolio - Total: 1,740,140 Shares

Perrigo Company, is the nations largest manufacturer of store brand over-the-counter (non-prescription) pharmaceutical products and also manufactures store brand nutritional products. Perrigo Company has a market cap of $5.55 billion; its shares were traded at around $60.24 with a P/E ratio of 19.8 and P/S ratio of 2.5. The dividend yield of Perrigo Company stocks is 0.5%. Perrigo Company had an annual average earning growth of 17.7% over the past 10 years. GuruFocus rated Perrigo Company the business predictability rank of 2.5-star.



No. 4: Apollo Group Inc. (APOL), Add: 0.12% of the portfolio - Total: 502,000 Shares

Apollo Group, Inc. has been providing higher education to working adults for over 25 years. Apollo Group Inc. has a market cap of $5.01 billion; its shares were traded at around $34 with a P/E ratio of 6.3 and P/S ratio of 1. Apollo Group Inc. had an annual average earning growth of 23.8% over the past 10 years. GuruFocus rated Apollo Group Inc. the business predictability rank of 4-star.



No. 5: Education Management Corp. (EDMC), Add: 0.1% of the portfolio - Total: 2,006,500 Shares

Education Management LLC provides post-secondary education in North America. Education Management Corp. has a market cap of $2.01 billion; its shares were traded at around $14.08 with a P/E ratio of 8.7 and P/S ratio of 0.8.



The latest picks of the long-time value fund give a good hint on where to look for lasting values: drug companies, blue-chips tech companies, and for-profit education providers.

Check out the complete stock portfolio by clicking on Ruane Cunniff.


Rating: 2.0/5 (3 votes)

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