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Value Shop Tweedy Browne Q2 Update: Buys TOT, CAJ, VOD, : WFC, JNJ, FII, COP, SYY, MA, LMT,

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gurufocus

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Long term value investing firm Tweedy Browne just reported their second quarter portfolio. The firm buys Wells Fargo & Co., Johnson & Johnson, Federated Investors Inc., ConocoPhillips, Sysco Corp., MasterCard Cl A, Lockheed Martin Corp., Total S.a. Ads, Canon Inc. Ads, Vodafone Group Plc, sells Henry Schein Inc., Genuine Parts Co., G&K Services Inc. during the 3-months ended 06/30/2011, according to the most recent filings of his investment company, Tweedy Browne CO LLC. As of 06/30/2011, Tweedy Browne CO LLC owns 59 stocks with a total value of $3 billion. These are the details of the buys and sells.

Tweedy, Browne is an investment management firm established in 1920 by Bill Tweedy. Originally serving as a broker-dealer of illiquid and closely-held securities, Tweedy’s practice entered the limelight when he met legendary investor, Benjamin Graham.

Graham, a professor at Columbia Business School, concluded that there were more rewards to be had in managing money then teaching how to do so. As such, when Graham embarked on his investment career, Tweedy’s practice fell in line with Graham’s philosophy. In fact, Graham would serve as Tweedy’s largest client, with a relationship so closely knitted, their respective practices laid side by side on 52 Wall Street.

Tweedy, Browne’s prominence would lead to future relationships with legendary investors such as Schloss and Buffett. In 1959, the original partners launched their own investment vehicle that would serve as the foundation of the modern-day Tweedy, Browne. Currently, the firm is led by a quadruplet of managing directors: William H. Browne, Thomas H. Shrager, John D. Spears and Robert Q. Wyckoff.

In terms of operations, when considering assets under management in descending value, the fund utilizes four primary funds: Global Value, Global Value II, Value Fund, and the Worldwide High Dividend Yield fund. Although there are differences in the specialty of each of the aforementioned funds, each fund seeks “long-term growth of capital” in equities that Tweedy, Browne feels is undervalued. The only differentiating factor of the dividend yield fund is that it seeks investments in companies with an established history of above-average dividends.

Inherently, the firm utilizes a value-oriented approach to their investments. This approach involves the key step of rendering an intrinsic value of an equity through due diligence. Once this valuation is established, an investment is made only if a significant margin of safety can be established.

Tweedy, Browne’s holding policy is to sell a security as it approaches its intrinsic value, in order to reinvest the capital into other opportunities. To actually render the valuation and to conduct due diligence, the balance sheet and income statements are heavily stressed. In addition, it is the firm’s philosophy not to invest more than 3-5% of each fund into a single asset, nor to limit their investments by capitalization size. Key characteristics sought are:

A. Low P/B ratio

B. Low P/E ratio

C. Above average dividend yield

D. Low P/S ratio

E. Increased insider buys

F. Prices trading far from highs

G. Low corporate leverage

In terms of performance, the value fund will be utilized as the focal point of representation of the fund due to its representative profile. For the two most recent years, the fund returned 27.60% and 10.51% respectively. Comparatively speaking, the S&P 500 returned 26.47% and 15.06% for the same period. Currently, the fund has a return of 5.18% for the year, versus the benchmark’s return of 7.82%. However, when the fund is examined in terms of its long term performance, it has outperformed the benchmark. The 10-year cumulative return of the fund is 42.7% vs. the benchmark return of 16.4%. Since the value fund’s inception in 1993, it has returned 8.74% annually vs. the benchmark’s return of 8.28%.

This is the portfolio chart of Tweedy Browne. You can click on the legend of the chart to show/hide buys, sells, or holdings. Each ball on the chart represents a position in the portfolio. You can move your mouse on the balls to see the details of each position and click to see the details of all guru trades with this position.



For the details of Tweedy Browne's stock buys and sells, go to http://www.gurufocus.com/StockBuy.php?GuruName=Tweedy+Browne

This is the sector weightings of his portfolio:

Consumer Goods 27.2%
Financials 22.4%
Industrials 13.5%
Health Care 13.4%
Oil & Gas 9.7%
Consumer Services 5.7%
Telecommunications 4.9%
Technology 1.9%
Not Assigned 1.3%


These are the top 5 holdings of Tweedy Browne

  1. Philip Morris International (PM) - 6,004,092 shares, 13.2255% of the total portfolio. Shares reduced by 7.15%
  2. Johnson & Johnson (JNJ) - 2,974,366 shares, 6.5273% of the total portfolio. Shares added by 3.87%
  3. ConocoPhillips (COP) - 2,565,742 shares, 6.3644% of the total portfolio. Shares added by 2.53%
  4. Baxter International Inc. (BAX) - 2,988,245 shares, 5.8844% of the total portfolio. Shares reduced by 0.57%
  5. CocaCola Femsa S.A.B. De C.V. ADS (KOF) - 1,829,916 shares, 5.6149% of the total portfolio. Shares reduced by 3.45%


Added: Wells Fargo & Co. (WFC)

Tweedy Browne added to their holdings in Wells Fargo & Co. by 125%. Their purchase prices were between $25.36 and $32.4, with an estimated average price of $28.41. The impact to their portfolio due to this purchase was 1.89%. Their holdings were 3,674,844 shares as of 06/30/2011.

Wells Fargo & Company is a diversified financial services company providing banking, insurance, investments, mortgage and consumer finance services through stores, its Internet site and other distribution channels across North America as well as internationally. Wells Fargo & Co. has a market cap of $133.34 billion; its shares were traded at around $25.74 with a P/E ratio of 9.77 and P/S ratio of 1.43. The dividend yield of Wells Fargo & Co. stocks is 1.9%. Wells Fargo & Co. had an annual average earnings growth of 5.4% over the past 10 years.

Added: Johnson & Johnson (JNJ)

Tweedy Browne added to their holdings in Johnson & Johnson by 3.87%. Their purchase prices were between $59.46 and $67.29, with an estimated average price of $64.8. The impact to their portfolio due to this purchase was 0.24%. Their holdings were 2,974,366 shares as of 06/30/2011.

Johnson & Johnson is engaged in the manufacture and sale of a broad range of products in the health care field in many countries of the world. Johnson & Johnson has a market cap of $171.9 billion; its shares were traded at around $61.84 with a P/E ratio of 12.82 and P/S ratio of 2.79. The dividend yield of Johnson & Johnson stocks is 3.64%. Johnson & Johnson had an annual average earnings growth of 9.3% over the past 10 years. GuruFocus rated Johnson & Johnson the business predictability rank of 4-star.

Added: Federated Investors Inc. (FII)

Tweedy Browne added to their holdings in Federated Investors Inc. by 15.04%. Their purchase prices were between $23.62 and $26.97, with an estimated average price of $25.43. The impact to their portfolio due to this purchase was 0.22%. Their holdings were 2,107,314 shares as of 06/30/2011.

Federated Investors, Inc. is a provider of investment management and related financial services. Federated Investors Inc. has a market cap of $2.04 billion; its shares were traded at around $19.67 with a P/E ratio of 11.29 and P/S ratio of 2.15. The dividend yield of Federated Investors Inc. stocks is 4.92%. Federated Investors Inc. had an annual average earnings growth of 1% over the past 10 years.

Added: Sysco Corp. (SYY)

Tweedy Browne added to their holdings in Sysco Corp. by 35.31%. Their purchase prices were between $27.88 and $32.65, with an estimated average price of $30.35. The impact to their portfolio due to this purchase was 0.16%. Their holdings were 590,693 shares as of 06/30/2011.

Sysco Corporation is the largest North American distributor of food and food related products to the foodservice or `food-prepared-away-from-home` industry. Sysco Corp. has a market cap of $17.19 billion; its shares were traded at around $29.08 with a P/E ratio of 15.67 and P/S ratio of 0.46. The dividend yield of Sysco Corp. stocks is 3.53%. Sysco Corp. had an annual average earnings growth of 8.6% over the past 10 years. GuruFocus rated Sysco Corp. the business predictability rank of 3.5-star.

Added: Conocophillips (COP)

Tweedy Browne added to their holdings in Conocophillips by 2.53%. Their purchase prices were between $70.57 and $81.21, with an estimated average price of $74.54. The impact to their portfolio due to this purchase was 0.16%. Their holdings were 2,565,742 shares as of 06/30/2011.

ConocoPhillips is a major international integrated energy company with operations in some 49 countries. Conocophillips has a market cap of $95.77 billion; its shares were traded at around $66.92 with a P/E ratio of 9.61 and P/S ratio of 0.48. The dividend yield of Conocophillips stocks is 3.9%. Conocophillips had an annual average earnings growth of 21.1% over the past 10 years.

Added: Mastercard Cl A (MA)

Tweedy Browne added to their holdings in Mastercard Cl A by 12.95%. Their purchase prices were between $253.55 and $309.7, with an estimated average price of $274.05. The impact to their portfolio due to this purchase was 0.14%. Their holdings were 120,460 shares as of 06/30/2011.

MASTERCARD INCORPORATED advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. Mastercard Cl A has a market cap of $41.55 billion; its shares were traded at around $322.6 with a P/E ratio of 20.22 and P/S ratio of 7.5. The dividend yield of Mastercard Cl A stocks is 0.18%.

Added: Lockheed Martin Corp. (LMT)

Tweedy Browne added to their holdings in Lockheed Martin Corp. by 52.18%. Their purchase prices were between $75.73 and $81.49, with an estimated average price of $79.03. The impact to their portfolio due to this purchase was 0.09%. Their holdings were 97,630 shares as of 06/30/2011.

Lockheed Martin Corp. is a global enterprise principally engaged in the research, design, development, manufacture and integration of advanced-technology systems, products and services. Lockheed Martin Corp. has a market cap of $25.45 billion; its shares were traded at around $71.32 with a P/E ratio of 9.66 and P/S ratio of 0.56. The dividend yield of Lockheed Martin Corp. stocks is 4.12%. Lockheed Martin Corp. had an annual average earnings growth of 17% over the past 10 years. GuruFocus rated Lockheed Martin Corp. the business predictability rank of 4.5-star.

New Purchase: Total S.a. Ads (TOT)

Tweedy Browne initiated holdings in Total S.a. Ads. Their purchase prices were between $53.31 and $64.23, with an estimated average price of $58.07. The impact to their portfolio due to this purchase was 0.06%. Their holdings were 32,640 shares as of 06/30/2011.

Total Fina SA engages in worldwide oil and gas production, other upstream, RM&T and an expanding multi-national specialty chemicals business. Total S.a. Ads has a market cap of $115.98 billion; its shares were traded at around $49 with a P/E ratio of 7.28 and P/S ratio of 0.53. The dividend yield of Total S.a. Ads stocks is 5.41%. Total S.a. Ads had an annual average earnings growth of 12.6% over the past 10 years. GuruFocus rated Total S.a. Ads the business predictability rank of 2.5-star.

New Purchase: Canon Inc. Ads (CAJ)

Tweedy Browne initiated holdings in Canon Inc. Ads. Their purchase prices were between $42.22 and $47.98, with an estimated average price of $45.69. The impact to their portfolio due to this purchase was 0.04%. Their holdings were 25,575 shares as of 06/30/2011.

Canon, Inc. is an industry leader in professional and consumer imaging equipment and information systems. Canon Inc. Ads has a market cap of $55.93 billion; its shares were traded at around $45.32 with a P/E ratio of 19.29 and P/S ratio of 1.22. The dividend yield of Canon Inc. Ads stocks is 3.13%. Canon Inc. Ads had an annual average earnings growth of 12.4% over the past 10 years.

New Purchase: Vodafone Group Plc (VOD)

Tweedy Browne initiated holdings in Vodafone Group Plc. Their purchase prices were between $25.75 and $29.39, with an estimated average price of $27.71. The impact to their portfolio due to this purchase was 0.01%. Their holdings were 8,200 shares as of 06/30/2011.

Vodafone AirTouch Plc is the world's largest international mobile communications firm. Vodafone Group Plc has a market cap of $133.28 billion; its shares were traded at around $25.89 with and P/S ratio of 1.9. The dividend yield of Vodafone Group Plc stocks is 7.4%.

Reduced: Henry Schein Inc. (HSIC)

Tweedy Browne reduced to their holdings in Henry Schein Inc. by 28.82%. Their sale prices were between $68.38 and $74.08, with an estimated average price of $70.91. The impact to their portfolio due to this sale was -0.27%. Tweedy Browne still held 290,144 shares as of 06/30/2011.

Henry Schein, Inc. is the largest distributor of healthcare products and services to office-based healthcare practitioners in the combined North American and European markets. Henry Schein Inc. has a market cap of $5.6 billion; its shares were traded at around $60.07 with a P/E ratio of 16.1 and P/S ratio of 0.7. Henry Schein Inc. had an annual average earnings growth of 13.6% over the past 10 years. GuruFocus rated Henry Schein Inc. the business predictability rank of 4.5-star.

Reduced: Genuine Parts Co. (GPC)

Tweedy Browne reduced to their holdings in Genuine Parts Co. by 35.64%. Their sale prices were between $49.82 and $55.9, with an estimated average price of $53.09. The impact to their portfolio due to this sale was -0.2%. Tweedy Browne still held 200,725 shares as of 06/30/2011.

GENUINE PARTS COMPANY is a distributor of automotive replacement parts in the U. Genuine Parts Co. has a market cap of $7.82 billion; its shares were traded at around $49.36 with a P/E ratio of 14.88 and P/S ratio of 0.7. The dividend yield of Genuine Parts Co. stocks is 3.62%. Genuine Parts Co. had an annual average earnings growth of 6.9% over the past 10 years. GuruFocus rated Genuine Parts Co. the business predictability rank of 4-star.

Reduced: G&k Services Inc. (GKSR)

Tweedy Browne reduced to their holdings in G&k Services Inc. by 28.21%. Their sale prices were between $29.8 and $34.06, with an estimated average price of $31.9. The impact to their portfolio due to this sale was -0.02%. Tweedy Browne still held 41,691 shares as of 06/30/2011.

G&K Services, Inc. is a market leader in branded identity apparel programs and facility services in the United States, and is the largest such provider in Canada. G&k Services Inc. has a market cap of $518.4 million; its shares were traded at around $28.14 with a P/E ratio of 17.9 and P/S ratio of 0.6. The dividend yield of G&k Services Inc. stocks is 1.4%.

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gurufocus
GuruFocus - Stock Picks and Market Insight of Gurus

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