Top Holdings of David Winters
Regarding management, he said at an interview with Reuters: "The biggest and hardest lesson I've learned, and I've learned it a couple of times, is management is critical," he said. "The big winners have been the people who ran the company and did a swell job."
Prior to forming Wintergreen Advisers in May 2005, Mr. Winters worked for Franklin Mutual Advisers LLC.
Winters is a value investor. He believes in holding solid companies for the long term. He prefers to invest in companies that he thinks will do well in all market conditions, and avoids the current impulse. "The thing that's so amazing is that you can buy fabulous companies, fabulous businesses at cheap prices because people don't care. They're all hiding in cash," he said.
David Winters top holdings are:
Canadian Natural Resources Ltd. (CNQ): Canadian Natural is an independent oil and gas company with properties in Western Canada, the North Sea, and offshore West Africa. Last year production totaled 632,000 barrels of oil equivalent per day, 67% of which was oil. Proven reserves at the end of 2010 stood at 3.2 billion barrels of oil and 3.6 trillion cubic feet of natural gas. The company's Horizon oil sands mining operation will produce 250,000 barrels of oil per day when complete.
Canadian Natural has many projects under development to add production.
Berkshire Hathaway (BRK.A): Berkshire Hathaway Inc. is a holding company owning subsidiaries engaged in a number of diverse business activities. The most important of these is the property and casualty insurance business conducted nationwide on a direct basis and worldwide on a reinsurance basis through a number of subsidiaries collectively referred to as the Berkshire Hathaway Insurance Group.
Berkshire is considered one of the most financially sound companies. Berkshire Hathaway's book value per share increased at a compound annual growth rate of 20.2% from 1965 to 2010. At the end of June 2011, Berkshire had $71 billion in float from its insurance operations.
Berkshire's strong balance sheet allowed it to take full advantage of opportunities such as Goldman Sachs, General Electric, Swiss Re and Wrigley. That same balance sheet strength allowed Buffett to extend a $5 billion lifeline to Bank of America, with Berkshire receiving 50,000 shares of the bank's preferred stock and warrants to purchase 700 million shares of Bank of America common stock at an exercise price of $7.14 per share.
Philip Morris International Inc. (PM): Philip Morris International is the leading international tobacco company, with products sold in over 160 countries. They own 7 of the top 15 brands in the world and have a strong mix of international and local products that seek to appeal to a wide array of adult smokers.
Philip Morris is in solid financial shape. Philip Morris owns the international rights to Marlboro and the strength of its product portfolio makes the firm the price leader in many international markets. Moreover, the firm has benefited from the recent trend toward trading up in developing markets, and its operating margins of around 40% are higher than those of its peers.
Despite having a presence in around 160 countries, Philip Morris still believes that it can grow in markets such as India and Vietnam through population growth and by taking share from smaller competitors.
Reynolds American Inc. (RAI): Reynolds American is the second-largest domestic cigarette manufacturer behind Altria, with a portfolio of brands that includes Camel, Kool, and Pall Mall. Reynolds American holds the number-two position in the domestic cigarette manufacturing industry and owns 5 of the top 10 brands across a range of price points.
Reynolds has rationalized its brand portfolio and concentrates its promotional spending only on the largest and most profitable brands. About 63% of its cigarette portfolio is positioned in the more profitable premium sector.
Reynolds has demonstrated an innovative culture.
MasterCard Incorporated (MA): MasterCard develops and markets payment solutions and provides industry-leading analysis and consulting services to financial institution customers and merchants. Its brands include MasterCard, Maestro and Cirrus.
MasterCard is well positioned to benefit from the trend of electronic payment. In addition, its global brand strength is a strong competitive advantage when entering new or developing markets. Consumers and merchants in less developed markets tend to prefer a well-known global brand such as MasterCard because of its prestige and reputation.