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GMO Latest Picks: ORCL, PG, HPQ, VWO, MCD, ESRX - Q2 Portfolio Update

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Respected value shop GMO just reported its second quarter portfolio. The head of GMO, Jeremy Grantham, wrote in his second quarter letter extensively about possible shortage of food and other resources and their price increases. He wrote

I am very bearish on the problems we humans face and, sadly, very bullish on resources. Not surprising, I am even more convinced than I was a year ago of the inevitability of rising resource prices (and, unfortunately, associated societal and international instability). Therefore I am more confident in my suggested investment battle plan of a year ago. For any responsible investment group with a 10-year horizon or longer, one should move steadily to adopt a major holding of resource-related investments. For my Foundation (i.e., personally as opposed to institutionally where, reasonably enough, we cannot impose 10-year plus horizons on our clients) I had adopted 30% in resources as my eventual target and was slowly averaging in, nervous of near-term substantial price declines, but even more nervous of completely missing my own point. In my Foundation, I have currently reached about the two-thirds point of 20%.

That question, along with a discussion of overall GDP growth and why I think it is likely to be lower in the future than generally expected, will be discussed next quarter. In the meantime, it may be worth asking which kind of company will better resist lower GDP growth, especially in the developed world, and be better able to absorb pressure from higher resource prices. Once again, we prefer “quality” stocks. They have much lower resource costs as a percentage of total revenues than typical companies and they have a higher margin base from which to resist margin pressure.

Regarding to historical high profit margin, he wrote:

One slight change, though, is that fantastic (almost unbelievable) profit margin and earnings gains have finally weakened a little. They, together with Bernanke’s super low rates, have been the twin pillars of the market and not bad ones at all: here we are up 8% for the year in a thoroughly unsettling financial and economic world. With margins weakening, one of the twin pillars is looking shaky and price declines look more likely than before.

As of 06/30/2012, GMO LLC owns 599 stocks with a total value of $32.7 billion. These are the details of the buys and sells that have the impact to portfolio of more than .1%.

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

This is the sector weightings of his portfolio:

Technology 27.6%
Health Care 21.9%
Consumer Goods 20.3%
Consumer Services 9.6%
Oil & Gas 6.4%
Financials 5.8%
Industrials 2.7%
Telecom 2.2%
Basic Materials 1.3%
Not Assigned 0.8%
Utilities 0.4%


These are the top 5 holdings of Jeremy Grantham

  1. Johnson & Johnson (JNJ) - 26,152,844 shares, 5.4% of the total portfolio. Shares added by 0.97%
  2. Oracle Corporation (ORCL) - 52,901,908 shares, 4.8% of the total portfolio. Shares added by 14.44%
  3. The Coca-Cola Company (KO) - 19,105,455 shares, 4.6% of the total portfolio. Shares reduced by 1.42%
  4. Microsoft Corporation (MSFT) - 49,343,452 shares, 4.6% of the total portfolio. Shares reduced by 6.98%
  5. Pfizer Inc. (PFE) - 62,990,583 shares, 4.4% of the total portfolio. Shares reduced by 0.95%


New Purchase: Royal Bank Of Canada (usa) (RY)

Jeremy Grantham initiated holdings in Royal Bank Of Canada (usa). His purchase prices were between $48.04 and $58.05, with an estimated average price of $53.12. The impact to his portfolio due to this purchase was 0.16%. His holdings were 1,023,258 shares as of 06/30/2012.

New Purchase: Telefonica Brasil Sa (adr) (VIV)

Jeremy Grantham initiated holdings in Telefonica Brasil Sa (adr). His purchase prices were between $23.31 and $31.1, with an estimated average price of $26.55. The impact to his portfolio due to this purchase was 0.1%. His holdings were 1,300,550 shares as of 06/30/2012.

Sold Out: Motorola Mobility Holdings Inc (MMI)

Jeremy Grantham sold out his holdings in Motorola Mobility Holdings Inc. His sale prices were between $38.31 and $39.99, with an estimated average price of $38.99.

Added: Oracle Corporation (ORCL)

Jeremy Grantham added to his holdings in Oracle Corporation by 14.44%. His purchase prices were between $25.75 and $29.68, with an estimated average price of $27.83. The impact to his portfolio due to this purchase was 0.61%. His holdings were 52,901,908 shares as of 06/30/2012.

Added: The Procter & Gamble Company (PG)

Jeremy Grantham added to his holdings in The Procter & Gamble Company by 34.54%. His purchase prices were between $59.21 and $67.73, with an estimated average price of $63.84. The impact to his portfolio due to this purchase was 0.59%. His holdings were 12,138,192 shares as of 06/30/2012.

Added: Hewlett-packard Company (HPQ)

Jeremy Grantham added to his holdings in Hewlett-packard Company by 33.79%. His purchase prices were between $19.18 and $25.28, with an estimated average price of $22.73. The impact to his portfolio due to this purchase was 0.58%. His holdings were 37,965,326 shares as of 06/30/2012.

Added: Vanguard Msci Emerging Markets Etf (VWO)

Jeremy Grantham added to his holdings in Vanguard Msci Emerging Markets Etf by 137.53%. His purchase prices were between $37.15 and $44.08, with an estimated average price of $40.23. The impact to his portfolio due to this purchase was 0.54%. His holdings were 7,690,232 shares as of 06/30/2012.

Added: Mcdonald's Corporation (MCD)

Jeremy Grantham added to his holdings in Mcdonald's Corporation by 47.94%. His purchase prices were between $86.33 and $98.81, with an estimated average price of $92.71. The impact to his portfolio due to this purchase was 0.49%. His holdings were 5,499,432 shares as of 06/30/2012.

Added: Express Scripts Holding Company (ESRX)

Jeremy Grantham added to his holdings in Express Scripts Holding Company by 21.52%. His purchase prices were between $50.59 and $58.58, with an estimated average price of $54.44. The impact to his portfolio due to this purchase was 0.35%. His holdings were 11,703,748 shares as of 06/30/2012.

Added: America Movil Sab De Cv (adr) (AMX)

Jeremy Grantham added to his holdings in America Movil Sab De Cv (adr) by 70.59%. His purchase prices were between $22.94 and $27.48, with an estimated average price of $24.56. The impact to his portfolio due to this purchase was 0.32%. His holdings were 9,837,719 shares as of 06/30/2012.

Added: Lorillard Inc. (LO)

Jeremy Grantham added to his holdings in Lorillard Inc. by 26.12%. His purchase prices were between $119.48 and $137.14, with an estimated average price of $129.46. The impact to his portfolio due to this purchase was 0.29%. His holdings were 3,357,445 shares as of 06/30/2012.

Added: Cisco Systems, Inc. (CSCO)

Jeremy Grantham added to his holdings in Cisco Systems, Inc. by 9.31%. His purchase prices were between $15.99 and $21.18, with an estimated average price of $18.06. The impact to his portfolio due to this purchase was 0.27%. His holdings were 60,703,275 shares as of 06/30/2012.

Added: Colgate-palmolive Company (CL)

Jeremy Grantham added to his holdings in Colgate-palmolive Company by 13.26%. His purchase prices were between $96.49 and $102.88, with an estimated average price of $99.09. The impact to his portfolio due to this purchase was 0.25%. His holdings were 6,752,251 shares as of 06/30/2012.

Added: Abbott Laboratories (ABT)

Jeremy Grantham added to his holdings in Abbott Laboratories by 9.43%. His purchase prices were between $59.49 and $63.4, with an estimated average price of $61.55. The impact to his portfolio due to this purchase was 0.25%. His holdings were 14,545,356 shares as of 06/30/2012.

Added: Laboratory Corp. Of America Holdings (LH)

Jeremy Grantham added to his holdings in Laboratory Corp. Of America Holdings by 600.92%. His purchase prices were between $82.01 and $94.14, with an estimated average price of $87.6. The impact to his portfolio due to this purchase was 0.23%. His holdings were 951,208 shares as of 06/30/2012.

Added: Wells Fargo & Company (WFC)

Jeremy Grantham added to his holdings in Wells Fargo & Company by 4235.18%. His purchase prices were between $30.04 and $34.32, with an estimated average price of $32.57. The impact to his portfolio due to this purchase was 0.21%. His holdings were 2,197,285 shares as of 06/30/2012.

Added: Zimmer Holdings, Inc. (ZMH)

Jeremy Grantham added to his holdings in Zimmer Holdings, Inc. by 19.29%. His purchase prices were between $58.63 and $65.67, with an estimated average price of $62.23. The impact to his portfolio due to this purchase was 0.18%. His holdings were 5,572,489 shares as of 06/30/2012.

Added: Mastercard Inc (MA)

Jeremy Grantham added to his holdings in Mastercard Inc by 15.6%. His purchase prices were between $392.67 and $459.75, with an estimated average price of $426.29. The impact to his portfolio due to this purchase was 0.15%. His holdings were 800,676 shares as of 06/30/2012.

Added: Jpmorgan Chase & Co. (JPM)

Jeremy Grantham added to his holdings in Jpmorgan Chase & Co. by 1617.01%. His purchase prices were between $31.51 and $45.67, with an estimated average price of $38.39. The impact to his portfolio due to this purchase was 0.12%. His holdings were 1,228,764 shares as of 06/30/2012.

Added: Sunoco, Inc. (SUN)

Jeremy Grantham added to his holdings in Sunoco, Inc. by 6433.58%. His purchase prices were between $37.73 and $50.16, with an estimated average price of $44.94. The impact to his portfolio due to this purchase was 0.11%. His holdings were 725,227 shares as of 06/30/2012.

Added: Pepsico, Inc. (PEP)

Jeremy Grantham added to his holdings in Pepsico, Inc. by 4%. His purchase prices were between $64.73 and $69.95, with an estimated average price of $67.38. The impact to his portfolio due to this purchase was 0.11%. His holdings were 13,076,825 shares as of 06/30/2012.

Reduced: Lowe's Companies, Inc. (LOW)

Jeremy Grantham reduced to his holdings in Lowe's Companies, Inc. by 80.87%. His sale prices were between $25.45 and $32.16, with an estimated average price of $29.22. The impact to his portfolio due to this sale was -0.72%. Jeremy Grantham still held 1,801,683 shares as of 06/30/2012.

Reduced: Unitedhealth Group Inc. (UNH)

Jeremy Grantham reduced to his holdings in Unitedhealth Group Inc. by 29.23%. His sale prices were between $54.33 and $60.45, with an estimated average price of $57.28. The impact to his portfolio due to this sale was -0.5%. Jeremy Grantham still held 6,974,965 shares as of 06/30/2012.

Reduced: Amgen, Inc. (AMGN)

Jeremy Grantham reduced to his holdings in Amgen, Inc. by 39.41%. His sale prices were between $65.74 and $73.56, with an estimated average price of $69.45. The impact to his portfolio due to this sale was -0.33%. Jeremy Grantham still held 2,495,086 shares as of 06/30/2012.

Reduced: Merck & Co., Inc. (MRK)

Jeremy Grantham reduced to his holdings in Merck & Co., Inc. by 23.36%. His sale prices were between $37.21 and $41.08, with an estimated average price of $38.52. The impact to his portfolio due to this sale was -0.28%. Jeremy Grantham still held 8,246,702 shares as of 06/30/2012.

Reduced: Walgreen Company (WAG)

Jeremy Grantham reduced to his holdings in Walgreen Company by 81.21%. His sale prices were between $28.69 and $35.8, with an estimated average price of $32.35. The impact to his portfolio due to this sale was -0.28%. Jeremy Grantham still held 642,629 shares as of 06/30/2012.

Reduced: Vale Sa (adr) (VALE.P)

Jeremy Grantham reduced to his holdings in Vale Sa (adr) by 22.12%. His sale prices were between $17.42 and $24.25, with an estimated average price of $19.97. The impact to his portfolio due to this sale was -0.24%. Jeremy Grantham still held 12,748,018 shares as of 06/30/2012.

Reduced: Petroleo Brasileiro Sa (adr) (PBR.A)

Jeremy Grantham reduced to his holdings in Petroleo Brasileiro Sa (adr) by 21.59%. His sale prices were between $16.95 and $25.43, with an estimated average price of $20.53. The impact to his portfolio due to this sale was -0.19%. Jeremy Grantham still held 8,948,714 shares as of 06/30/2012.

Reduced: Nike, Inc. (NKE)

Jeremy Grantham reduced to his holdings in Nike, Inc. by 23.62%. His sale prices were between $86.11 and $114.3, with an estimated average price of $106.93. The impact to his portfolio due to this sale was -0.17%. Jeremy Grantham still held 1,720,547 shares as of 06/30/2012.

Reduced: Itau Unibanco Holding Sa (adr) (ITUB)

Jeremy Grantham reduced to his holdings in Itau Unibanco Holding Sa (adr) by 20.46%. His sale prices were between $13 and $19.35, with an estimated average price of $15.22. The impact to his portfolio due to this sale was -0.14%. Jeremy Grantham still held 9,413,853 shares as of 06/30/2012.

Reduced: Yum! Brands, Inc. (YUM)

Jeremy Grantham reduced to his holdings in Yum! Brands, Inc. by 35.14%. His sale prices were between $62.38 and $73.92, with an estimated average price of $69.17. The impact to his portfolio due to this sale was -0.1%. Jeremy Grantham still held 869,100 shares as of 06/30/2012.

Here is the complete portfolio of Jeremy Grantham. Also check out the Undervalued Stocks, Top Growth Companies, and High Yield stocks of Jeremy Grantham.


Rating: 2.0/5 (6 votes)

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