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Dodge & Cox’s Q3 Portfolio Updates: Buys Liberty Ventures, Google, Duke Energy and Allstate

November 14, 2012 | About:
San Francisco-based Dodge & Cox reported a total of 24 updates to its portfolio in the third quarter consisting of:

Additions to Current Shares 6
New Buys 4
Reductions to Current Shares 10
Sold Out 4


Dodge & Cox practices a meticulous research-based and team-oriented process in investment decision making, looking to its investment committees made up of Dodge & Cox veterans who brilliantly and intensely provide analyses and ideas for specific investments and its roles in the overall portfolio.

The firm values a long-term approach and a strict price discipline when it comes to investing, and steers clear of popular choices that come at a price “they would rather not pay.” Below is an excerpt of its investment approach (from dodgeandcox.com):

“From the earliest days, Dodge & Cox’s investment approach has stressed evaluation of risk relative to opportunity. A strict price discipline — steering clear of popular choices that come at a price premium we would rather not pay — is critical to achieving our investment objectives. Low valuation investments, for example, typically reflect low investor expectations that may serve as a buffer against the risk of significant price decline; these low expectations may also create greater potential for capital appreciation should investor pessimism turn out to be unwarranted or short-lived. At all times, our ongoing search for superior relative value is guided by a rigorous research process that seeks to differentiate the short-term concerns that may be temporarily depressing an investment from the intractable, long-term problems that could doom it.”



As of the end of the third quarter, Dodge & Cox’s portfolio included 165 stocks, with a total value of almost $77 billion, and a quarter-over-quarter turnover rate of 2 percent.

Currently, Dodge & Cox’s top holdings are: Comcast Corp. (CMCSA), Novartis AG (NVS), Wells Fargo (WFC), Capital One Financial (COF) and GlaxoSmithKline PLC (GSK).

The fund’s portfolio sector weightings is as follows:

Consumer Services 18.7%
Health Care 18.7%
Financials 18.4%
Technology 16.3%
Industrials 10%
Oil & Gas 8.2%
Telecom 3.7%
Consumer Goods 2.6%
Utilities 1.1%


Below are Dodge & Cox’s four newest additions to its portfolio in the third quarter.

Liberty Ventures (LVNTA)

Dodge & Cox’s new holding of business investment firm, Liberty Ventures (LVNTA) amounts to 218,214 shares. With a market cap of $2 billion, Liberty Ventures is currently trading at $56.02, beyond its former maximum price of $50.74. It also once traded at a minimum price of $40.52.

Google Inc. (GOOG)

Dodge & Cox’s new holding of search engine giant, Google (GOOG) amounts to 727,450 shares. Google has a market cap of $216.85 billion and is currently trading at $656.89 per share. Google has pretty solid Financial Strength and Profitability and Growth ranks, both at 9 out of 10. While its Business Predictability rank is only 2.5 stars, its P/E ratio of 20.4 is actually close to its 10-year low, and overall, its per share revenue and operating margin shows growth and expansion. View Google’s 10-Year Financials to view its current financial standings.

Duke Energy Corp. (DUK)

Dodge & Cox’s new holding of energy stock Duke Energy Corp (DUK) amounts to 38,605 shares. Duke has a market cap of $43.63 billion, a P/E ratio of 18.4, a P/B ratio of 1.2 and a P/S ratio of 3. Its Financial Strength rank of 4 and Profitability and Growth rank of 8 explains its lack of Business Predictability.

While its revenue is experiencing a downhill slope, its net margin is doing the opposite with a positive trendline. Visit its 10-Year Financials to see where the company stands financially.



Allstate Corp. (ALL)

Dodge & Cox’s tiny new new holding of insurance provider, Allstate Corp. (ALL) amounts to 5,580 shares. Allstate has a market cap of $18.78 billion, a P/E (ttm) ratio of 9.3, a P/B ratio of a 0.9 (near its 3-year high) and a P/S ratio of 0.6 (near its three-year high). Allstate is currently trading at $38.71 per share, up almost 2% in afternoon trading. With only one star in Business Predictability, Allstate experiences a negative free cash flow growth in a 10-year time frame, at a negative rate of 3.1 percent, while its revenue growth trends the opposite direction, with a positive rate of 4.5 percent in a 10-year time frame. View Allstate’s 10-Year Financials to see where it stands financially.

View the rest of Dodge & Cox’s portfolio updates here. Also view the funds’ undervalued stocks, top growth companies and high yield stocks.

About the author:

Dianne Tordillo
Dianne Tordillo is staff writer for GuruFocus.com. She reports on a variety of financial news, primarily dealing with investor portfolios and stock trades. Her articles also highlight insider trades, as well as the many useful features of GuruFocus.

Visit Dianne Tordillo's Website


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