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Lou Simpson Buys Moody's Corp, Oracle Corp, Brookfield Asset Management, Sells Fiserv, Dell, Lowe's Companies

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Lou Simpson, an investor that Warren Buffett trusts, just reported his fourth quarter portfolio. Lou Simpson buys Moody's Corporation, Oracle Corporation, Brookfield Asset Management Inc., Valeant Pharmaceuticals International Inc., Charles Schwab Corp, sells Fiserv Inc., Dell Inc., Lowe's Companies Inc. during the three months ended 12/31/2012, according to the most recent filings of his investment company, SQ Advisors LLC. As of 12/31/2012, SQ Advisors LLC owns 16 stocks with a total value of $1.2 billion. These are the details of the buys and sells.

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

These are the top 5 holdings of Lou Simpson

  1. Berkshire Hathaway Inc (BRK.B) - 1,413,980 shares, 10.5% of the total portfolio. Shares added by 0.12%
  2. TE Connectivity Ltd (TEL) - 3,167,501 shares, 9.8% of the total portfolio. Shares added by 0.09%
  3. Oracle Corporation (ORCL) - 3,066,630 shares, 8.5% of the total portfolio. Shares added by 44.58%
  4. Wells Fargo & Co (WFC) - 2,787,952 shares, 7.9% of the total portfolio. Shares added by 0.2%
  5. Charles Schwab Corp (SCHW) - 6,528,961 shares, 7.8% of the total portfolio. Shares added by 1.76%


New Purchase: Moody's Corporation (MCO)

Lou Simpson initiated holdings in Moody's Corporation. His purchase prices were between $43.98 and $51.54, with an estimated average price of $47.21. The impact to his portfolio due to this purchase was 4.9%. His holdings were 1,162,592 shares as of 12/31/2012.

Added: Oracle Corporation (ORCL)

Lou Simpson added to his holdings in Oracle Corporation by 44.58%. His purchase prices were between $29.58 and $34.09, with an estimated average price of $31.49. The impact to his portfolio due to this purchase was 2.62%. His holdings were 3,066,630 shares as of 12/31/2012.

Added: Brookfield Asset Management Inc (BAM)

Lou Simpson added to his holdings in Brookfield Asset Management Inc by 3.14%. His purchase prices were between $32.87 and $37.14, with an estimated average price of $34.64. The impact to his portfolio due to this purchase was 0.19%. His holdings were 1,995,948 shares as of 12/31/2012.

Added: Valeant Pharmaceuticals International Inc (VRX)

Lou Simpson added to his holdings in Valeant Pharmaceuticals International Inc by 2.02%. His purchase prices were between $53.32 and $61.03, with an estimated average price of $56.64. The impact to his portfolio due to this purchase was 0.15%. His holdings were 1,485,191 shares as of 12/31/2012.

Added: Charles Schwab Corp (SCHW)

Lou Simpson added to his holdings in Charles Schwab Corp by 1.76%. His purchase prices were between $12.5 and $14.47, with an estimated average price of $13.37. The impact to his portfolio due to this purchase was 0.13%. His holdings were 6,528,961 shares as of 12/31/2012.

Reduced: Fiserv, Inc. (FISV)

Lou Simpson reduced to his holdings in Fiserv, Inc. by 33.48%. His sale prices were between $72.58 and $81.11, with an estimated average price of $76.21. The impact to his portfolio due to this sale was -3.58%. Lou Simpson still held 1,121,321 shares as of 12/31/2012.

Reduced: Dell Inc (DELL)

Lou Simpson reduced to his holdings in Dell Inc by 56.24%. His sale prices were between $8.86 and $10.67, with an estimated average price of $9.77. The impact to his portfolio due to this sale was -2.81%. Lou Simpson still held 2,604,689 shares as of 12/31/2012.

Reduced: Lowe's Companies Inc. (LOW)

Lou Simpson reduced to his holdings in Lowe's Companies Inc. by 29.93%. His sale prices were between $30.29 and $36.09, with an estimated average price of $33.45. The impact to his portfolio due to this sale was -2.66%. Lou Simpson still held 2,399,799 shares as of 12/31/2012.

Here is the complete portfolio of Lou Simpson. Also check out:

1. Lou Simpson's Undervalued Stocks

2. Lou Simpson's Top Growth Companies, and

3. Lou Simpson's High Yield stocks


Rating: 3.3/5 (6 votes)

Comments

superguru
Superguru - 1 year ago
Why is gurus suddenly buying Moodys. Too cheap to pass up?
stevenramsey
Stevenramsey - 1 year ago
Little late on this, but I'm doing some snooping and would like to hear thoughts on why Lou is in Oracle and Buffett in IBM. I'm looking only at the face of things, so I know there is more to this than meets the eye, but here is something to ponder:

ORCL IBM

Rev $37.1B $104.5B

GM 74% 48%

EBITDA-Marg 46% 26%

EBIT-Marg 38% 21%

FCF $12.6B $14.1B

EV/EBITDA 8.1x 8.8x

EV/EBIT 9.7x 10.6x

Price/CashFlow 10.6x 10.2x

Market cap $152B $215.3B

Cash $33.4B $11.4B

Debt $19.7B $33.2B

EV $139B $237B

Rev Total / sh Total / sh [u][/u] 2005 $10.2B / $2.30 $91.1B / $56.94

2012 $37.1B / $7.40 $104.5B / $91.47

Oracle looks like a higher margin, higher growth option and trading at cheaper multiples to cash flow.

What is it that Buffett sees and what is it that Lou sees? Oracle is Lou's third biggest position, IBM is Warren's third biggest as well.
stevenramsey
Stevenramsey - 1 year ago
Well, my formatting sure didn't stick on that, so if you just want to try and make two columns in your head of that data I just put up there, you'll be able to see a comparison. If not, that's a total flop on my part.
junming82
Junming82 premium member - 1 year ago
Oracle has been bought by many gurus apparently and though it reported a lower earning as compared to what the analyst estimated, it is still an undervalued "growth" stock in my opinion. Beside Oracle, Microsoft seem to be a favourite of value investors in Q1 2013. This can be seen in article: 7 top stocks held by value investors________________________________________________________________________________​

Value investing blog: http://valuestocksinvesting.blogspot.sg/

vgm
Vgm - 1 year ago
Stevenramsey -- nice analysis, good question. Agree Oracle's numbers look better. I wonder if it gets down to Buffett's requirement that he needs to be sure how a company will look in ten years. IBM is now seen as a services company and may simply be more predictable?

Something to add around Oracle is that it's also one of Glenn Greenberg's top holdings in his concentrated portfolio. Lou and Glenn worked together years ago and always have significant overlap in their portfolios - currently, for example ORCL, VRX, SCHW. Glenn is one of the greats too IMHO.

When two of the greats like Simpson and Greenberg are buying the same stocks, it really gets my attention!
Cornelius Chan
Cornelius Chan - 1 year ago
ORCL 10-year ROE (to latest Q)

Return on Equity %

33.50


26.60


22.50


25.30


24.00


22.30


19.90


21.50


22.80


23.20


IBM 10-year ROE (to latest Q)
Return on Equity %

28.30


24.00


33.30


36.60


91.60


59.30


64.40


78.70


88.00


124


In 2008 IBM's ROE rose by a wide margin, don't know why... maybe IBM's current 4-5X greater return on equity is why Buffett prefers big blue?
Cornelius Chan
Cornelius Chan - 1 year ago
Regarding Moody's, does anyone know why it had negative equity from 2007 to 2011?

I have never seen a run like this before in a company's financials. Therefore, it had a negative ROE for those years. Because of this (and other factors) it is in my too hard to understand pile.

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