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Money Managers Tweedy Browne Report Largest Stocks, Topped by Johnson & Johnson

May 17, 2014 | About:
Monica Wolfe

Monica Wolfe

122 followers

Tweedy Browne (Trades, Portfolio) is a 93-year-old fund which focuses on undervalued securities, and which gained its investment approach from the late Benjamin Graham. The fund is owned and managed by William Browne, Thomas Shrager, John Spears and Robert Wyckoff, Jr.

Tweedy Browne (Trades, Portfolio) had a pretty quiet quarter during the fourth quarter. The fund did not buy any new stock and sold out of two current holdings, and only made slight increases and reductions to their other current positions. The Tweedy Browne (Trades, Portfolio) fund holds 47 stocks valued at $4.34 billion.

The following five stocks are Tweedy Browne (Trades, Portfolio)’s top five holdings as of the close of the fourth quarter.

Johnson & Johnson (JNJ)

Tweedy Browne (Trades, Portfolio)’s largest holding is in Johnson & Johnson where the fund holds on to 4,269,206 shares of the company’s stock. This position makes up for 9.7% of their total portfolio as well as 0.15% of the company’s shares outstanding.

Over the duration of the first quarter the fund reduced their holdings a slight -0.85% by selling 36,725 shares of the company’s stock. They sold these shares near the estimated average quarterly price of $92.71 per share. Since then the price per share has increased approximately 8.5%.

Tweedy Browne’s historical holding history:

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Johnson & Johnson is engaged in the research and development, manufacture and sale of a range of products in the health care field. It is a holding company which has more than 250 operating companies. The company’s operating segments are focused in: consumer, pharmaceutical and medical devices and diagnostics.

Johnson & Johnson’s historical revenue and net income:

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The analysis on Johnson & Johnson reports that the company’s operating margin is expanding, its dividend yield is near a 5-year low and its price is near a 10-year high.

The Peter Lynch Chart suggests that the company is currently overvalued:

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Johnson & Johnson has a market cap of $284.55 billion. Its shares are currently trading at around $100.58 with a P/E ratio of 21.00, a P/S ratio of 4.00 and a P/B ratio of 3.80. The dividend yield of Johnson & Johnson is currently at 2.80%. Johnson & Johnson had an annual average earnings growth of 3.10% over the past ten years.

Banco Santander Brasil SA (BSBR)

The fund’s second largest holding comes from Banco Santander Brasil where they maintain 61,332,358 shares of the company’s stock. This holding takes up 7.9% of the fund’s total portfolio as well as 1.62% of the company’s shares outstanding.

Tweedy Browne) upped the fund’s holdings in the company 24.65% over the past quarter by purchasing a total of 12,128,752 shares of the company’s stock. They purchased these near the average quarterly price of $5.09 per share, and since then the price per share is up approximately 32.4%.

Tweedy Browne (Trades, Portfolio)’s historical holding history:

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Banco Santander Brasil SA/Brazil is a full-service bank in Brazil. The Company has three business segments: Commercial Banking, Global Wholesale Banking and Asset Management and Insurance.

Banco Santander’s historical revenue and net income:

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The analysis on Banco Santander reports that the company’s payout ratio is too high, its dividend yield is near a 1-year high and its price is near a 5-year low. The analysis also reports that the company’s asset growth is faster than its revenue growth.

Banco Santander has a market cap of $25.52 billion. Its shares are currently trading at around $6.76 with a P/B ratio of 0.70. The dividend yield of Banco Santander is 3.90%. The company had an annual average earnings growth of 175% over the past five years.

Halliburton Company (HAL)

Tweedy Browne (Trades, Portfolio)’s third largest position is in the Halliburton Company where they hold on to 5,478,207 shares of the company’s stock. This holding represents 7.4% of the fund’s total assets managed as well as 0.60% of the company’s shares outstanding.

Over the past quarter the fund cut their holdings a minor -0.83% by selling 46,100 shares of Halliburton stock. They sold these shares near the estimated average quarterly price of $53.41 per share. Since then the price per share has gone up about 17.7%.

Tweedy Browne (Trades, Portfolio)’s holding history as of the close of the first quarter:

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Halliburton is a provider of services and products to the energy industry related to the exploration, development, and production of oil and natural gas. It operates under two divisions: Completion and Production segment, and Drilling and Evaluation segment.

Halliburton’s historical revenue and net income:

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The analysis on Halliburton reports that the company’s revenue has slowed town over the past year, its asset growth is faster than its revenue growth and its operating and gross margins have been in a 5-year decline.

The Peter Lynch Chart suggests that the company is currently overvalued:

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Halliburton has a market cap of $53.08 billion. Its shares are currently trading at around $62.85 with a P/E ratio of 26.10, a P/S ratio of 1.80 and a P/B ratio of 3.40. The company had an annual average earnings growth of 11.90% over the past ten years.

Devon Energy Corp. (DVN)

The guru’s fourth largest position goes to Devon Energy where they maintain 4,233,015 shares of the company’s stock. This position makes up for 6.5% of the fund’s total holdings as well as 1.04% of Devon’s shares outstanding.

During the first quarter the fund decreased their position a minor -0.06% by selling 2,640 shares. The portfolio managers sold these shares near the estimated average quarterly price of $62.06. From this average price the price per share has increased 13.9%.

Tweedy Browne’s historical holding history:

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Devon Energy is an independent energy company engaged mainly in the exploration, development and production of oil, natural gas and NGLs. The company's operations are concentrated in various North American onshore areas in the U.S. and Canada.

Devon’s historical revenue and earnings growth:

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The analysis on Devon Energy reports that the company’s price is nearing a 1-year high, its revenue has been in decline for the past five years and it has issued $4.5 billion of debt over the past three years.

Devon Energy has a market cap of $28.83 billion. Its shares are currently trading at around $70.67 with a P/S ratio of 2.40 and a P/B ratio of 1.20. The company has a 1.20% dividend yield.

Wells Fargo (WFC)

Tweedy Browne’s fifth largest position goes to Wells Fargo where they maintain 5,310,180 shares of the company’s stock. This holding takes up 6.1% of their portfolio as well as 0.10% of the company’s shares outstanding.

During the first quarter Tweedy Browne decreased their -0.01% by selling 750 shares of the company’s stock. They sold these shares near the average quarterly price of $46.58 per share, and since then the price per share has increased approximately 5.4%.

Tweedy Browne’s historical holding history:

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Wells Fargo a financial services company, which provides retail, commercial and corporate banking services. The Company provides other financial services through subsidiaries engaged in various businesses, mainly: wholesale banking, consumer finance, equipment leasing, agricultural finance, commercial finance, securities brokerage and investment banking, insurance agency and brokerage.

Wells Fargo’s historical revenue and net income:

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The analysis on Wells Fargo reports that the company’s price is near a 10-year high, its operating margin is expanding and its dividend yield is near a 3-year high.

The Peter Lynch Chart suggests that Wells Fargo is currently undervalued:

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Wells Fargo has a market cap of $258.51 billion. Its shares are currently trading at around $49.08 with a P/E ratio of 12.60 and a P/S ratio of 3.20. The company had an annual average earnings growth of 4.60% over the past ten years.

Check out Tweedy Browne’s complete first quarter holdings here. Also see Tweedy Brown Global Fund’s fourth quarter portfolio.

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